Since 2020, cities must cede land to the Government of Quebec so that it can set up its schools there.
When this law was passed, several of us mayors believed that the decision had been made on the corner of the table and that no one in Quebec had assessed the consequences. We were right.
This anomaly (all Quebec government departments pay for their land) has very significant adverse effects. I will present a few examples to you, then I will come back to certain principles of sound management violated by this decision.
Otterburn Park
The City of Otterburn Park’s annual budget is $16 million. The new law obliges it to buy, probably by expropriation, to serve, then to yield a ground for a school. The City estimates that the whole operation will cost it at least 9 million. In exchange, the municipality will receive, perhaps, land worth 1 million. Otterburn Park finds itself paying almost 20% of the school project. This expense is equivalent to $204.06 per tax bill for 20 years! Does anyone in Quebec understand that this obligation to fund the Ministry of Education affects all of the City’s financial planning? Detail: it was by consulting a document intended for parents that the Town learned of the intention of the school service center to build a new school.
Saint-Lin–Laurentians
The total budget of the municipality is 27 million. It has just spent 7.6 million for the land of a single primary school. In the relatively short term, a secondary school and three new primary schools will have to be built. In total, these projects will require loans that could amount to 40 million, loans that will double the debt of the City, a debt accumulated in 175 years of history!
Saint-Jean-sur-Richelieu
The City will have to acquire and transfer school grounds for a value of 75 million. Financing the necessary loans will cost 4.4 million annually for 40 years. The school file alone represents a tax increase of 4% for taxpayers! To season all this with ridicule, the City will have to buy land from Hydro-Québec (the government of Quebec) to give it to the school service center (the government of Quebec).
And the others
Since 2020, 18% of cities have ceded land to the Quebec government; the average value of sold properties is 2.9 million1. Laval estimates the impact of this law on their budgets within a few years at 175 million, Brossard at 100 million and Montreal at 200 million.
This law considerably destabilizes municipal finances, but it also violates a number of principles of sound management.
One spends the other’s money
The school service centers determine the needs and the cities pay.
Service centers want the perfect land, in the perfect location, they refuse to build high up, etc. Easy, it’s not them who pay.
Any financial adviser will tell you that this is a recipe for bankruptcy.
Sacrifice parks
Especially in large cities, vacant land is scarce and the need for new schools is often expressed in neighborhoods that have already been built up. Land is therefore extremely expensive. What are cities doing? They sacrifice parks: these are “vacant” land, cheaper than all the others, located in areas that have already been built up. This is often the least bad decision. I insist on bad. There are currently a good dozen cases where cities are proposing to do so.
The right tax for the right service
The property tax is not designed to fund education. He is not paid by everyone. It is less progressive than income tax. It almost always turns into a rent increase. It is a particular burden for small businesses and for seniors. It is already insufficient to meet the needs of cities. Using it to fund education is a tax and social error.
No link between the problem and the solution
The government wants to “force” school service centers and municipalities to come to an agreement. This law does the opposite: school service centers have no incentive to seek accommodation. In addition, it transfers the burden of purchasing land to municipalities that have no more money than the school boards had. I repeat myself, but the solution is simple: Quebec should pay for its own schools (instead of making tax cuts).
There will obviously remain the real problem, that of joint planning between the service centers and the municipalities. Some must better define their needs, others must systematically and quickly plan locations for future schools. Instead, they clash over land. That’s what happens when you make decisions on the corner of the table.