City of Montreal promises to make efforts to keep tax hikes under inflation rate

The City of Montreal is set to table its budget next month and the Plante administration says it’s facing a major economic crunch.

In a press conference Thursday, Montreal mayor Valérie Plante was following up on an announcement the day before when the city said it’s making major cuts to its expenses, including a hiring freeze as they look to address a massive budget shortfall heading into 2024.

“We will be under the inflation rate, 5.2 per cent,” said Plante. “It is important for us. We’re making every effort. We need to do everything possible to keep expenses low. And we want to keep the raise of taxes under the inflation rate. That’s what we said we would do and that’s what we will be doing.”

A variety of reasons for shortfall

The city blames the shortfall in part – on a drastic drop in taxes levied on property transfers, caused by a slowdown in the real estate market.

Total – the city of Montreal made roughly 120 million less in revenue than expected this year.

Plante acknowledges that Montreal residents are also feeling the pinch. 

“We want to make sure Montrealers understand and know that we care about their wallets,” she said, “about how they’re dealing with inflation. We’re dealing with it as well, but we want to keep it as low as we can, though we have a lot of responsibilities and we need to put money aside.”

Inflation, staff shortages and supply chain issues, as well as unexpected weather events – like the April ice storm and the cleanup afterwards – played an additional role in contributing to the shortfall, the city says. 

Official Opposition at Montreal City Hall

“The Plante administration is being caught by its financial mismanagement. After increasing city spending by nearly $1.3 billion in five years, there’s a sense of panic in the face of inflation and falling construction starts,” said Alan DeSousa, Ensemble Montréal critic on financial matters and mayor of the Borough of Saint-Laurent, in a statement on Wednesday.

“This budget recovery plan looks very much like a public relations strategy to pass on a hefty bill to Montrealers. Last year, the administration imposed the largest tax increase since 2011. Ensemble Montréal is concerned that the same scenario may unfold this year. This recovery plan should have been presented a long time ago, and not just because the administration is in ‘crisis management’ mode.”