Kennedy cites decrease property tax collection
By Atiba Nelson, Staff Reporter
The COVID-19 pandemic has left many people strapped for cash. Another group that claims that they do not have money is cities. Cities, who are suspending parking restrictions—which lead to parking tickets and revenue—are turning their pockets inside out to find that they are not lined with cash.
Last week, Vancouver Mayor Kennedy Stewart claimed that due to a decrease in paid property taxes—the main way the city generates revenue—the City of Vancouver would have to exhaust its resources to pay its bills.
“If 25 percent of homeowners do end up defaulting on their property taxes, we could shed up to an additional $325 million in revenues, losing more than half-a-billion dollars in operating funds in 2020,” said Stewart in a press conference. “[This] would devastate the city’s financial position, forcing us to liquefy assets and exhaust every reserve fund we have—just to avoid insolvency.”
As COVID-19 has brought several new words to the collective consciousness—for example coronavirus, pandemic, and self-isolation—insolvency can now be added to that list of novel words.
Insolvency is the state of financial distress in which someone, or a business, is unable to pay their bills. It is the space between broke and bankrupt.
With the Vancouver economy halted due to public health measures requiring social distancing, many homeowners and renters are out of work and unable to pay their mortgages and monthly rent. Although the provincial government announced a $500 rental supplement for individuals facing financial hardships and a ban on rent increases, individuals are still facing barriers in paying monthly housing costs. All of which is hurting the City of Vancouver’s ability to raise funds.
Further hurting the lower mainland economy, but temporarily helping the City of Vancouver by decreasing its expenditures, is the city’s decision to temporarily layoff 1,500 municipal workers in the city parks, recreation, and culture department. The furloughed staff will continue to be paid by the city for a period of time, but afterwards will be eligible for federal government benefits.
Although the economic future looks bleak for the City of Vancouver, the mayor insists that British Columbia’s largest city is not headed towards bankruptcy—it just has the inability to cover its daily operating cost.