Montreal’s 2024 spending plan “will create more pressure for individuals and property owners in a universe where inflation is the norm and the capacity to pay is not going up,” said Michel Leblanc, head of the Chamber of Commerce of Metropolitan Montreal.
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Montrealers will pay a painful price for city spending that has spun out of control, critics said in reaction to the record $6.99-billion budget unveiled Wednesday by Mayor Valérie Plante.
Residential property taxes in Montreal will jump by an average of 4.9 per cent next year, while building owners face an average tax hike of 4.6 per cent, the city said Wednesday. The overall tax increase for residences is the highest since 2010’s 5.3 per cent climb, when Gérald Tremblay was mayor.
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“It’s preoccupying,” Michel Leblanc, head of the Chamber of Commerce of Metropolitan Montreal, said in an interview.
Montreal’s 2024 spending plan “will create more pressure for individuals and property owners in a universe where inflation is the norm and the capacity to pay is not going up,” he said. “Who are the individuals who got 4.9 per cent salary increases this year? Where are the companies that increased their profits by 4.6 per cent? There are very few of them. Everybody is cutting. Everybody is focusing their efforts on finding savings, but we don’t see a similar effort by the city. This is what we’re going to ask the city to do.”
The additional levies “have come at a very bad time for small business owners in Montreal,” added François Vincent, vice-president of Quebec operations at the Canadian Federation of Independent Business. “Their wallets are not stretchable.”
To be sure, the increases announced Wednesday represent less than the 5.2 per cent inflation rate that was observed in Montreal during the 12-month period that ended in August, budget documents show. Inflation for all of Quebec during the period was 4.6 per cent.
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Former executive committee chairperson Dominique Ollivier — who resigned Monday following reports that she had incurred lavish spending in a previous job several years ago — had promised last month that property tax bills would be held under the rate of inflation.
At 4.8 per cent in September, Quebec’s inflation rate was the highest in Canada, tied with Nova Scotia. The national average was 3.8 per cent.
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Inflation in Quebec is projected to drop to 2.7 per cent next year from an estimated 4.6 per cent in 2023, finance minister Eric Girard said last week as he delivered his mid-year economic update.
“It’s tough for Montrealers,” Plante told reporters Wednesday. “Inflation is ravaging the pocketbook of Montrealers, and we understand this. Everything costs more.”
Taxation is projected to bring in $4.18 billion, or almost 64 per cent of Montreal’s expected 2024 revenue. That’s up from a projected 63 per cent slice a year ago.
Eighty-seven per cent of the 2024 increase in residential property taxes is linked to decisions made by city hall, while the rest stems from decisions made by the boroughs. For non-residential property taxes, city hall’s share of the adjustment is 97 per cent.
Overall increases by borough for residential properties range from 2.6 per cent in Ville-Marie to 6.3 per cent in Anjou and 7.2 per cent in Pierrefonds-Roxboro.
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The 4.9 per cent average increase in residential property taxes translates into an additional cost of $227 a year for homeowners, budget documents show. The annual tax bill for the average Montreal residence — which is valued at $694,541 — will climb to $4,892 from $4,665.
For a single-family home, the average jump in residential taxes for all of Montreal amounts to 3.6 per cent, or $161 a year. That compares with average increases of 3.7 per cent, or $113, for condos and 5.1 per cent, or $254, for plexes, which are defined as properties with two to five dwellings.
The average value of a single-family home in Montreal is $651,406, the city says. This compares with $446,427 for a condo and $742,605 for a plex.
Even tenants will feel the effects of the budget.
“I don’t see a lot of good news for families and underprivileged individuals,” Johanne Le Blanc, a budget adviser at the non-profit consumer organization Option Consommateurs in Montreal, said in an interview. “We know that eventually, these property-tax increases are going to translate into rent increases, which will put more pressure on the most vulnerable people. It’s already very difficult for families and low-income individuals to keep their heads above water financially. As for homeowners and people in the middle class, maybe some will start asking if they can afford to keep owning a home. Can they keep the same spending habits?”
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Non-residential property owners are also facing bigger tax bills. The average 4.6 per cent hike for 2024 compares with increases of 2.9 per cent a year ago and 1.9 per cent in 2020.
The tax increase “risks undermining the financial stability of local businesses, which are already being tested by current economic challenges,” said Sébastien Ridoin, interim head of the the Association des sociétés de développement commercial de Montréal merchants group.
“Businesses on our commercial arteries are crucial players in the vitality of our city, creating jobs and providing a diversity dearly appreciated by residents. It’s imperative to support them more than ever.”
The sting of higher levies will be felt most acutely in Lachine, where non-residential property owners will see their taxes soar 14.3 per cent. Other significant increases include St-Laurent’s 12.1 per cent and Anjou’s 9.8 per cent.
Ville-Marie is the only borough that plans to cut non-residential property taxes next year, by 0.9 per cent.
City hall is maintaining its differentiated tax rate for non-residential properties, which ensures that buildings valued at less than $900,000 pay a lower rate. Owners of more than 90 per cent of non-residential properties benefit from the measure.
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Montreal introduced the differentiated rate for non-residential buildings in time for the 2019 fiscal year, shifting a bigger share of the burden to more valuable properties.
For 70 per cent of non-residential properties, those with a value of $900,000 or less, the differentiated tax rate has the cumulative effect of reducing the total tax burden of property owners by 16 per cent, Montreal says.
Parking-lot owners will see their property taxes indexed by about three per cent next year, Montreal also said. The increase applies to areas such as the city’s central business district.
Tax rates on parking lots vary depending on whether the property is indoor or outdoor. They also vary depending on the location of the parking lot.
For the first time in 2024, non-residential property owners will also be asked to pay a water tax based on consumption. Montreal sees volumetric pricing as an “eco-fiscal” measure to finance water services.
The rate, which applies to non-residential buildings equipped with a water meter, increases according to the building’s consumption — for a top rate of 60 cents per cubic metre if annual water usage exceeds 100,000 cubic metres.
Properties that consume less than 1,000 cubic metres of water a year pay no water tax. Property owners were sent a mock bill this year informing them of their consumption.
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