Interest on unpaid property taxes should drop now, say P.E.I. Liberals

The 18 per cent interest rate on unpaid property taxes is too high and should be reduced immediately, according to P.E.I.'s Liberal finance critic and former finance minister Heath MacDonald.

He said a lot of Islanders are struggling with their finances due to layoffs and business closures during the pandemic circumstances beyondtheir control. He'd like to see the rateontaxes in arrears reduced from 18 per cent annually to between four and six per cent.

"There's still a lot that are hurting and a lot of uncertainty going forward, especially if you look at the tourism industry and the service sector on whether some businesses are even going to reopen orhow many people they're going to hire," said MacDonald.

"We still have apart of our society out there that are very vulnerable and I think everything government can do right now will alleviate some pressure and stress for those individuals," he said.

Finance Minister Darlene Compton saidthe rates will be reduced to 12 per cent annually, which is in line with what the other Maritime provinces are charging.

"We want to ensure we're being fair to Islanders but we don't want it to be a loan to Islanders. We want to ensure that the people understand responsibility in paying their property taxes and making sure that they pay them on time," she said.

'Maybe he should've done it himself'

She said government recognized some Islanders areexperiencing financial hardships due to the pandemic that's why all payments were deferred until the end of 2020 instead of propertyowners having to make three payments during the year.

"We realized that we want to ensure Islanders are not in a hardship as far as paying their property taxes," said Compton.

"If he (MacDonald) was concerned about this before maybe he should've done it himself," she said.

However,the reduction in the interest ratewon't happenuntil Jan.1, 2022.

It wasn't possible tomake the changes earlier because budgets were already set, said the finance minister.

Property tax represents about 11 per cent of the province'srevenueand is necessaryfor the province to deliver programs like health and education.

As of Dec. 31, 2020, 40,464 Island propertyowners had taxes owing the province, totalling more than $35.6 million, said the finance minister.

As of Feb. 28, some had paid their taxes and the amount owing was reduced to$23.7 million, which is within half a percentage point of the outstanding balance at this time last year, according to the province.

MacDonald, though, said Islanders need help now, notingthe other Maritime provinces reduced their interest rates earlier this year.

"It's that bill, it's the Visa bill, it's the uncertainty of not knowing whether you're going back to work," he said.

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