Budget 2023: Montreal residents face biggest tax increase since 2011

Facing the highest increase in the inflation rate in 40 years, the Plante administration tabled a $6.76-billion budget that limits spending and taxation below the overall rise of the cost of living.

Montreal Mayor Valérie Plante unveiled her budget for 2023 on Tuesday, and it includes an average 4.1 per cent increase in residential property taxes, the highest increase since 2011, along with a 4.7 per cent increase in spending over the 2022 budget. Plante said she’s proud to have been able to limit the increases to the inflation rate, which was pegged at 6.9 per cent in October, but is expected to ease over the course of the next 12 months.

Non-residential property taxes will rise by 2.9 per cent.

“The city is doing the right thing,” Plante said. “Of course, we’re spending a lot of money on infrastructure, because here in Montreal we have old pipes and things we need to take care of, and there has not been enough investment in the past.”

An average single-family home in the city is now valued at $592,167, and the average tax bill will rise to $4,390 next year, compared with $4,180 in 2022.

Depending on where you are on the island, your tax bill will be different. Tax bills will also change within boroughs and cities. A new property tax evaluation roll will be implemented over the course of three years, so if your home value increases more than the average value, you’ll pay more, while those whose home values did not increase as much will get a tax break.

Homeowners in Île-Bizard—Ste-Geneviève will have the greatest hike with a six per cent increase in their 2023 property taxes. Mercier—Hochelaga-Maisonneuve residents will be dinged for 5.7 per cent, while both Côte-des-Neiges—Notre-Dame-de-Grâce and Pierrefonds-Roxboro residents will see 5.4 per cent hikes. Ville-Marie residents will see the lowest increase — at only 1.7 per cent.

The 15 demerged suburbs on the island won’t be spared an increase. Their average contributions to the agglomeration of Montreal will rise by 3.6 per cent next year.

The city will also increase its revenue by charging $15 million for water usage to non-residential properties; $5 million will come from taxing parking lots, while the city is receiving $45 million more in financial aid from the province. The city also expects to see a $40 million increase in revenue next year due to increases in the real estate market. The increased tax revenue from parking lots — previously reserved just for the downtown core — will be achieved by rolling out the levy citywide on lots of more than 20,000 square metres.

Among the principal reasons for the increase in costs is an extra $107 million the city plans to pay in 2023 in cash payments on its capital works projects. Because of the steep rise in interest rates, the city estimates it will save heavily on interest charges if it pays more in cash over the next 10 years. In its $22-billion capital expenditure plan, the city intends to pay roughly $10 billion in cash over the next decade.

Public Security will get a $100.4-million boost next year, with more that two thirds of that money coming from the province. Quebec has pledged $225 million over five years to help the city manage gun violence. Among the measures to be taken are the hiring of 270 additional police officers — an election pledge by the Plante administration. The SPVM’s budget will be $787.1 million, an increase of $62.3 million from 2022. The city will contribute $25 million over that time, including $18 million in 2023. The Équipe mobile de médiation en intervention sociale — non-police intervention workers charged with mediating tensions between homeowners, business owners and those who are living on the margins — will get a $10-million boost this year, split equally between the city and province — after operating with a $1 million annual budget up to now.

Speaking about the increase in policing, executive committee chairperson Dominique Ollivier said while police are getting a boost, the city is also working to support intervention workers and community groups. A record $30.2 million will also be invested in social, affordable and adapted housing.

“We have to make sure our police force can address the issue of gun violence,” she said. “But for our administration, what is very important is that children and adolescents are being offered different alternatives to joining street gangs, for example. It’s very transversal, so you will find different measures to make sure that we bring down street violence.”

Other areas where spending is on the rise is for public transit, which is getting a $20-million boost so senior citizens can ride free. Inflation is expected to cost the city $10 million next year, while the debt service will be $87.5 million higher in 2023, reaching $958 million.

The city expects to be able to bring its debt-to-revenue ratio back down to 100 per cent by the year 2027 from its peak last year at 114 per cent.

Reacting to the budget, opposition councillor Alan DeSousa, the Ensemble Montréal spokesperson on finance matters, said the city should have given Montrealers a break. He pointed to the 2022 provincial budget, which gave back $100 to Quebecers to combat inflation, and the budget of the city of Quebec, which limited tax increases to just 2.5 per cent.

DeSousa said the city is hiring too much, has allowed cost overruns to run rampant on major projects, and must cut its costs, as most families are doing in this financial context.

“When you’re in a hole, you have to stop digging,” DeSousa said. “There is definitely room where they can improve in better managing capital expenses and projects, reducing hiring and living within their means.”

The budget was greeted by applause from the city’s chamber of commerce, as the increase for non-residential taxpayers is within the three per cent that had been hoped for, and that the increase in residential property taxes is lower than the inflation rate.

jmagder@postmedia.com

twitter.com/jasonmagder

1. Montreal's 2023 budget: City's debt and long-term investment are rising

2. Montreal's 2023 budget: Residential property taxes to rise average 4.1%