Cities in the greater Montreal area are worried about the pressure the Réseau express métropolitain (REM) could put on their finances, while the future of the AccèsLogis program as well as inflation raise concerns across the province .
The duty reviewed the briefs submitted by many organizations and cities in the run-up to the Legault government’s 2022-2023 budget, which will be presented on March 22 in the context of an election year and a dragging pandemic.
Unsurprisingly, the financing of public transit, whose fare revenues have been hit hard by the health crisis, is at the heart of the concerns of several cities. In the metropolitan area, however, the gradual arrival of the REM starting this year adds an additional layer of concern for the municipalities that will be served by this light rail, which will notably connect the South Shore (Montreal region) to downtown and will have an antenna in the direction of the Montréal-Trudeau airport and in the west of the metropolis.
The REM funding agreement provides for a financial contribution from the Autorité régionale de transport métropolitain (ARTM) to promoter CDPQ Infra, which will be calculated based on a rate of $0.72 per passenger-kilometre. The municipalities of the Montreal region should for their part contribute up to $30 million per year in addition to absorbing 15% “of the additional cost” of operating light rail. Quebec will assume the rest of this invoice.
“This amount is in fact unknown because it depends on the ridership” of the future electric train, explains Stéphane Pineault, executive coordinator at the Montreal Metropolitan Community (CMM). However, it could inflate the REM’s annual operating bill for municipalities in the greater Montreal area to more than $70 million, he said.
The CMM also fears that the pandemic will have the effect of increasing the financial burden of the municipalities concerned by reducing the frequency of the REM, in the event that CDPQ Infra refuses to compensate for the losses suffered.
“Given the risks related to the profitability of the service, it is necessary for the government to ensure that municipal contributions are not higher than those originally planned,” writes the CMM in its brief. Thus, the “next” entry into service of the first phase of this vast light rail project, which will eventually be extended to the east of the island of Montreal, “adds to the urgency of improving the metropolitan financial framework “, indicates the organization, which brings together the 82 municipalities of the greater Montreal region.
” We do not have a choice. We have a problem in front of us and we will have to find a way to finance public transit, ”also underlines in an interview the director general of Trajectoire Québec, Sarah V. Doyon. In her brief, she pleads for the implementation of eco-fiscal measures – such as road tolls – in addition to a short-term increase in the financial assistance granted to public transport companies in the context of the pandemic. The organization also fears that the financing of the REM will harm that of the transport companies in the region, due to a lack of available funds.
“The REM will have financial impacts,” confirms Pierre Barrieau, transportation planning expert and lecturer at the University of Montreal. In the long term, however, this transit project could increase the incomes of the cities it will pass through by increasing their density, and therefore their land revenues, he adds. “We mustn’t forget that,” says the expert.
We do not have a choice. We have a problem before us and we will have to find a way to fund public transit.
In need of social housing
Demands are also great across the province in terms of social housing, at a time when several municipalities are concerned about the future reserved by the Government of Quebec for the AccèsLogis program, which has funded this type of housing since 1997.
“For us, the AccèsLogis Montréal program is a program in which we believe, which is important,” explains the Homework the president of the executive committee of the City of Montreal, Dominique Ollivier. However, she deplores an “under-investment” in this program over the past three years. The City also underlines in red lines in its brief the absence of amounts provided for in AccèsLogis Montréal in 2019-2020 and 2020-2021.
The municipal administration is thus asking for $265 million to build the 2,000 AccèsLogis housing units promised in recent years for Montreal by 2025, but which have still not been delivered. “The request is absolutely realistic”, underlines Mme Olivier.
The CMM, for its part, is calling for the development of 3,000 social housing units and 9,000 affordable housing units per year in the greater Montreal area, until 2031. “That gives the extent of the needs in Greater Montreal,” says Stéphane Pineault.
The need for housing accessible to low-income people is also felt outside the metropolitan area. The City of Quebec pleads in particular for the construction of a “variety of social housing” along the route of its future tramway. By asking the Legault government to invest in the development of 250 social housing units and as many affordable housing units per year, over a period of five years on its territory, the administration of Mayor Bruno Marchand hopes to meet the needs “of many households looking for housing that matches their financial capacity,” says his memoir.
The impacts of inflation
Galloping inflation in the country could also have repercussions on the portfolio of several municipalities, which are challenging the Legault government on this subject.
“Inflation above 2% over a long period could have significant impacts since 86% of our operating expenses are linked to inflation, i.e. employee compensation, the cost of construction contracts and services as well as goods . The increase in land value envisaged alone will not be enough to offset the increase in expenses,” explains the City of Rouyn-Noranda, among others, in anticipation of the next budget of the Legault government.
“All of this takes place in a context where the majority of our income depends on land”, mentions Dominique Ollivier. However, municipalities must also take into consideration the impact of inflation on residents’ financial leeway, which is thereby limited. It then becomes difficult for a city to bet on the property tax to compensate for its financial losses.
“We will have to find a balance,” concludes the elected representative of Projet Montréal, who pleads for a diversification of the revenues of the municipalities of the province.