Tax Collection Policy Changes

At the November 12, 2019 Regular Meeting of Council, Council approved By-law 19-51 to adopt a revised Tax Collection Policy. The Policy sets the frame work for how taxes are collected and how properties in arrears are to be dealt with while taking into consideration changes made to the Municipal Act in 2018 regarding Tax Collection.

Taxes are a major revenue source for the Municipality. As the report to council highlighted there are a large amount of properties (194) that owe just over 5 Million in taxes, that are in arrears by 2 years. With the changes to the policy the Municipality now has the authority to use a third-party collection agency to collect those taxes or to sell the properties to collect the back taxes.

The following information is excerpts taken from the report presented to Council at the meeting (a copy of the full report is available on the Municipal website as part of the November 12th, 2019 regular council meeting agenda);

  • Tax Collection is necessary for the continued operations of a Municipality. It is also necessary in terms of fairness for other taxpayers.

• Using a third party is expected to increase collections and ensure enforcement of the Policy for several reasons;

  • limited resources within the Municipality. Much of the process is also legal oriented;
  • Expertise - proposed firm is a legal firm, thereby insuring all possible avenues are pursued. This should give extra weight to collections process as well; 
  • third party means less chance of connection to taxpayer and therefore less pressure to not collect.

• As of January 1, 2019, the total amount owing for properties that are 3 years or more in arrears is $4,749,017.83. There are a few properties that make up a significant proportion of this amount. However, the fact remains that there are a significant amount of taxes outstanding.

• For properties more than 2 years in arrears, the total amounts outstanding for taxes are over $5 million.

• These amounts do not include accounts receivable for service charges, etc.

In order to ensure the collection of amounts owing is maximized, Agreements will be considered. The term (amount of time to pay amount owing) may differ based on individual circumstances. However, the term the Municipality will seek will generally be short in nature in order to limit liability and maximize amount recovered.  It is important to note that fees incurred through the collection process will be added to the taxpayers outstanding balance.

Thursday, January 2, 2020