The Municipality of North Cowichan will receive $4.4 million from the province to help offset costs related to the COVID-19 pandemic.
Mayor Al Siebring said is his mayor’s report at the council meeting on Nov. 4 that the funding is coming from the COVID-19 Safe Restart Program for local governments, which is being administered by the Ministry of Municipal Affairs and Housing.
He said it’s meant to help North Cowichan cover its increased operating costs and decreased revenue that the municipality has experienced due to the pandemic, which has severely impacted the region beginning in March.
“One significant example of how we could consider using some of this funding is to offset the decreased revenue from the Cowichan Aquatic Centre, which saw a decrease in revenue of $1.1 million [due to the pandemic],” Siebring said.
“I’d rather do that than increase taxes in 2021 to cover that shortfall.”
Siebring said the additional costs to North Cowichan related to the pandemic will be identified in next year’s budget.
He said municipal staff will be working with the ministry in the coming weeks to determine exactly what the funding can be used for.
“I hope it includes such services as bylaw enforcement, police and fire costs, service for vulnerable people and virtual communications,” Siebring said.
“The devil is in the details, but I hope it lowers our [projected] tax increase for 2021, and even in 2022 if we can carry it forward.”
North Cowichan CAO Ted Swabey confirmed that staff are anticipating a large tax increase next year, and also concluded that the funding could provide options to lessen the increase.
The municipality significantly reduced its planned tax increase in 2020 from 4.4 per cent to 1.4 per cent due to the COVID-19 pandemic in an effort to reduce the tax burden on residents during the uncertain financial times.
Finance director Mark Frame said at the time that if council chooses to return to more sustainable tax and service levels next year after significantly reducing its planned tax increase in 2020, taxpayers in the municipality could see a tax increase of more than seven per cent in 2021.
He said if council chooses the option of a one-time big tax hike of 7.2 per cent in 2021, the tax rates over the next few years would be close to the projections in the original five year financial plan, and see the proposed tax increase in 2022 at about 3.4 per cent, 4.1 per cent in 2023 and three per cent in 2024.
But Frame said that if council asks for another fiscally restrained budget in 2021, the tax increase could be about five per cent next year, and some previously scheduled capital works projects would have to be deferred.
As well, Frame said that could lead to five per cent tax increases again in 2022 and 2023 before returning to three per cent in 2024.
“This option would provide more immediate affordability for taxpayers, but it would come with reduced service levels and may also help slow the recovery of the local economy,” Frame said at the time.