On May 15, the Minister of Public Safety and Solicitor General issued a new order under the Emergency Program Act that relates to local government financial matters affected by COVID-19.
Borrowing from Reserve Funds
The order states that municipalities, regional districts, improvement districts, and other specified bodies may, during the 2020 calendar year, borrow from reserve funds, on certain conditions. The money borrowed must be used for operational shortfalls during 2020, and must be repaid to the applicable fund by the end of 2025. No interest need be charged. If money remains outstanding at the end of 2025, that money must be added to the 2026 financial plan, budget or estimate, as applicable, as a cash transfer to reserves, plus a penalty equal to 5% of the outstanding amount.
Extension of Repaying Debt Incurred as Borrowing in Anticipation
The order also extends the date by which debt incurred as borrowing in anticipation in revenue in 2020 needs to be repaid by municipalities, regional districts, and other specified bodies. These amounts now need to be repaid on the earlier of the date upon which the anticipated revenue with respect to which the borrowing was authorized is received, and December 31, 2021. The order also expressly states that any amount remaining unpaid in 2021 does not limit the maximum allowable amount of borrowing in anticipation of revenue in 2021.
Authorization to Defer Tax Sale and Redemption Period
Regarding the annual municipal tax sale, the order permits municipalities by bylaw to defer the 2020 tax sale to 2021. The bylaw must be passed by August 31. If a municipality chooses to defer the annual tax sale, it has to send a written notice within 2 weeks to the owner of any property that is subject to the deferred tax sale, advising that the tax sale has been deferred, that their taxes remain delinquent and subject to interest charges, and that if delinquent taxes are not paid before the start of the tax sale on September 27, 2021, the property will be subject to the tax sale to occur on that date. The order also permits improvement districts and the City of Vancouver to defer tax sales.
The order also permits municipalities, including the City of Vancouver, to extend the redemption period for all properties with a redemption period that expires in 2020. Notice must be provided to both the property owner that is subject to the redemption period, as well as the tax sale purchaser. As with deferring the tax sale, extending the redemption period must be done by bylaw passed by August 31.
Extension of Reporting Requirement Deadlines
The order also extends the deadline for municipalities and regional districts to provide their annual reports under sections 98(1) of the Community Charter, and section 376(1) of the LGA, respectively. The date is extended from June 30 to August 31. Finally, it changes the requirement under the Financial Information Act to prepare statements of financial information to August 31, 2020.
The order is effective only as long as the provincial state of emergency remains in effect.