Mayor Don Scott says the municipality is “in excellent shape” financially, but a combination of low oil prices, the COVID-19 pandemic, April’s flooding and changes to how industrial taxes are collected means the near future will be a frugal one.
During a Wednesday speech to the Fort McMurray Chamber of Commerce, delivered via videoconferencing, Scott did not go into details about what trimmed municipal budgets could look like. Instead, he told business leaders to prepare for that economic environment.
“It’s going to mean some belt-tightening all around and some challenges, but we’re no stranger to that,” he said. “I’m very optimistic we’ll be able to move forward on that.”
In May, council amended its 2020 budget after a report showed projected property tax revenue for the year would drop by nearly 20 per cent. The change means a $168 million decrease in property taxes compared to 2019.
The tax class paid by oil companies was also cut by 26 per cent cut. The change comes as the municipality continues to lower the tax ratio between the rural non-residential tax and what urban businesses pay.
The plan is to lower the tax ratio to 5:1. This was introduced by former Premier Rachel Notley and continues under Premier Jason Kenney.
Scott said Wednesday the ratio is now just above 7-to-1.
While the municipality is seeng large declines in revenue, the municipality has no debt and $813 million in reserves for future capital projects.
“Our municipality is probably in one of the best positions to move forward than any other municipality in Alberta,” said Scott.
Scott also thanked the provincial government for committing $100 million in Disaster Relief Program funding for Fort McMurray residents impacted by April’s flooding. He urged the chamber to lobby the federal government for more investment locally.
Another top priority for the municipality and local business leaders is to help businesses stay open as the economy restarts slowly.
The Wood Buffalo Economic Development Corporation has made dozens of suggestions on boosting the local economy once the COVID-19 crisis ends.
Council has also passed an incentive program for development in downtown Fort McMurray, which includes deferring property taxes for up to five years on new businesses or additions to existing ones.
Nick Sanders, interim president of the chamber of commerce, told council it is difficult to estimate how many businesses in the Wood Buffalo area will close because of COVID-19 restrictions.
For now, the organization is trying to keep the number of businesses that close below 20 per cent.
When reacting to reports that roughly half of Edmonton businesses fear they will not survive the pandemic, Scott said those numbers are “completely appalling and unacceptable” and urged people to shop locally as often as possible.
“Different numbers have been mentioned for this region, but I think we need to do everything we can to make sure that every single business, as many as are able, can reopen,” he said. “We’re going to do all that we can to make sure we’re helping out.”
-with files from Laura Beamish