Nova Scotia is preparing to lend up to $ 380 million to municipalities whose budgets are being tightened due to the COVID-19 pandemic.
With tax deferral programs offered to many homeowners because of public health orders that have slowed the economy, an important municipal revenue stream is being affected.
Pam Mood, Mayor of Yarmouth, NS, and President of the Federation of Municipalities of Nova Scotia (NSFM), said the province’s new lending program, which was announced Tuesday, will close the gap until the property tax revenue return to more typical levels.
Mood called the stage one loan program a plan that will be needed to keep municipalities in operation.
The loan needs to be determined
Mood said municipalities will not know how much they will need to borrow until the date when property taxes expire. The due date in Yarmouth is May 31, Mood said, for his council to send a request to the province in early June.
In Halifax, homeowners can choose to postpone their payments, generally scheduled for the end of April and June 1 of this year, due to COVID-19.
Lending needs are likely to vary in different municipalities, Mood said, and she thinks the loan program is responsible for these possible differences.
“We know that not all municipalities are on an equal footing, this is just a fact,” she said. “So, to protect us all, what we asked for was a program that benefits all municipalities, regardless of size.”
Why the province started the program
The loans have a three-year term and interest rates of 1.1%.
“The reason we are borrowing is because interest rates outside of us would have been higher, so they are benefiting from the provincial interest rate,” said Prime Minister Stephen McNeil.
MORE MAIN STORIES