The drop in the number of real estate transactions in the metropolis as well as the increase in costs related to services and labor are forcing the City of Montreal to tighten its belt and freeze hiring for the next two months.
The Plante administration submitted an update on the City’s financial situation on Wednesday. Thus, as of August 31, 2023, forecasts suggest that the City will end the year with a surplus of 40.8 million. According to the City’s Director General, Serge Lamontagne, this amount is insufficient and the City will have to reduce its expenses by the end of the year.
The transfer taxes, also known as the “welcome tax”, lower than expected, leave a hole of 40 million in the City’s finances. Added to this are the revenues from tickets given by the Service de police de la Ville de Montréal (SPVM) which show a negative difference of 35.1 million, and the revenue from paid parking down by 14.1 million compared to the forecasts. Finally, extreme weather events, such as icy conditions, extreme heat and spring floods required unforeseen expenses of 15 million.
Positions left vacant
Less than a month before the submission of the City’s 2024 budget, the Plante-Ollivier administration has therefore decided to tighten its spending to give itself room to maneuver for the year 2024.
Currently, the City has 400 vacant positions and these will not be filled by the end of the year. These are positions that are not directly linked to operations such as security or water treatment, said Mr. Lamontagne. “It has no impact on the operations of citizen services as such. The districts are not bound by this operation. » This reduction in hiring will allow the City to free up an amount of 15.1 million.
The administration also asked its services to pause expenses that had not yet been incurred. “For example, if we needed a study or an advertising campaign and the contracts had not yet been given, we asked people to postpone what they were going to do so that we could go and capture half,” explained the president of the executive committee, Dominique Ollivier. This exercise should allow the City to reduce its expenses by 81.6 million.
Opposition elected officials see the presentation of the administration’s financial update as “a public relations strategy to pass on a hefty bill to Montrealers.” “The Plante administration is being caught out by its poor financial management. After increasing the City of Montreal’s spending by nearly $1.3 billion in five years, we sense panic in the face of inflation and the drop in construction starts,” the mayor of Saint-Pierre commented by email. -Laurent, Alan DeSousa.
The Plante-Ollivier administration will table the City’s 2024 budget on November 15. Last Friday, Dominique Ollivier assured that tax increases would be below 5.2%.
Further details will follow.