(Quebec) A few months ago, the Legault government gave municipalities the power to impose a tax on vehicle registration to finance their public transportation network, which is struggling with significant deficits. However, it will charge “prohibitive” costs to those who take this path, the cities deplore.
“A very large percentage of the revenue generated by a possible tax will be paid in administrative costs, which reduces the real potential of this tool which must be able to be used everywhere in Quebec,” denounced the Union of Municipalities of Quebec in a brief presented Tuesday at the National Assembly.
“Municipalities wishing to take advantage of this power must enter into collection agreements with the Société d’assurance automobile du Québec (SAAQ). However, the administrative costs imposed by the SAAQ are prohibitive,” explains the UMQ.
These costs are even heavier for “environments serving fewer populations, and which are forced to amortize these administrative costs over a smaller number of contributors”.
2% of income
“The implementation costs for MRCs and cities wanting to implement a tax on registration in 2025 are $202,202,” deplores the grouping of cities which “represent more than 85% of the population and territory of the Quebec.”
Once the tax is in effect, the SAAQ then wants to levy “an annual management fee of 2% of the taxes collected, with a minimum amount of $60,000,” she adds.
However, it is explained in the document, the SAAQ “is already able to apply this type of tax on part of Quebec territory” since since 1er January 2024, a tax of $59 is levied on vehicle registration in the territory of the metropolitan community of Montreal and the City of Saint-Jérôme. “In this context, such high administrative costs are difficult to justify,” denounces the UMQ.
15% of income for a small MRC
The Quebec Federation of Municipalities, which counts among its members smaller localities and MRCs, is fighting the same fight. Its president, the mayor of Sainte-Catherine-de-Hatley Jacques Demers, wrote a letter to the Minister of Transport and Sustainable Mobility Geneviève Guilbault.
“For example, a medium-sized MRC with 20,000 vehicles on its territory which wishes to impose a [taxe] of $20 will have to pay $60,000 in annual management fees. However, these 60,000 dollars will represent 15% of the total sums collected annually from its territory,” he laments in this document obtained by La Presse.
“With half of the MRCs having fewer than 30,000 registered vehicles, you will agree with me that these fees only favor large cities and that they once again risk dissuading regions from taking advantage of this possibility. Also, it would be relevant to review all the fees required from local communities,” he adds.
The Legault government adopted Law 39 in December, which gave cities the power to impose the registration of vehicles based on their gasoline consumption.
“Quest in Quebec”
Immediately after giving this power to cities, Prime Minister François Legault, however, warned mayors. “Whether the taxes come from municipalities, the Quebec government or the federal government, Quebecers are already overtaxed. What I want is [que les villes] reduce their expenses,” he said.
His government is in negotiations with the cities to find out who should fill the operating deficit of more than half a billion public transport services in Quebec.
Last week, he called mayors beggars. “I think we are doing our part, the cities must also do their part. On the other hand, I understand that the mayors would like to have more money from the Quebec government. But, I’m not falling behind here, I’ve been in politics long enough to know, mayors, it’s always easier to beg in Quebec than […] to clean up their expenses,” he said at the time.