Municipalities loan $1.6M to operators of Truro’s Rath centre in dispute with CRA

The Rath Eastlink Community Centre in Truro, N.S., is facing financial challenges as a result of the Canada Revenue Agency’s (CRA) clawback of COVID-19 pandemic relief funds. The Central Nova Scotia Civic Centre Society, which operates the facility, is currently fighting the CRA’s decision after losing its initial appeal and awaiting a second one.

The society received nearly $1.3 million through the Canada Emergency Wage Subsidy, but after an audit, the CRA requested the funds be returned, claiming the group did not qualify for the relief program. In addition to the wage subsidy repayment, the CRA is also withholding $186,000 in HST returns, with accumulated interest totaling over $300,000.

Matt Moore, executive director of the society, expressed concern over the financial impact of the CRA’s decision, mentioning legal fees and auditor fees that the organization is now facing. The society is determined to challenge the CRA’s ruling, seeking support from the Town of Truro and Municipality of the County of Colchester, which have provided a repayable grant to help cover the repayment and halt the accrual of interest.

Both municipalities, which have representation on the society’s board, decided to offer financial assistance to prevent further financial strain on the organization. The grant comes with a 1.5% interest rate, allowing the society to repay the CRA and avoid additional interest charges. Colchester Mayor Christine Blair and Truro Mayor Cathy Hinton expressed hope that the second appeal will be successful, but they are prepared to consider taking over the facility’s operations if necessary.

Beyond the CRA issue, the society is also facing challenges related to the building’s heating and cooling system, which requires repairs or replacement. Despite these financial obstacles, Moore emphasized the value that the community center brings to the local residents, especially during times of crisis such as post-tropical storm Fiona.

The ongoing financial struggles have put a strain on the organization, which was originally focused on supporting its staff and aiding the community’s recovery during the pandemic. The society remains optimistic about overcoming the current challenges and returning to normal operations with the support of the municipalities and the community.