Waiving City of Whitehorse business licence fees this year for most businesses in town would cost the city close to $500,000.
The figure was presented in a report at Whitehorse city council’s July 20 meeting outlining four possibilities if council were to pursue such support for businesses in light of COVID-19.
The report comes out of a city council request made to staff for ongoing reporting on the city’s actions in response to COVID-19 impacts.
City planner Mélodie Simard outlined a number of federal and territorial programs aimed at assisting local businesses impacted by the pandemic.
Among them the Yukon Business Relief Fund will cover fixed costs for businesses that experience a loss of 30 per cent-plus in gross monthly revenue while the Northern Business Relief Fund from the federal government covers fixed costs including business licence fees provided they meet a number of criteria. Most recently the federal government announced an extension of its program to March 31, 2021 or to a maximum of $100,000, whichever is first.
In outlining the four options to consider in waiving business fees, Simard noted the option of retroactively waiving the fees for all those not enrolled in the NBRF (which covers the fees for those enrolled) would come in at a cost of $485,030.
“At the time of this writing, 330 Yukon businesses have applied for NBRF,” Simard said. “Administration does not know how many are Whitehorse businesses, but using a speculative assumption of 80 per cent would mean that 264 are Whitehorse businesses.”
That would leave another 2,709 business that could potentially see their fees retroactively waived if council pursued that option.
“This option would have a significant financial impact on the city and likely is not needed for all Whitehorse businesses as some have not been impacted by COVID-19 or have been positively impacted.”
Another option could be providing a retroactive waiver for businesses that have seen a 30 per cent loss in monthly gross revenue but do not meet the NBRF criteria.
Simard noted that since April 46 businesses have enrolled in the Yukon government’s program, but did not qualify for the federal program.
“It is difficult to estimate the total cost to the city as business licence fees vary,” Simard said. “Should all businesses have a standard business licence fee, the total cost to the city for the 46 businesses would be $7,360. This number could potentially increase as applications for YBRF are still being accepted until Aug. 31.”
Simard also outlined the possibility of extending business licence renewals for those that were under order to close during the pandemic such as bars and personal care services. There were also partial closures such as dine-in restaurants and non-urgent dental care.
“It should be noted that there are other sectors, such as tourism operators, that were not ordered to close but were significantly impacted,” Simard stated of the potential extension for business licence renewals. “Support for these businesses is not addressed.”
She also pointed out of all the options put forward; this would represent the greatest administrative burden.
“Although the number of fully closed businesses is known, it is not clear how the city would address partial closures,” she said. “Nor (is it) clear whether there should be proration to address some or all businesses ordered closed have now reopened. Therefore, the financial implication of this alternative could not be estimated at the time this report was being prepared.”
Finally, Simard said council could opt not to take any further action, citing a resolution of April 9 not to charge interest and penalties for late payments on utility bills and other city services until Sept. 30 with the exception of property taxes.
“The cost implications for the city are not expected to be significant as they only cover penalties and interest, not the application fee,” Samar said.
The report had council members asking Simard for more information, with Coun. Samson Hartland wondering about economic information that may be available and Coun. Steve Roddick asking when the city will get its next variance report showing where the city’s budget is at for 2020.
Without understanding the city’s financial situation, it’s difficult to make such decisions, Roddick noted.
While the information wasn’t readily available, officials noted the reports for the second quarter, which ended in June, will likely be coming forward in late August after council’s summer break.
Speaking to reporters after the meeting, Mayor Dan Curtis noted the costs of retroactively waiving business licence fees is a major concern that could have long-term implications for the city, particularly if the city went with the option to waive fees for all businesses not enrolled in the federal program.
“We have to look at the long-term (impacts),” he said, highlighting the effect on city taxpayers.
Contact Stephanie Waddell at firstname.lastname@example.org