Vancouver mayor Kennedy Stewart says the city may face a major financial crisis, and even bankruptcy, as a result of the financial fallout of COVID-19.
This news comes after a recent poll by Research Co. was done on behalf of the mayor’s office and found that 25% of Vancouver homeowners said that they will pay less than half of their 2020 property tax bills as COVID-19 financial woes continue.
The poll found that only 68% of homeowners said they could pay their full mortgage payment last month, and only 55% said that they will be able to do the same in May. As for property taxes, 25% of those polled said they will pay less than half of their 2020 tax bills, while 6% plan on paying nothing.
The poll also found that 46% of Vancouver residents are now facing fewer work hours or job loss, while 24% have experienced a “major” income drop.
Mayor Kennedy said if 25% of homeowners defaulted on their property taxes, the city could lose an additional $325 million in revenue, for a total 2020 loss of around half of a billion dollars, which could lead to further staffing cuts and potentially force the city to sell off assets — unless provincial and federal governments offer more assistance.
“It’s illegal for Vancouver and other local governments to run deficits, so the only way we can stay afloat is with the help of the federal and provincial governments. Otherwise, local governments will be forced to take drastic measures that will hurt residents and businesses, and significantly slow any post-pandemic economic recovery,” said Stewart in a statement.
Today we released new data showing how hard #COVID19 has hit Vancouver.
➡️46% w/ less hours or job loss
➡️24% w/ major income drop
➡️25% planning to not fully pay property tax
Without help from senior gov’t the City will face a major financial crisis:https://t.co/Ol49BeLk4x
— Kennedy Stewart (@kennedystewart) April 12, 2020
As for Toronto, the City says it is facing a $65 million loss per week during the COVID-19 outbreak, driven by decreased TTC and other revenues, and then coupled with increased COVID-related costs.
“Revenues are decreased due to closures, decreased demands, and property tax and utility payment deferrals, and increased costs are stemming from COVID-19 related needs like additional personal protective equipment supplies, cleaning, additional shelter space, and overtime,” said the City in a statement.
However, a report from The Star revealed the City’s weekly hit of $65 million could lead to a “devastating loss” in revenues and increased costs that would require a bailout from other governments.
In turn, the City says it now has the Mayor’s Economic Support and Recovery Task Force in place to begin the rebuilding efforts after the City transitions into the recovery phase, with a focus on growth and building resiliency.
“We are doing everything we can at the City to continue delivering essential, critical, and priority services to our residents,” said Mayor John Tory in a statement.
“It is critical that as we continue to manage the City’s emergency response to COVID-19, that we also ensure that impacts to Toronto’s strong economy and strong pre-crisis financial position are addressed and that action plans are in place to best position the City when we emerge from this.”
To achieve this, the City is now engaging other orders of government and requesting relief funding from the federal and provincial governments to offset the cumulative financial impact to City expenditures and revenues as a result of the pandemic emergency.