British Columbia

Prince George council weighs easing taxes against economic revival in pandemic recovery plans

In municipal council chambers across the province, the COVID-19 pandemic is prompting budget cutting and urgent debate over fast-falling revenues, closed businesses and jobless taxpayers.

Concern over long-term impact as councillors debate axing tax increase

Prince George city council is debating spending cuts in response to estimated revenue losses of up to $1.3 million a month due to the economic impact of the COVID-19 pandemic. (Andrew Kurjata/CBC)

In municipal council chambers across the province, the COVID-19 pandemic is prompting budget cutting and urgent debate over fast-falling revenues, closed businesses and jobless taxpayers.

Pentiction has reduced its work force by 20 per cent and Kelowna by 10 per cent. The town of Fernie voted to delay capital projects and extend facility closures.

In Prince George this week, proposals included cancellation of scheduled pay hikes for councillors and senior staff, as well as shutting down the city's Four Seasons swimming pool until a new downtown replacement is built.

Coun. Kyle Sampson, who suggested the pool closure, also called for a look at reducing the previously proposed 3.44 per cent tax increase to as low as zero. 

"I would really like to see what we're losing, going to zero," he said. 

But his fellow councillors differed on how far cuts can go without inflicting serious side effects on the community and the post-pandemic recovery. 

Coun. Murry Krause said past experience shows a zero-increase budget could have long-term effects.  

"I was on council in a year when we did a zero-based increase because we thought we were doing the right thing," Krause said. "It took years for the city to recover and get back to a place where they were meeting the needs of the community."

One of the cost-cutting proposals before council is closing the Four Seasons swimming pool in Prince George until its replacement is built. (Andrew Kurjata/CBC)

Mayor Lyn Hall said the challenge for municipalities like Prince George — which is currently losing between $900,000 and $1.3 million a month — is to find the balance between easing taxes and economic revival.  

Hall sees extensive capital spending plans — which include the swimming pool as well as a new fire station — as key to the city's recovery from the pandemic.

While the fire station project is well advanced he said the swimming pool project, which has not begun, "would be a conversation." 

"We eliminated or deferred about $25 million but we still have about $90 million worth of capital projects on the table," Hall told CBC Daybreak North's Caroline de Ryk.

"If we start to defer a lot of projects, even more than we've done now ... a lot of these construction companies and skilled trades folks, they are depending on work that municipalities do."

Prince George Mayor Lyn Hall says council needs to find a balance between cuts to help balance the budget, and spending to help in the post-pandemic recovery. (City of Prince George)

Hall said a final decision on any tax increase will be finalized before mid-May. 

"I'm confident we're going to get through it. It just scares the heck out of me that we could very well lose a number of businesses in our community," said Hall, citing economists' projections that 25 per cent of businesses will not survive.

Listen to the full interview with Prince George Mayor Lyn Hall below: 

Mayor Lyn Hall on budget cuts hitting the city due to COVID-19. 10:39

With files from Daybreak North and Daybreak South

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