BANFF – The Town of Banff is calling on Parks Canada to waive the annual $550,000 land rent payment to help the municipality as it grapples with the financial impacts of the COVID-19 crisis.
Mayor Karen Sorensen said the Town has reached out to Parks Canada on land rent, which has only offered to allow deferment of the payment.
“I think it would be an appropriate thing to happen to waive it,” she said during a council meeting on April 14. “That $550,000 makes a bit of a difference for us this year.”
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The Town of Banff leases from the federal government all land used for municipal operations and services.
Under the municipality’s incorporation agreement, the lease costs the Town of Banff $550,000 per year. Banff and Jasper are the only two municipalities in Canada that pay and rent to the federal government.
Town Manager Kelly Gibson said there has been no response from Parks Canada on a request to waive the payment, but added that he plans to follow up on the discussion.
“We asked for the waiving; we got a deferral, but the deferral is when we typically pay land rent anyway,” he said. “We’re not finished discussing that with the federal government.”
Municipalities across the country are calling for help from provincial and federal governments to offset the impacts of the coronavirus pandemic.
City of Calgary predicts big losses of $15 million a week, while Toronto is facing a financial hit of close to $65 million a week.
Unlike the higher levels of government, it is illegal for municipalities to run deficits.
While the Town of Banff is financially solid, Mayor Sorensen said it also faces challenges during the crisis.
“I am sure across Canada, there will be municipalities who will run out of money, who will be in deficit, who will be in bankruptcy situation for sure,” said Sorensen.
“It’s a balance for us for sure, I appreciate that.”
The Town of Banff has deferred property taxes and utilities for residents and businesses.
This week, council cut more than $13.5 million in capital spending planned for this year to help with cash flow. It's not final until further budget discussions.
In addition, council has directed administration to come up with four tax cut scenarios for the operating budget – a 10, 15, 20 and 30 per cent reduction in the municipal tax levy compared to 2019.
To do that, council tasked administration with looking at wage cuts, a reduction in the $4.5 million planned transfer to capital reserves, a portion of the $1.2 million surplus and a reduction in programs and services,
Councillor Chip Olver said she hopes to see financial support from the federal and provincial governments for municipalities, adding she believes the Federation of Canadian Municipalities (FCM) has been lobbying behalf of municipalities.
“Our provincial and federal governments stepped up for businesses and individuals, but they have not had a chance to step up with municipal support,” said Coun. Olver.
“I believe something will have to come forward from the province and federal government with municipal aid.”
Coun. Olver said one way for federal and provincial governments to respond to a crisis is through borrowing, but municipalities cannot run a deficit.
“When it comes to taxes, we still need to have revenue to provide critical and essential services,” she said.
“I still think we do everything possible to reduce everything we can, recognizing the impact on future years.”
Parks Canada was not immediately available for comment.
The federal agency did offer some financial relief to tourism operators in Banff National Park by deferring payments on commercial leases and licences of occupation without interest until Sept. 1.
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