Essex County won’t provide tax deferrals for tariff-struck businesses

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Essex County won’t be implementing a tax deferral program to help local businesses hit by tariffs levied by the United States. 

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In May, the county implemented a “buy Canadian” procurement policy in response to the tariffs but council also asked the county’s administration to consult with its seven municipalities to explore ways to provide tax relief for businesses hit by U.S. tariffs. 

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The region has about 350 tool and mould shops that are directly involved with the auto industry that were being hit by the tariffs, representing about 6,000 employees, Tecumseh Mayor Gary McNamara said at the time, noting the proposal was for a tax deferral initiative, not tax forgiveness. 

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But a report presented to council earlier this month by Melissa Ryan, the county’s director of financial services and treasurer, concluded that a county tax deferral program would not be practical. 

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“While there was strong empathy for the challenges faced by the business community, the collective view was that a local deferral program would not be the most effective or practical tool at this time,” the report said. 

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Among the reasons cited were robust federal and provincial supports already in place, the timing of the taxation year, it would be operationally and administratively complex, it would delay cash flow to the municipalities and its impact would be uncertain. 

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So far, only Toronto has such a program and it is temporary, limited in scope and ends in November, the report said.

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“Businesses impacted by tariffs currently have access to a broad and well-resourced suite of relief programs delivered by the federal and provincial governments,” the report said. 

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Those programs include relief from duties and remission of payment, corporate tax deferrals, working capital loans and targeted sector supports. 

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As well, initiating a tax deferral program mid-year would require recalculating bills and payment schedules, resulting in a significant administrative challenge, the report said. 

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Municipal treasuries said it would place “considerable strain on existing staffing resources,” especially in smaller municipalities. 

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And since what was being considered a tax deferral, the municipalities wouldn’t lose money, but the program would “create a financial obligation that needs to be repaid at some point in the uncertain future,” the report said. 

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“A tax deferral program may exacerbate the financial hardships facing the business,” it concluded. 

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The county plans to “monitor impacts and identify other tools that may support business resiliency,” the report says. 

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Essex county council voted to accept the report and approve a motion that “no further action be taken regarding a municipal property tax deferral program at this time.” 

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