Newfoundland and Labrador's provincial flag flies on a flag pole in Ottawa, Friday July 3, 2020. (THE CANADIAN PRESS/Adrian Wyld)

Newfoundland and Labrador's aging population has turned a seniors' discount on property taxes into a financial burden for the tiny town of Appleton.

Town Mayor Garrett Watton says when he was elected three and a half years ago, Appleton's ten per cent discount offered to its senior citizens meant the municipality absorbed about $6,200 in lost property tax revenue.

But Appleton, like the rest of rural Newfoundland and Labrador, has a rapidly aging population and Watton says about a third of its residents are now over the age of 65. If Appleton offered the same discount in 2021, Watton says, the town would be out about $10,000.

"It's a lot of money for a small town -- it really is," he said in an interview Tuesday.

The average age in Newfoundland and Labrador is 45 -- the highest in the country, according to Statistics Canada. Studies from Memorial University in St. John's indicate the problem is particularly pronounced in rural parts of the province.

Appleton has a population of slightly fewer than 600 people and an annual budget of about $786,000, Watton said. The seniors' discount on property taxes would be fine, he added, if more young people move in or more businesses start up. But none of that is happening, he lamented. And residents keep getting older.

In fact, Watton said population projections indicate about half the people living in Appleton will be senior citizens within the next few years.

There could be many more Newfoundland and Labrador towns in Appleton's position, Sheila Fitzgerald, president of Municipalities Newfoundland and Labrador, said Tuesday. The province has 275 municipalities, most with fewer than 1,000 people. Young people are emptying out of smaller towns, leaving behind their parents and grandparents, she said.

"A while ago, seniors would have been only a small percentage of the population for rural communities throughout the province," she said in an interview. "Now it's getting toward the majority of their taxpayers. With a shrinking tax base, smaller communities are struggling."

Fitzgerald said something significant will have to change in order for many of these municipalities to survive. She suggests towns could get a portion of residents' income tax or of the province's HST.

Or, she said, towns could get lucky and find mayors like Watton. He's just 39 years old and he's trying to find a way to encourage young families like his to move to Appleton and stay there.

And while he's had to roll back the seniors' discount on property taxes for 2021, he said he's hoping to find a way to introduce future tax breaks -- perhaps based on income rather than age -- that could entice younger people to settle in the area.

"Every town needs to grow, or they're not going to survive, right?" Watton said.

This report by The Canadian Press was first published Jan. 12, 2021.