The bustling city of Winnipeg is considering an extreme measure, a final straw initiative never before deployed, to reclaim outstanding business tax dues. The city’s finance committee chair, Jeff Browaty, defines this procedure as a last resort, the polar opposite of a favourable method.
The initiative, designated Section 365 in the municipal charter, bequeaths the city authority to impose an order, halting business operations until a delinquent tax obligation is satisfied by the proprietor. According to a recently published report, the city possesses the right to seize assets in order to compensate unpaid taxes, although in numerous cases, the assets are insufficient for covering the debt in full.
“Our present options for collecting business taxes are relatively limited,” Browaty admitted. “This measure, however, would present us with an opportunity to shut down a company if their tax duties are not met.”
As per the city’s records, prior to the year 2023, outstanding business taxes were calculated at a staggering $651,000. The report stresses the use of Section 365 only as an extreme measure, following the failure of all other attempts including the issuance of multiple notifications and warrants.
Nonetheless, Loren Remillard, President of the Winnipeg Chamber of Commerce, argues that in the aftermath of the pandemic, many businesses are still grappling with financial instability, indicating that an approach of this nature could amplify these difficulties.
“The aftermath of the pandemic might be over, but we’re in the preface of a financial downturn,” Remillard voiced his concerns. He remains optimistic about formulating other methods in conjunction with the city to clear these outstanding bills, while expressing doubts on the efficacy of shutting down someone’s business to facilitate the clearance of their tax dues.
Remillard conveyed in no uncertain terms, “Shutting down businesses benefits no one. It essentially excludes the probability of the city ever receiving the money owed to them by taxpayers.”
Browaty clarified that the measure is not intended to target businesses facing temporary hardships. “It is likely that a small percentage of businesses intentionally refuse to pay on account of knowing the loopholes in the business tax, which is unfair to the law-abiding businesses paying promptly and correctly,” stated Browaty.
The report is scheduled for review by the executive policy committee in the forthcoming week. It suggests the establishment of an appeal body for businesses desiring to oppose a Section 365 order.
