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Beth Gaudet, the P.E.I.'s Provincial Tax Commissioner speaking before a Standing Committee on Tuesday. Gaudet said the Province does not interfere with mortgage agreements signed between banks and homeowners.
Nigel Burns, the director of economics, statistics and federal fiscal relations and Beth Gaudet, provincial tax commissioner, appear before a standing committee on Tuesday.
The opposition Greens have raised questions about the possibility that large banks may be profitting from Prince Edward Island's decision to defer collection of property taxes.
The province deferred payment of property taxes for the 2019 year until Dec. 31, 2020, early on in the COVID-19 pandemic. The measure was intended to provide immediate financial relief for working Islanders when the most stringent public health measures shut down businesses and caused significant layoffs.
But during a meeting of the standing committee on public accounts on Tuesday, Green MLAs Karla Bernard and Michelle Beaton suggested large financial institutions may be collecting property taxes from mortgage holders prior to the December due date.
Bernard posed a question on the matter to the province’s tax commissioner, Beth Gaudet.
"Did banks have the opportunity to defer property payments on behalf of mortgage owners?" Bernard asked.
"They do. And that would be between them and their property owners," Gaudet said.
“If the bank is taking a certain amount of money monthly, then the property owner would need to talk to the bank about doing that. We wouldn't get in the middle of that."
Beaton then asked if the Department of Finance has identified banks that have not yet submitted property taxes that would have been normally collected automatically as part of mortgage payments.
"So when you get your bank statement for your mortgage you see that you're accumulating money that is there in trust to go and pay your property taxes,” Beaton said.
“Did you take that into consideration that banks might hold onto that and essentially collect interest on it because they're holding it in trust?"
Gaudet said her department is not responsible for the conditions set out in mortgage contracts.
"Again, the contract between a mortgage holder and a property holder is simply that — a contract. We're not privy to it," she said.
Both opposition parties have questioned whether the late deadline for paying taxes will be an added burden for Islanders still struggling to find their financial footing in a prolonged economic downtime. The deadline will fall about five months before a deadline for paying 2020’s taxes.
"I'm wondering if there's any consideration being given to how people are going to pay all of these bills back, all at once — deferred mortgages, credit card bills," asked Green MLA Karla Bernard.
"At this particular point in time, there hasn't been any new regulations proposed,” Gaudet said.
“Right now the regulations as they stand, are that there's an opportunity for property owners to take the time they need in 2020 without any interest.”
Gaudet said her department has so far collected about 30 per cent the level of the typical tax revenue for the year 2019.
In June, interim Liberal leader Sonny Gallant had asked Finance Minister Darlene Compton what the government would do for Islanders unable to pay their bills after the Christmas season.
“We’re more than willing to work with any Islander and if they come forward now to let us know that they anticipate they’re going to have problems,” Compton told the legislature during question period.
Questions on the matter were asked on many occasions by the Liberals throughout the spring sitting.
On Tuesday, Gaudet also urged Islanders having difficulty with their tax bill to reach out to her office.
"We certainly know, as we do in any year, there is going to be people who are in arrears after Dec. 31,” Gaudet said.
"Our recommendation would be: 'call us'."