City of St. John's owed $20M in taxes as 2019 ends

Right now, the City of St. John's is owed just over $20 million in unpaid property taxes, but the city's head of finance and administration says it will collect "over 99 per cent" of it.

As 2019 drew to a close, the city was owed about $20.6 million, much of it unpaid. Coun. Dave Lane, finance and administration lead, says it's common for there to be unpaid taxes to accumulate over the course of the year. The end of the calendar yearis simplya point in time when the city measures its taxes owed.

"We are going to collect that money. We collect over 99 per cent of what's owing to the city. It may not happen in the year that it's billed, but we will get it," he said. "It's not something that I personally am worried about."

A year ago, Lane said, the city was owed about $23 million in property taxes on Dec. 31, 2018.

"Over the course of the year we reduced that number by $15 million down to $8 million. But then when you look at Dec. 30, 2019, it's a 20-million number," Lane told CBC News.

"So, it can be confusing. You might think only $3 million has been collected. That's not actually the case. We're constantly working through a seven-step process with four dedicated staff to be collecting the taxes owed to the city."

When taxes are in arrears, Lanesaid, the city will takea person's financial situation into accountbut will send reminders, increasing the urgency as time moves forward.

Lane said the year-endtotal includes tax bills that haven't been sent to the property owner yet, taxes that haven't been paid but will be paid shortly, as well as taxes on commercial properties that owners have not claimed as vacant yet, further reducing the total amount owed to the city, according to Lane.

It's common: CFIB

Vaughn Hammond, director of provincial affairs for the Canadian Federation of Independent Business for Newfoundland and Labrador,told CBC News the organization is not surprised by the amount owed.

"Tax arrears iscommon, throughout the province in particular. So from ourperspective it wasn't somethingwe're surprised about," Hammond said.

Hammond said there are many contributing factors as to why the total number of taxes owed grows each year, including how the localeconomy is operating.

He said right now is a difficult time for business owners to thrive, depending on the sector they're in, leading them to make difficult decisions.

Lane said the city works closely with those who may be behind on taxes, adding that if someone is in a real pinch the city will help them work out a plan to pay their taxes.

In the budget

When the city's budget gets tabled each year in December, Lane said, it includes the money owed in taxes.

"We assume we're going to collect it. So when the budget of $305 million comes out, that $20 million is accounted for and it's being spent on things," he said.

Coun. Lane said the city expects there to be only about $1 million in "bad debt" owed at the end of the budget, at which point he said the city, like any organization, will write it off.

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