Authors: Milad Alishahi, Teague Pushor
Ratepayers of municipalities may be struggling financially due to the adverse effects of COVID-19 on the economy.
While Saskatchewan has announced plans to lift restrictions on business activities, the financial burden of those restrictions will continue to impact residents. As local governments, municipalities have a duty to foster the economic well-being of their communities and their ratepayers. There are a number of options available to municipalities in order to relieve the financial burden of their ratepayers in the current economic landscape.
The City of Regina has offered residents and businesses the ability to defer water utility payments for up to six months with no late payment or interest charges applied. The City of Regina has also extended the deadline for residential property taxes to be paid. Similarly, the City of Saskatoon has suspended utility disconnections and late payments penalties due to utility arrears.
Municipalities in Alberta have also utilized strategies to assist ratepayers with their financial burdens in these unprecedented times. Some municipalities have allowed ratepayers to elect to pay all, a portion, or none of their utilities for up to three months, with no interest or penalty charged.
In these difficult times, there are options available to municipalities to assist their ratepayers. Depending on the utilities and services provided by the municipality, there are options to defer due dates for payment and suspended enforcement measures. Passing the appropriate bylaws in accordance with The Municipalities Act could ease the financial burden faced by ratepayers.
Any action taken by a municipality must, however, be balanced against the financial health of the community. Municipalities still need to provide services to their residents, such as waste removal, utilities and road repair. In addition, municipalities cannot budget a deficit and are limited in their ability to borrow money. Any deferral in revenue will need to take into account these limitations.
COVID-19 has presented many difficult challenges for municipalities and we are here to help navigate these circumstances. While we have outlined some of the recent measures municipalities have implemented to assist ratepayers, this is not an exhaustive list of possible solutions. Each municipality is unique and faces its own set of challenges. MLT Aikins can assist you in tailoring a response for your municipality’s unique situation.