Coronavirus Crisis: Are property tax, user fee increases in Markham inevitable to offset economic impacts of pandemic?

#Essentialservices: Won't be 'business as usual for a long time,' as city grapples with potential declines in revenue and increased expenses, chief administrative officer says

Yorkregion.com
April 20, 2020
Heidi Riedner

City of Markham CAO Andy Taylor explains various measures taken to date and what staff are exploring to deal with potential revenue loss and operating expenses from the COVID-19 pandemic. He did so during a video chat hosted by Mayor Frank Scarpitti via Zoom April 14, 2020. - Heidi Riedner/Torstar

With the provincial state of emergency extended until mid-May and warnings of a looming recession, the City of Markham is among many municipalities coming to grips with the long-term impact of a lockdown approach continuing for the foreseeable future.

To what extent tax and user fee increases will be inevitable for Markham residents to offset potential declines in city revenues and increased operating expenses to deal with the coronavirus pandemic remains largely unknown at this point, according to senior officials.

“No one has a crystal ball,” Markham chief administrative officer Andy Taylor said in response to resident questions fielded during the mayor’s meetup video chat held April 14 via Zoom, Facebook and Twitter platforms.

But Taylor added economic recovery will definitely be slow given the “dire” economic forecast for the balance of 2020 in Canada released by the International Monetary Fund (IMF) April 14.

The IMF forecasted a 6.2 per cent contraction in the Canadian economy for this year, followed by some growth in 2021.

“That’s a steep cliff and a very sudden, dramatic recession in 2020; however, they are suggesting the economy will pick up somewhat in 2021.”

While the city has taken great pride in running a tight fiscal ship to date, Taylor said these are challenging times, especially in light of the fact, unlike other levels of government, municipalities are required to run without deficits and have to balance their budget every year.

“We will have cash flow issues that we will have to deal with and staff are looking at all kinds of strategies, both in the short and long term,” he said.

Regarding a gradual opening of schools, businesses and city facilities, and recognizing that some of these things fall under the jurisdiction of other levels of government, Taylor said it won’t be “an on/off switch” approach, but rather done in close collaboration with the province and federal government and based on “solid science” from public health officials.

“We don’t anticipate it will be business as usual for a long time, but we will continue to work on what this new normal will look like and working on scenarios of a phased-in approach.”

Moving forward, the city will evaluate programs on an ongoing basis, with staff reporting monthly to council on the city’s financial outlook.

“We have to keep our eye on it because it is the most important thing obviously after the health of our citizens that we have to deal with.”

Right now, community centres are shut down and the city has deferred taxes, penalties and interest, as well as water rate increases for the rest of the year.

While the city has eliminated the stormwater management fee for residents and businesses, it is going ahead with the projects that were planned for this year under the program, Mayor Frank Scarpitti said.

“Some things will continue because they are capital projects funded over many years and there may be other projects or programs that get modified as we try to come to grips with the additional costs that we have with COVID-19,” he said.

To date, no decision has been made regarding the status of Celebrate Markham grants given to groups for various celebrations, but Scarpitti said there may be a reduction because the events are not taking place.

Funding for various seniors’ activities and programs will also be part of the discussion.

“Obviously, we want to be able to continue to support organizations to put things on, but if the restrictions do not allow us to do it, I think other taxpayers would also want to make sure we’re not giving out money to organizations when in fact there has been no event to host or programs run.”