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With around 80 per cent of property taxes being paid on time in the Thompson and Okanagan’s largest cities, the fears that many civic leaders had about paying their own bills have evaporated, at least in the short term.

Back in April, as COVID-19 hammered the province’s economy, cities throughout B.C. were trying to find ways to ease the pain for taxpayers. Most chose to delay the 10 per cent late payment fee for taxes that were paid after the July 2 deadline most cities had set.

Early on, there were fears that could lead to major cash flow problems if most people choose to delay paying. There was even talk in Vancouver about bankruptcy.

READ MORE: B.C.'s two largest Interior cities not facing bankruptcy, but it can’t be ruled out

At that time, the major ask by the cities was that the province delay the deadline for submitting money they collected to other agencies, particularly school board taxes that normally are due at the end of August.

The province agreed to let the cities hold onto that money until the end of the year and opened up new borrowing opportunities.

READ MORE: B.C. businesses getting property tax break from province but not residents

In the end, the measures seem to have worked well, both for cash strapped taxpayers and cities who really have one big payday – July 2.

“The current cash flow projections for 2020 do not show a requirement to draw from reserves to fund City Operations,” Cara Dawson, Revenue and Taxation Manager for the City of Kamloops said in an email.

But, that comment came with a very strong caveat.

“It is expected the effects of COVID-19 will negatively affect the City's cash flows for the next couple of years,” she stated.

In Kamloops, 82 per cent of taxes were paid on time. In Kelowna and West Kelowna that dropped to 80 per cent and Vernon came in at 73 per cent. Penticton normally has a tax due date of July 31 but moved that to Oct. 1 so does not have a tally on the amount of taxes paid to date.

All the cities on this list won’t charge the 10 per cent late payment fee until Oct. 1, except for Kamloops which is phasing in late payment fees at five per cent on July 31 and another five per cent on Oct. 1.

While a 20 per cent shortfall in tax revenue is significant, it’s not necessarily crippling. For one thing, property taxes make up only about 35 per cent of municipal revenues.

Plus, the fact that they can hold onto the cash destined for the province for schools until the end of the year gives them a cushion, especially if most taxes are paid before the end of September to avoid the late payment charges.

For example, in Kelowna, the 20 per cent of taxes still owed comes to $47.6 million out of the $265 million it’s trying to collect.

School taxes have been cut by 25 per cent for businesses because of COVID-19 so the exact amount owed is not yet known. But, in 2019, the City of Kelowna collected $71 million in school tax money for the province.

That means, the amount the city is able to hold back likely covers the existing short fall so the city’s cash flow is not a problem.

Those numbers are similar in the other Okanagan cities.

Cash flow, however, could become more of an issue come Jan. 1 if no more taxes are paid before the school taxes are due.

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