Plante puts her stamp on the city
Business groups and suburban mayors hail administration’s new budget
Mayor Valérie Plante’s first budget 10 months ago was an easy act to follow. On Thursday, the Plante administration tabled a second budget that seeks to mend fences with merchants and reassure homeowners dismayed by its previous effort, which raised residential property taxes in 2018 by 3.3 per cent. Residential property tax bills will rise next year by an average of 1.7 per cent under the $5.7-billion budget — about the projected inflation rate — while taxes on commercial properties will go up by an average of 1.3 per cent. Businesses will also get an additional break: a 10 per cent reduction in taxes on the first $500,000 in property evaluation. “With the 2019 budget, we’re going even further in reducing the tax burden on the vast majority of non-residential properties,” Plante said at a press conference in the Old Port before the budget was tabled at a special session of city council. “It is the first time that an administration puts forth a strategy to reduce the tax gap between residential and non-residential properties. We’re really proud of that,” she said.
The shot in the arm for local businesses will help maintain the vibrancy of urban neighbourhoods that give the city its unique character, Plante said. “In practical terms, it is the owners of the corner restaurant, the local café, book stores and the mom and pop stores that will get a tax break. This has never happened since the creation of the new city of Montreal back in 2002,” she said. Merchants who lost business because of construction projects will also be eligible for compensation retroactive to Jan. 1, 2016, at a cost of $5.2 million, she noted. Plante came under fire last year for reneging on an election promise not to raise taxes by more than the inflation rate. On Thursday, she referred to next year’s budget as “our first budget,” saying the last one reflected a transition from the previous administration, which had left a $358-million shortfall. While residential taxes are only going up by 1.7 per cent on average, tax bills will vary by location. They’ll rise the most in Côte-des-Neiges—Notre-Dame-de-Grâce (2.75 per cent), Rosemont—Petite-Patrie (2.58 per cent) and Île-Bizard—Ste-Geneviève (2.53 per cent). Average property tax bills will increase the least in Lachine (0.55 per cent), Rivière-des-Prairies—Pointe-aux-Trembles (0.63 per cent) and St-Léonard (0.81 per cent). The Conference Board of Canada is projecting the inflation rate in 2019 will be 1.72 per cent in Greater Montreal and 2.1 per cent in Canada. For the average single-family home in Montreal, valued at $457,867, the tax bill would be $3,968 next year — $51 more than in 2018. The owner of the typical condo, valued at $322,067, would get a tax bill of $2,791 — only $9 more than this year. Hardest hit by residential increases will be apartment buildings of six units and more, which will see taxes go up by 4.13 per cent in 2019. Taxes will rise by 1.57 per cent on multiplexes with two to five units, while on single-family homes they will go up by 1.31 per cent. For condos, taxes will rise by only 0.32 per cent. While business groups and suburban mayors hailed the budget as a vast improvement, the municipal opposition accused the administration of raising “the debt to record levels.” Plante is “using her credit card to pay for today’s groceries,” said Ensemble Montréal leader Lionel Perez. He also criticized the city for not allowing taxpayers to pay their tax bill monthly or bimonthly without paying interest on it. Plante said that taxpayers will have the option of paying their 2019 tax bill in six or 11 instalments instead of the current two, as they can for payments to the provincial government; however interest will be charged if payments are spread out over the year. During the election campaign, Plante had proposed to allow businesses to pay taxes in several instalments. While the city is holding the line on tax increases, spending will increase by 4.3 per cent. Part of the increase is because of an $86.2-million rise in payments to offset a deficit for the urban agglomeration in 2017 and part is because of an increase in cash payments for capital works, the city said. Without those two special expenditures, spending would only have increased by 1.2 per cent, it said. Forty per cent of the city’s $5.7-billion budget will be spent on paying its employees — a $2.3-billion cost. In 2018, employee compensation accounted for 42.6 per cent of the budget. The city said the savings were due to a $100.4-million reduction in pension plan costs and $22.7 million saved by its new performance-management program. It will spend $1 billion on public safety — $662 million on police and $336 million on firefighting. Debt service costs will rise by 32.2 million to $948.9 million. It will spend $441.6 million in cash payments for capital works — an increase of $80 million over 2018. Snow removal accounts for $166.4 million — a $3.1-million increase. The city will spend $45.9 million on building maintenance. Property taxes will account for 67.5 per cent of city revenues in 2019 — down from 68.4 per cent in 2018. The overall tax increase is made up of a one per cent increase in the water tax, a 0.5 per cent increase in the roadwork tax and a 0.35 per cent increase in the tax for regional transit, while the property tax as such is not increasing. For suburban municipalities, contributions to Montreal Island’s agglomeration council will go up by an average of two per cent. The increases in payments will be highest in Dorval Island (10 per cent), Town of Mount Royal (5.4 per cent) and Baie D’Urfé (5.1 per cent). They’ll be lowest in Ste-Anne-de-Bellevue (decreasing by 13.3 per cent), Kirkland (decreasing by 0.2 per cent) and Senneville (decreasing by 0.1 per cent). The Association of Suburban Municipalities, representing mayors of 15 independent cities and towns on the island of Montreal, praised the city for keeping a lid on suburbs’ contribution and for communicating its plans in a more timely fashion. “The adoption of the budget a month earlier than usual, in November rather than December, allowed us to obtain information in an orderly way, which is much appreciated,” said Beny Masella, president of the association and mayor of Montreal West. He expressed hope that discussion would continue to reduce disparities like what the suburbs regard as their disproportionate share of costs for shared services like Montreal police. The 2018 budget had sparked anger among suburban municipalities that were taken by surprise by the increase and forced to adjust their budgets by digging into their emergency funds and cutting spending.
It is the owners of the corner restaurant, the local café, book stores and the mom and pop stores that will get a tax break.