Montreal Tax Increase – The Valérie Plante administration in Montreal has given a preview of its first budget and property taxes will rise in 2018 by an average of 3.3%. This has produced outcries that Plante’s Projet Montréal party has broken a key electoral promise not to raise taxes above the inflation rate. Inflation is expected to reach 2.1% in 2018 according to the Conference Board of Canada.
“The Plante-Dorais administration is demonstrating a lack of budgetary rigor in not respecting the Montreal taxpayers’ capacity to pay. She is breaking one of her main electoral promises..,” said Lionel Perez, leader of the opposition Mouvement Montréal (formerly Equipe Denis Coderre). The party’s financial critic, Alan deSousa, went on to claim that the majority of Montrealers would not have voted for Plante if they had known that taxes under her administration would increase beyond inflation.
Earlier, Plante held a press conference defending the budget, flanked by her chairman of the Executive, Benoit Dorais. By breaking down the tax increase into its component parts, they claimed to have respected their promise: “The increase in tax charges under city council jurisdiction is limited to 1.9%for residential property and 2.1% for the non-residential sector. This average variation reflects responsible fiscal practices and is meant to support services to Montrealers,” said Dorais.
It is true that by treating the 1.1% increase in the water tax separately from the general increase in taxes, Projet Montréal is basically respecting its promises. But it is unclear if most taxpayers will see it that way…
Projet Montréal also emphasized the importance in spending on water infrastructure now: “It is thus imperative that we continue to invest in water infrastructures so as to ensure that they are repaired and upgraded. As well, Montréal must take appropriate measures to meet the requirements of the Stratégie québécoise d’économie d’eau potable. To offset the major deficit in water infrastructure investments, this year’s total tax charges include an increase in water tax, namely of 1.1% for residential properties and 0.8% for non-residential properties.”
Projet Montréal also trumpets its increased investments in such areas as public transit, snow clearing, housing, assistance to business, and repairing potholes. Montreal’s debt will not be increased with this budget.
The average municipal evaluation on a single-family house in Montreal is $427,524; for the owners of such a house, the 3.3% increase equals an additional $118 in taxes to pay annually. Last year’s increase was only about half as much. This 3.3% average hides wide variation between Montreal’s 19 boroughs from a high of 5.6% in Rosemont La Petite-Patrie to a low of 0.7% in LaSalle.
Taxes on commercial properties are also up; the city-wide average equals 3.0%. By borough, the sharpest increase is in Outremont (6.3%) while the lowest increase is in St. Laurent (0.9%).
The 2018 Montreal budget is pegged at $5.5 billion, up some 5% from 2017. The population of Montreal is some 1.7 million inhabitants. The Plante budget will be voted on at the January 24 city council meeting where Projet Montréal holds a majority of council seats.