Nova Scotia offers $380M in loans to municipalities squeezed by COVID-19
The loan program is meant to bridge the gap until deferred municipal taxes are paid
Nova Scotia is preparing to loan up to $380 million to municipalities whose budgets are being squeezed because of the COVID-19 pandemic.
With tax deferral programs on offer to many property owners because of public health orders that have slowed the economy, a key municipal revenue stream is taking a hit.
Pam Mood, mayor of Yarmouth, N.S., and president of the Nova Scotia Federation of Municipalities (NSFM), said the province's new loan program, which was announced Tuesday, will bridge the gap until property tax revenue returns to more typical levels.
Mood called the loan program stage one of a plan that will be necessary to keep municipalities operating.
Borrowing needs to be determined
Mood said municipalities won't know how much they'll need to borrow until the date when property taxes are due has come and gone. The due date in Yarmouth is May 31, said Mood, so her council will submit an ask to the province in early June.
In Halifax, property owners can opt to defer their payments, usually due at the end of April, to June 1 this year because of COVID-19.
Borrowing needs are likely to vary across different municipalities, said Mood, and she thought the loan program accounted for those possible differences.
"We know not all municipalities are on equal footing, that's just a given," she said. "So in order 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 three-year terms and 1.1 per cent interest rates.
"The reason we're doing the borrowing is because the interest rates outside of us would have been higher, so they're benefiting from the provincial interest rate," said Premier Stephen McNeil.
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With files from Michael Gorman