As a result of COVID-19, Pelham is forecasting a tax levy operating deficit of approximately $408,666 to the end of June, which could increase to approximately $849,820 by December 31, should the present situation remain unchanged until the end of the year.
The magnitude of the impact of COVID-19 on the Town of Pelham is not fully understood, however, the existing physical distancing measures and economic shut-down impacts have already been significant.
Since March 18, 2020, the federal government has announced a series of relief programs that are targeted at the most vulnerable residents and businesses including:
- $52.4 billion in direct assistance for eligible small and medium businesses
- $55 billion to help meet liquidity needs and stabilize the economy, which includes deferral of income tax payments and the waiving of interest
- $30 billion in cash flow and liquidity assistance for businesses, which includes deferral in Goods and Services Tax (GST) remittances and customs duty payments
Many of Ontario’s municipalities have explored further financial relief measures to those already announced by the federal and provincial governments. The most common measures being implemented by municipalities include the extension of payment deadlines and the waiving of late payment penalties for tax and water balances owing.
On March 23, 2020, the Town of Pelham announced its own financial relief measures being the waiving of late payment penalties for tax and water & wastewater balances owing for the month of April.
2020 Tax Levy Impact
A tax levy operating deficit of approximately $408,666 has been forecasted to the end of June as a result of COVID-19 which could increase to approximately $849,820 by December 31, 2020, should the present situation remain unchanged until the end of the year.
The most significant drivers of the projected deficit include:
- Lost recreation revenues from the Meridian Community Centre, which are partially offset by program/service delivery cost savings, including the temporary layoff of staff.
- Lost development revenues.
- Lost tax and water interest and penalty revenues.
- Lost park operation revenues.
The Town is projecting that the tax levy operating budgets will be negatively impacted by COVID-19 regardless of how long the situation lasts throughout the year. Given the amount of uncertainty around timelines and availability of funding sources, it is difficult at this time to quantify the full impact of individual items as well as the overall impact on the Town.
As the COVID-19 pandemic impacts are quite fluid, staff will continue to monitor its financial impacts and report back to Council on a regular basis.
Read the full report to Council.