Worsening Economy Likely Responsible For Large Jump In Tax Arrears
Called “worrisome” by at least one councillor the issue of a big jump in total tax arrears came up as part of the first quarter financial report.
According to the report tax arrears year over year - at the end of the first quarter - have increased $822,590.
Tax arrears at the end of the first quarter (March 31st) 2023 were $2,998,855 versus $3,821,445 on March 31st, 2024.
The increase year over year was 27.43 percent. (See chart below)
A comparison of tax arrears for 2022 - 2024 as of March 31, 2024 - City of Moose Jaw graphic
Despite the increase of total tax arrears the year over year value of outstanding property tax liens was down slightly from $1,838,213 at the end of the first quarter in 2023 to $1,802,607 at the end of the first quarter of 2024.
The amount of tax payment plans took a big jump from $1,160,642 on March 31, 2023 to $2,018,837 on March 31, 2024. The percentage of property tax liens as part of total tax arrears showed an improvement from 61 percent in 2023 versus 47 percent in 2024. (See chart below)
Chart breaking down Total Property Tax Arrears - City of Moose Jaw quarterly report
“That seems to be a trend we have had over the last couple of years as our arrears have been trending upwards,” finance director Brian Acker said.
The trend of individuals having problems pay for their bills - due to inflation and wages not rising - has increased over the same period according to Statistics Canada.
By April 2022 40 percent of Canadians said they were struggling to pay their bills especially for food and shelter.
SOURCE - https://www.statcan.gc.ca/o1/en/plus/3096-snapshot-how-inflation-affecting-canadians#
Councillor Kim Robinson asked if there was a plan to correct the $1 million more in additional tax arrears.
Acker said the City had a plan.
“We certainly do have a plan. We actively go about a process of tax enforcement for those properties,” he said.
“The reality there is at the end of the day many of our citizens are facing hardships in terms of the amount they can pay. So there is only so much we can do in terms of tax enforcement”
Acker said the City tries to “be as flexible as possible” through arranging payment plans and those types of measures.
The City does have much stricter enforcement measures such as taking the property in question for outstanding property taxes. The property is sold and monies from the sale are put against the outstanding taxes and any left over goes to the owner.
“We do that as an absolute last resort. But as certainly as we move forward we are going to continue to monitor and there may need to be additional enforcement,” he said, adding “…ultimately at the end of the day there may be more properties the City needs to take. It isn’t something we would want to be actively pursuing at this point.”
Commenting on the report Councillor Crystal Froese said she was cognizant about the financial challenges many people are facing.
“People are struggling. This is a difficult time absolutely. It is a difficult time for people in our city. It is a difficult time for the City,” Councillor Froese said.
To assist with determining what category of property is where the problems are with tax payments the report now carries a chart. (See chart below)
The largest percentage of property taxes owing is in the residential class a change of from being in the commercial class of a few years ago.
The chart shows ratio of arrears for commercial property is at 45 percent on March 31, 2024.
Councillor Jamey Logan spoke about the increase.
The $825 K ($825,000) is worrisome. Year over year that is the highest amount I can remember (of an) increase,” Councillor Logan commented.