Montreal residential property owners will see their tax bills rise by an average of 4.9 per cent in 2024, as ongoing inflation spurs the biggest tax hike the city has seen in 13 years.
But it’s the owners of non-residential buildings on the island who will feel the largest bite, as their bills increase by as much as 14 per cent in the borough of Lachine and 12 per cent in St. Laurent. Overall, non-residential taxes are rising by an average of 4.6 per cent, triple the rate seen in 2020.
Mayor Valérie Plante presented the city’s operating budget Wednesday, outlining just under $7 billion in spending. The largest portions will go to public security, which accounts for 18 per cent of the total expenditure, and servicing the debt, which will eat up 16.6 per cent.
City officials said the higher-than-usual tax hikes were because the city was catching up for lower increases instituted during the pandemic years, and taking into account still-high inflation rates.
“The budget we’re presenting today is a responsible one,” Plante said. “It’s a budget that is stable, and connected to the needs of Montrealers.”
Asked why the city didn’t institute more cuts to lessen the tax burden, Plante said administrators had tightened expenses, but also responded to citizens’ demands that services like libraries and hockey arenas and snow clearing not be diminished.
“It’s a modest increase given the increase in costs to the city due to inflation,” she said.
The lion’s share of the $234 million (or 3.5 per cent) increase in expenses over last year’s budget was attributed to:
- An additional $48 million to the Autorité régionale de transport métropolitain to supplement the métro Blue Line extension, the REM light-rail system and free transit for seniors
- $35 million to the Montreal police, primarily to hire just over 100 additional officers
- $38 million in payments to the boroughs
- $25 million for garbage and recyclables collection
- $11 million for snow removal
- An additional $13 million to the Bixi bike-sharing service, notably for the addition of a winter bike service
The average tax hike for non-residential properties will be 4.6 per cent in 2024. In the 2020 budget, released before the COVID-19 crisis hit, the non-residential tax hike was 1.5 per cent.
The average single-family home in the city is now valued at $651,406 and the average tax will rise by just under $200 to $4,588. Tax increases reflect a rise in the general tax rate, the water tax, and a tax to supplement public transit.
Last year at this time, the average single-family home was valued at $592,167. Residential taxes rose by 4.1 per cent, which at the time was the biggest jump seen since the 5.3 per cent seen in 2010.
City administrators said the tax hikes will remain below the rate of inflation, which the city said averaged 5.2 per cent in the Montreal region between August 2022 and August 2023, according to figures presented by the Institut de la statistique du Québec.
At the height of the pandemic, there was a tax freeze in 2021 and a hike of two per cent in 2022.
Alan DeSousa, the Ensemble Montréal opposition spokesperson on finance, accused city officials of “spending like drunken sailors” and using inflated inflation estimates to justify it.
“This is a budget that has a blatant disregard for Montrealers,” DeSousa said. “To come in at 4.9 per cent, when over two years that’s nine per cent. That’s a huge amount.
“I think it’s a promise broken when the mayor had promised to keep residential tax increases lower than inflation. The Conference Board of Canada has pegged inflation at 2.5 per cent for 2024, so this is nearly double.”
DeSousa said Montrealers shouldn’t be surprised.
“This is a gravy train that has kept rolling over the last six years. We’ve had more than 2,000 people added to the payroll, and close to $2 billion to the budgets in six years,” DeSousa said.
Plante conceded part of the budget increase was attributable to hiring 400 more employees, but said many of them were out of the city’s control. Nearly half were hired by the boroughs, and another roughly 100 were police officers hired under a joint agreement with the Quebec government to increase public security. The city was working to cut about 100 employee positions, she said.
The increase in non-residential tax rates was attributed to inflation and measures that gave a 16-per-cent break to owners of properties valued at less than $900,000. Boroughs like Lachine and St-Laurent that have a large industrial base were particularly hard hit by significant rises in the cost of industrial properties.
Ville-Marie, home to the majority of the city’s office buildings that have seen vacancy rates plummet, will see its non-residential tax rate drop by 0.9 per cent.
Speaking for suburban municipalities on the island, Montreal West Mayor Beny Masella said this is another case of the city passing on expenses unjustly to the 15 demerged cities.
“We have to go back to the table and figure out how to make up some of the increase with cuts to our local budgets,” Masella said. “But the reality is that we’re at the point where I don’t have any room anymore. My local budgets have been compressed year over year trying to make up for the agglomeration shortfalls. It’s the same for my colleagues.”
He said suburban municipalities are billed for services based on a percentage of their property values, rather than on how much they use those services. That means residents of Senneville, for example, where there is no public transit service, will still pay for transit at a disproportionate amount.
“It’s come to the point when this is farcical, this agglomeration budget,” he said.
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The city also presented its 10-year infrastructure budget, estimated at $23.9 billion. The money will go toward repairing roads and sewage systems, housing, public security and “climate change resilience,” which includes building more water-retention basins and parks to handle flooding.
The presentation of the budget would normally have been presided over by Montreal executive committee chairperson Dominique Ollivier, but she resigned as Plante’s No. 2 at city hall Monday amid controversy over her expenses when she headed the city’s public consultation office.
Asked about the fact that the office had requested a budget increase from $3 million this year to $3.4 million next year, Plante said there was “no question of adding more money” and pledged to “take care of the cleanup” if the office didn’t do so itself.