Montreal “turned over every rock” to find ways of limiting tax increases, Mayor Valérie Plante insisted.
Homeowners will bear the brunt of the 2023 tax increases announced Tuesday by the administration of Montreal Mayor Valérie Plante in a $6.76-billion budget that introduces new levies for parking-lot owners and large water-consuming businesses.
Residential property taxes in Montreal will climb by an average of 4.1 per cent next year, outstripping the average 2.9 per cent tax hike targeting non-residential buildings, budget documents show.
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The overall increase for residences is the highest since 2011, when Gérald Tremblay was mayor. It reflects 3.4 per cent linked to decisions taken by city hall and 0.7 per cent by the boroughs.
Figures released by the city in September showed a 32.4 per cent surge in property valuations for the three-year period that ended in July. Montreal said last month it would phase in that value increase over three years to soften the blow for individual taxpayers already dealing with red-hot inflation. Consumer prices across the country rose by an average of 6.9 per cent year-over-year in October, Statistics Canada said this month.
With inflation hovering near multi-decade highs, “we know taxpayers are under pressure,” Plante said at a press conference Tuesday. “Inflation is creating a lot of insecurity, both for the general population and for business owners. Everything costs more, and we wanted to protect the wallets of Montrealers as much as possible.”
Montreal “turned over every rock” to find ways of limiting tax increases, Plante insisted.
For a single-family home, the average jump in residential taxes for all of Montreal amounts to five per cent. That compares with average increases of 2.7 per cent for condos and 4.5 per cent for plexes of two to five dwellings.
Taxation will generate 63 per cent of Montreal’s revenue next year.
Opposition politicians were quick to slam the budget as inadequate and wasteful, saying the city should have put in place a hiring freeze to prepare for the recession that many economists now say is inevitable.
“This is the wrong budget for 2023,” Alan DeSousa, finance critic of the official opposition at city hall, told reporters. “When the Quebec government is putting money in the pockets of its citizens, this budget is taking money out of their pockets.”
Montreal West Mayor Beny Masella, who heads the Association of Suburban Municipalities, also had harsh words for the fiscal plan, which he said perpetuates an inequitable system. His group includes the mayors of the 15 suburban cities on the island of Montreal.
“With every passing budget, the disrespect that the demerged municipalities are being shown by Montreal, and the refusal of the city to change the system of how we share the costs, just grows larger,” he said. “Montreal keeps talking about sitting down to negotiate, but they are refusing to roll up their sleeves and find a long-term solution. They’re abusing us. They’re treating us like cash cows.”
The tax hikes announced Tuesday “are going to cause a lot of anxiety for homeowners and families,” added Nicolas Gagnon, Quebec director of the Canadian Taxpayers Federation.
With government data showing about 45,000 people left Montreal in 2020-21, “this tax increase certainly isn’t going to help bring people back. It could even accelerate the exodus.”
Homeowners in Île-Bizard—Ste-Geneviève will be the hardest hit: they face a six per cent jump in their 2023 property tax bill. Other notable increases include 5.7 per cent for Mercier—Hochelaga-Maisonneuve, 5.4 per cent for Côte-des-Neiges—Notre-Dame-de-Grâce and Pierrefonds-Roxboro, five per cent for Anjou and 4.9 per cent for Lachine.
Downtown residents will be somewhat spared — they can expect an average increase of 1.7 per cent next year. Ville-Marie is the only Montreal borough whose 2023 property tax increase will come in at less than two per cent.
An average single-family home in Montreal is valued at $592,167, with a 2022 property tax bill of $4,180. On that basis, taxes on a single-family home will rise to an average of $4,390 next year, the city says. Depending on the borough of residence, actual tax adjustments may be larger.
Property taxes alone represent about two-thirds of the 4.1 per cent average increase for homeowners, budget documents show. Water taxes, service taxes, indebtedness taxes and investment taxes make up the rest.
On the non-residential side, two boroughs are facing double-digit tax hikes. Non-residential taxes will jump 15.2 per cent in Lachine and 11.2 per cent in St-Laurent. They will climb 8.6 per cent in Anjou, 8.2 per cent in St-Léonard and 7.3 per cent in Rivière-des-Prairies—Pointe-aux-Trembles.
By contrast, non-residential taxes in Ville-Marie will drop 2.7 per cent.
Montreal’s city council is maintaining the differentiated rate for non-residential buildings. The measure, which Montreal introduced in time for the 2019 fiscal year, shifts a bigger share of the burden to properties valued at more than $900,000.
About 70 per cent of non-residential properties in Montreal are valued at $900,000 or less. On average, their owners will see their property tax burden fall by about 16 per cent in 2023, the city says.
Two new levies will be applied to non-residential properties.
An existing tax on large outdoor parking lots — currently in force in the downtown core — will be rolled out across all boroughs, generating an estimated $5 million in revenue that will be used to partially finance public transit. The tax will apply to all parking lots of more than 20,000 square metres. It’s designed to encourage “optimal” land use, the city says.
A new volume tax on water use will be introduced for non-residential properties starting in 2023. The measure will affect industries, large retailers and institutions, generating about $15 million annually, said Dominique Ollivier, chairperson of the executive committee.
Property owners will receive a “blank bill” next year to show how much water they used in 2022 and to underline the importance of optimizing consumption. A first actual bill will be issued in 2024 for water consumed next year.
Reaction to the budget in the business community was mixed.
“Under the circumstances, it’s a good budget,” said Michel Leblanc, head of the Chamber of Commerce of Metropolitan Montreal. “The city understood that many companies are in a fragile state because all of their costs are increasing.”
Introducing so-called “eco-taxes” such as the water and parking-lot levies is “the right thing to do,” though the latter measure could put Montreal’s shopping centres at a disadvantage compared with suburban malls, Leblanc said.
“We agree with the principle, but would have preferred that a similar approach be deployed across the entire metropolitan area,” he said.
While entrepreneurs welcome the city’s efforts to limit tax increases to less than three per cent, “there’s never been a worse time to raise our operating costs,” said François Vincent, Quebec head of the Canadian Federation of Independent Business. “Small businesses are getting hammered by inflation from every direction.”
Montreal’s water consumption tax looms particularly large, especially for restaurants, Vincent added.
“It’s a worry,” he said. “It creates uncertainty. It’s not what we need.”
ftomesco@postmedia.com
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