Believing that it is too dependent on the property tax, Montreal intends to diversify its sources of revenue and plans to adopt measures such as tourist fees or a modulation of tariffs based on the concept of user-payer.
“The property tax is no longer enough. We must go further. Montreal, like other cities in Quebec, has no choice but to find new sources of revenue,” said Mayor Valérie Plante.
As it announced when it tabled the 2022 budget last December, the administration will launch a reflection project on the financing of municipal activities so as to be ready when the time comes to negotiate a new fiscal pact with Quebec in 2024.
A first forum on Montréal taxation will take place in October and will bring together representatives of the city centre, the boroughs, related cities on the island of Montréal and members of the Communauté métropolitaine de Montréal (CMM). Then, in the spring of 2023, a summit on municipal taxation will be held and this time, the participants will come from diverse backgrounds, whether they are municipal partners or representatives of civil society.
To support it in its work, the city will also set up an expert committee on eco-taxation and the financing of major projects. The composition of this committee will be known by the end of June. “Montréal is in a context of budgetary balance which is still fragile,” maintained the president of the executive committee, Dominique Ollivier. In addition to municipal services such as snow removal, waste collection and maintenance of the public domain, the City of Montreal must also assume more and more responsibilities specific to its status as a metropolis, such as housing, community development and the fight against homelessness, underlined Mr.me Olivier.
A tourist fee?
Montréal therefore wishes to find new sources of revenue that will be stable and recurrent, so as not to unduly increase property taxes, which currently represent 63% of its revenue. The City plans to first review its current spending to see if it can save money. “But even if we find savings measures, it is limited in what it can generate”, admitted Mme Olivier.
For example, the elected official raised the possibility of Montreal following in the footsteps of the municipality of Percé, which has implemented a tourist fee. This controversial fee means that for each transaction over $20, a dollar is added to the bill. She also mentioned the planned zero-emission zone in the city center which could lead to a modulation of parking prices according to the size of vehicles. Montreal will therefore examine various measures based on the user-pay concept. “We want to identify what is being done all over the world and see what it can be used for and how it can help us achieve our objectives,” explained Dominique Ollivier.
Montreal hopes to raise an additional amount of approximately $300 million per year.
The opposition to the town hall believes that the administration took a long time, five years, before launching this project. Ensemble Montréal nevertheless intends to participate in this consultation. “We must collectively find a way to better fund infrastructure and services for citizens. Municipalities are faced with the dependence of property taxes. On the other hand, we must not do it to the detriment of the wallets of taxpayers who are caught by the throat with the increase in the cost of living, ”commented the leader of the opposition, Aref Salem, by email.