At last week’s regular meeting, R.M. of Wallace-Woodworth Council delved into the province’s plan to phase out the education portion of property tax, highlighted by Finance Minister Scott Fielding in his 2021 Budget. After participating in a conference call with provincial officials, Chief Administrative Officer (CAO) Garth Mitchell had few details regarding the workings of the multi-year plan.
“I think it’s another one of these… they wanted to get a program out in a hurry so they got it out without thinking about it a lot,” he said. “The majority of the questions that us administrators asked during our call could not be answered by the Deputy Minister, which was quite disappointing.”
Mitchell explained that municipal ratepayers will see a reduction in their homeowners grant from $700 to $525 annually. They will be eligible for a rebate cheque from the province, however it will not arrive until October, when the taxes are due. “The sad part is that I think this is being done in a very archaic and backwards manner. When a lot of our seniors, for example, get their tax bill, they race it back to the office to pay. They are now going to be out of pocket that money for probably four months, some up to five months, waiting on their cheque to come to pay for the other part of the homeowners grant.”
The CAO also took issue with the reduction being applicable to all classes of property.
“For corporations, it is going to be a huge windfall because now the rebate is going to be coming directly from the province on an annual basis going forward,” he said.
“That’s a lot of money for the province to make up.”
How they will do so remains to be seen.
“When asked where the money is coming from, again, they had no clue,” Mitchell said. “They just said they would be revisiting their finances.”
Reeve Clayton Canart shared Mitchell’s concerns about the impact a provincial revenue shortfall would have on municipalities and their budgeting process.
“You think of 137 municipalities in Manitoba… that kind of dollars. I don’t know where they’re going to magically come up with that amount of money to cover the difference,” Canart said. “It makes you a bit nervous of what it’s going to take to pay that bill.”
Mitchell wondered if the municipality could lose the revenue it receives from the levying of supplemental taxes, or from grants in lieu of taxes for provincially-owned property.
“That’s something we’re going to have to keep an eye on,” he said.
During the discussion, Deputy Reeve Val Caldwell stressed the importance of keeping local ratepayers in the loop regarding the forthcoming changes, sharing information via social media channels as it becomes available.
“The province has promised they are going to put it on all their social media, and take the lead on letting people know,” Mitchell said. “They have also promised they will have inserts to go in with the tax notices to try and explain it.”
Canart admits there’s benefits to this tax reform over the long haul, but hopes the picture will soon become clearer for councillors, staff and ratepayers.
“I think this is something we are going to have to see how it plays out,” he said. “We really can’t have a role in it.”
“It’s something that we’ve asked for… it’s one of those things we are wanting to get to work… it’s just that the route we’re taking to get there might have some bumps in it for us.” Mitchell added. “I hope it’s not another download.”