Work Continues Towards Finalizing City Budget: Layoffs Part of Balancing Efforts

St. John’s City Council continues to work towards finalizing the Budget for 2021 which will be announced at a regular meeting of Council on December 7, 2020. This is the third year in a three-year budget plan which began in 2019 after an extensive public engagement process in 2018.

Planning for a balanced budget in 2021 has proven to be more challenging than anticipated given the uncertainty of the current economic climate and the financial pressures of 2020. All municipalities are required by legislation to balance their budgets and are not permitted to plan for deficits – meaning that Council and staff must find ways to ensure that expenditures do not exceed revenues in any fiscal year.

“In order to balance the budget for 2021 Council has had to make some difficult decisions to reduce expenses, including staff reductions,” explained Councillor Dave Lane, Council lead for finance.

In total, 16.32 full-time positions will be reduced across the organization. While 10 of these are currently-vacant positions that will not be filled, 8 individuals have received lay-off notices and are in the process of determining whether or not they are able to use their bumping rights to find work elsewhere in the organization. This process will impact other employees and is expected to be concluded before the end of the year.

In addition, due to the uncertainty of when large-scale entertainment events such as hockey, basketball and concerts will return St. John’s Sports and Entertainment Ltd. has terminated five full-time positions and laid off a further two full-time positions.

“Going forward, staff have been directed to look carefully at whether or not replacements are necessary for both unionized and management employees who announce their retirements,” said Councillor Lane. “While reducing our staffing is a difficult choice to make, the impact of these layoffs will primarily be felt internally in administration areas.”

Council’s primary goal in planning for 2021 has been to balance the budget with minimal service impacts and no increase in property tax rates.

“We fully appreciate the hardships the pandemic has caused many households and businesses in our City and do not want to add any pressure in terms of increased taxation,” said Councillor Lane. “We are facing a significant deficit coming out of 2020 and projecting into 2021 as well as a level of uncertainty that requires prudence in spending and fiscal management. Unfortunately, this results in staff reductions and the exploration of ways to raise non-tax revenue as we strive to balance our budget for next year.”

Budget 2021 will be announced at the Regular Meeting of Council on December 7, 2020.