Montreal Gazette

Business groups decry ‘worrisome’ tax increases

- JACOB SEREBRIN jserebrin@postmedia.com

Business groups say they’re disappoint­ed with an average three per cent increase in the non-residentia­l property tax rate included in Montreal’s 2018 budget.

It’s the biggest average increase in non-residentia­l property taxes since 2012.

“It’s worrisome that the first budget they have, when it’s still transition, when it’s not their big items, comes with an increase of municipal taxes beyond inflation,” said Michel Leblanc, the CEO of the Chamber of Commerce of Metropolit­an Montreal.

“Montrealer­s are among, if not the highest taxed in North America, (so) this is not necessaril­y a good signal.”

General tax charges, which include property tax and the road tax, will rise by 2.1 per cent for nonresiden­tial properties, the largest increase in those taxes since 2013.

That matches the 2.1 per cent inflation rate the Conference Board of Canada has forecast for Montreal in 2018.

It’s the first time since 2015 that general non-residentia­l tax charges have increased more than residentia­l rates.

“It’s not good news. The total tax burden for businesses in Montreal is four times what it is for residentia­l taxpayers with the same assessment,” said Simon Gaudreault, the director of economic affairs at the Canadian Federation of Independen­t Business.

“Small businesses are disproport­ionately footing the bill.”

The water tax, which is based on property values, will increase by 0.8 or 0.9 per cent for non-residentia­l properties, depending on the borough.

It’s the first water tax increase since 2012.

Businesses in Outremont will see the biggest increase in overall tax rates — 6.3 per cent. That’s followed by the Sud-Ouest and Rosemont–La Petite-Patrie, where overall non-residentia­l tax rates will rise by 4.6 per cent.

Louis-David Malo, the project coordinato­r at the Société de développem­ent commercial Laurier Ouest, which represents merchants on Laurier Ave. in Outremont, said he doesn’t understand why taxes are rising so much in the borough.

“It’s a surprise. We were expecting maybe two per cent,” he said.

Most of the businesses represente­d by his organizati­ons are small, local businesses, Malo said.

“This rise is going to directly affect their cash flow,” he said.

“It’s directly affecting families, individual­s.”

Only St-Laurent will see a decline in general tax charges, of 0.1 per cent. With the increase in the water tax, non-residentia­l taxes in that borough will rise by 0.9 per cent, the lowest increase of any borough.

Even before the increase, Montreal had the highest effective municipal property tax rates in the country, according to the C. D. Howe Institute.

The budget also includes $30 million for economic developmen­t projects, which will be funded through an agreement with the Quebec government.

At least some of the money will be used to support merchants affected by road constructi­on, Mayor Valérie Plante said at a news conference to discuss the budget.

However, details won’t come until spring.

“We’re working really hard because the needs are now. There are many constructi­on sites coming up,” she said.

The CFIB’s Gaudreault said it’s important for the city to move forward with concrete plans soon.

“For us, timing on this one is going to be important,” he said.

The opposition at City Hall criticized the administra­tion for not making specific plans.

“We’re very concerned that they’re receiving $30 million and the only project that they’ve earmarked are 11 additional hires in the economic developmen­t service,” said Lionel Perez, the opposition leader.

Perez said it was “incomprehe­nsible” that there was no dedicated money to support merchants affected by road work.

He also criticized the administra­tion for not moving forward with a promise to establish a lower tax rate for local business.

The administra­tion said that’s still in the works.

Leblanc said that while the CCMM wishes there were more details on the plans to review the tax treatment of commercial properties and to support merchants affected by constructi­on, the organizati­on understand­s that this will take time.

This rise is going to directly affect their cash flow. It’s directly affecting families, individual­s.

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