The business world deplores the lack of effort made by the City of Montreal to reduce its expenses in these difficult times. Result: taxpayers suffer, both those in the residential and non-residential sectors.
“In a difficult economic context, the budget of the City of Montreal submitted [mercredi] is worrying, both for individuals and businesses. The decision to increase overall property taxes by 4.6% – and especially by 4.9% for the residential sector – will weigh very heavily on the finances of Montrealers. […] We search in vain in the tabled budget [mercredi] an exercise in reducing expenses on the part of the City,” said Michel Leblanc, president and CEO of the Chamber of Commerce of Metropolitan Montreal (CCMM), in a press release.
On the phone, Mr. Leblanc adds more. “Why did the City pay double bonuses to executives? Why is there no hiring freeze? Why are we seeing increases in staff numbers in 2024? “, he wonders out loud.
Vice-president of the executive committee, Benoit Dorais defended the budgetary choices at a press conference. “We did not want to reduce library opening hours,” he gave as an example.
PHOTO HUGO-SÉBASTIEN AUBERT, THE PRESS
Mayor Valérie Plante alongside the vice-president of the executive committee, Benoit Dorais
For her part, Mayor Valérie Plante defended her political decision to offer free public transportation to those aged 65 and over, an expense of 34.3 million. At the same time, revenues from property taxes relating to the financing of public transport increase from 11 to 50 million in one year.
As for the management of the debt which corresponds to 108% of the City’s revenues in 2024, Michel Leblanc sees the bottleneck coming. Debt is used to finance fixed assets.
PHOTO DAVID BOILY, LA PRESSE ARCHIVES
Michel Leblanc, President and CEO of the Chamber of Commerce of Metropolitan Montreal
When the economy was doing well, the municipal administration used its room for maneuver by increasing its debt. The margin no longer exists when the economy is on pause.
Michel Leblanc, President and CEO of the Chamber of Commerce of Metropolitan Montreal
“We see the impact: the City must turn to other governments to find money for infrastructure at the racetrack,” he added.
Tax burden
Another source of irritation for the business community is the pausing in 2024 of the strategy to reduce the non-residential tax burden. Even today, non-residential taxation weighs four times more than residential taxation, underlines François Vincent, vice-president for Quebec of the Canadian Federation of Independent Business (CFIB).
“Although the increase is slightly lower for businesses, the gap remains gigantic. Their wallet is not expandable and here, instead of lessening the shock, the Plante administration is amplifying the problem,” he said in a written statement. The owner of a $900,000 commercial building pays $24,000 in taxes at the municipal level, compared to $6,000 for the owner of a duplex.
Same story from the Association of Commercial Development Companies of Montreal (ASDCM), which brings together merchants on Montreal’s shopping streets such as Rue Sainte-Catherine.
“This increase in tax charges risks weakening the financial stability of local businesses, already tested by current economic challenges,” said Sébastien Ridoin, interim CEO of ASDCM, in a press release.
Civil servants paid 40% more than in the private sector
Hiring civil servants is not happening. The number of municipal employees has increased by 1,500 since 2020, to reach the equivalent of 25,000 people.
“The City would do better to review its spending in terms of remuneration; instead, we see a net increase of around 400 new positions, criticizes Gabriel Giguère, public policy analyst at the Montreal Economic Institute. When we look at the report from the Institute of Statistics of Quebec, we are around 40% higher than similar jobs in the private sector. The current administration would benefit from tackling this issue of very high overall compensation, rather than increasing the tax burden on Montrealers. »