CBRM to review province’s low-rate loan offer

SYDNEY, NS — The economic impacts of COVID-19 may have caused the Cape Breton Regional Municipality to veer off its financial trajectory, but the municipality’s financial ship is still afloat.

And, with no end to uncertainty in sight, the province is extending a fiscal lifeline to Nova Scotia municipalities.

On Tuesday, Municipal Affairs Minister Chuck Porter announced a new loan program that will make $380 million available to municipalities suffering economic losses due to the coronavirus outbreak.

Chuck Porter

“During this unprecedented time, municipalities need support to address the financial challenges they are facing due to lost revenue,” Porter said. “This program will help close the gap so they can continue to provide programs and services to Nova Scotians.

On Wednesday, CBRM Mayor Cecil Clarke met with senior officials, including Chief Financial Officer Jennifer Campbell, to discuss whether the loan program could benefit the municipality. Council recently approved an operating budget of $157 million which is now essentially on hold.

“Technically, at this time, we don’t need to access it, but we’ll be ready to access it if needed, as our deficit forecast looks to continue to rise if things get any worse,” Clarke said.

Cecile Clarke
Cecile Clarke

“We’re in full spend mode on our essential services like public works with its snow removal, police, fires, waste management, it’s all running at full blast – we won’t get a better idea of ​​this. that we will be able to do until we get a timeline on when things are allowed to move forward so that we can gradually work out what we can do for recovery.

The mayor points out that Cape Breton Transit, which was booming before the coronavirus pandemic, is currently operating at a loss of around $120,000 per month.

“This deficit is nowhere near the millions that Halifax is losing, but it is on a scale that is just as impactful,” said Clarke, who called a special meeting of the CBRM board on Monday May 4 to discuss of the new provincial loan program.

This program essentially allows municipalities to take advantage of the special interest rates granted to the province. These rates are 1.1% and are locked. This compares to CBRM’s $44 million line of credit with prime minus one, which translates to a rate of 1.45% which is variable in nature.

Pam atmosphere
Pam atmosphere

“Yes, we have a line of credit above any expected impact, but the program offers a lower interest rate than our line of credit, so that may be something we want to take advantage of,” said Clarke, whose board passed an Operating Budget of $157 million that is now essentially on hold.

“We see this as the first stage of the province’s response to help municipalities, with the second stage of response coming later after we better assess the revenue streams that are affected, from tipping fees, facilities, public transit, parking meters, municipal by-laws. , police fines and deed transfers.

Clarke also said he would discuss the matter with Halifax Regional Municipality Mayor Mike Savage.

Meanwhile, Federation of Nova Scotia Municipalities President and Yarmouth Mayor Pam Mood agreed with Clarke that the loan program is a positive first step in helping municipalities.

“We are currently struggling due to the fallout from COVID-19 with loss of revenue, coupled with the inability to run a deficit, so this funding option will allow municipalities to continue to provide vital services to our businesses and communities. residents,” Mood said.

Under the terms of the program, municipalities will have six months to begin repaying and three years to repay in full. Funds will be made available within 24 hours of any signed agreement between the province and interested municipalities.

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