City looking at 'last resort' option to go after unpaid business taxes

The city of Winnipeg is looking at a “last resort” option, that’s never been enforced, to go after outstanding business taxes.

"It's not something you'd want to do, it's an absolute last resort type of measure," said City Finance Committee Chair Jeff Browaty.

It's Section 365 in the city charter. The provision allows the city to place an order on a business to cease operations until the owner can clear up a delinquent business tax bill.

A new report says the city can seize assets for unpaid taxes, but in some cases, they're insufficient to cover the entire amount owed.

"Our options are fairly limited when it comes to collecting business taxes at the moment,” said Browaty, "This would give us an opportunity to close the business if they're not paid up"

The city says prior to 2023, there were $651,000 in outstanding business taxes.

It notes using Section 365 would be a last resort after all other efforts fail, including sending multiple notices and warrants.

However, Winnipeg Chamber of Commerce President Loren Remillard says coming out of the pandemic businesses are still hurting financially and a measure like this won't help.

"We might be post pandemic but we're pre-recession," said Remillard.

He says they want to work with the city to figure out another way for these bills to be paid, as he questions how shutting someone down will enable them to pay off their tax debt.

"No one wins when we close businesses,” said Remillard. “It effectively removes the possibility of taxpayers ever seeing the money that is…owed to the city."

Browaty says this is not about going after businesses that are facing temporary struggles.

"We do believe that there may be a handful of businesses who are refusing to pay because they know about loopholes in the business tax and it's not fair to those that are paying properly and on time," said Browaty.

The report goes to the executive policy committee next week. It is recommending an appeal body be set up for businesses who wish to challenge a Section 365 order.