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City facing cash crunch

City facing cash crunch

Meeting via social media, Hamilton City council were told that the city will end up with an operating deficit by years end, as will virtually every other municipality in Canada. City treasurer Mike Zegarac said he has been participating in regular teleconferences with provincial officials and the Federation of Canadian Municipalities about solutions to the cash crunch. The city faces a double crisis—taxpayers whose income has been interrupted unable to pay their installments, coupled with the added expenses associated with the COVID crisis.

Staff recommended some limited relief that would include the waiving of penalty and interest charges from April 30 to June 30, and a 30 days grace period for taxes due on June 30. The relief would not apply to penalties and interest that have already been assessed. Taxpayers who were making automatic payments and now are unable to, will have their notice period shortened to seven days.

 The city’s tax base is vulnerable during the crisis, as 83,000 taxpayers pay their taxes as they come due, and it is not clear how many of them may now find themselves unable to make their installments. There are approximately 64,000 taxpayers enrolled in one of the City’s pre-authorized payment plans and some of them may also be or become unemployed.

Zegarac told council that it is simply not possible to forgive taxes as property taxes represent by far the city’s main source of revenue. Mayor Fred Eisenberger said there may be a need for senior governments to “backstop” municipal property taxes.

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