Montreal aims to ease pandemic pain with tax freeze

Opposition says plan doesn't go far enough while business federation says it will save entrepreneurs thousands

Montreal Mayor Valérie Plante's plan to freeze residential and commercial property taxes in 2021 is garnering mixed reviews.

Plante said Thursday that not raising taxes will relieve pressure on residents and business owners alike.

The mayor said on Twitter her plan will "help Montrealers get through this crisis, while ensuring sound financial management."

Property taxes increased 3.3 per cent in 2018, 1.7 percent in 2019 and 2.1 per cent in 2020. However, it's only the centre city's portion of the tax bill that'll be frozen. 

The boroughs control 20 per cent of the bill and it will be up to each council to decide if taxes will rise.

The Canadian Federation of Independent Businesses praised the move, saying it represents hundreds of thousands of dollars in savings for small- to medium-sized businesses.

 "They urgently need it. That's what 62 per cent of the business owners we surveyed told us," said Gopinath Jeyabalaratnam, a senior policy analyst for the CFIB.

Province helps businesses as Montreal faces deficit

No matter what boroughs decide, Plante said the city is still looking for ways to help people in the restaurant, bar and entertainment industry recover. 

Quebec officials announced Thursday that $100 million in financial aid will be made available to the estimated 12,000 businesses that are shutting down this month because of new COVID-19 restrictions.

Meanwhile, the city's finances are foundering. 

Plante said the predicted deficit will be between $109 and $129 million, but it could have been far worse if the city hadn't cut spending by $123 million and frozen employee salaries back in April. 

So far the pandemic has cost Montreal about $85 million, said Benoit Dorais, executive committee chair.

That cost is partly due to all the lost parking and ticket revenue as well as the sudden drop in construction permit applications.

Dorais says the city is working on a few solutions, such as further spending cuts or dipping into previous surpluses.

"There is no question of us simply putting the entire shortfall on a credit card," Dorais said.

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Quebec is kicking in $2.3 billion for all municipalities, nearly half of which will be used to bail out public transport organizations. That funding will certainly help, said Dorais.

Opposition says more help needed

While public money is being shuffled around by the millions to make up for pandemic-spurred losses, Ensemble Montréal says owners of non-residential buildings should receive a tax break — not just a freeze.

For three years, Projet Montréal has increased the city's spending by 17.6 percent and taxes by 7.1 per cent, the opposition party posted to Twitter on Thursday. 

"After spending lavishly, the city is now running out of money to help Montrealers affected by COVID-19," says the tweet.

Opposition leader Lionel Perez says Plante is pitching a pre-electoral budget in an effort to see headlines with the words "tax freeze."

"But they didn't bother to explain Montrealers where the money will come from. I'm genuinely concerned for future generations if they keep borrowing and if borrowing is part of their plan for the pandemic," he said. 

It's time to be responsible, he said, rather than "promising the world and expecting Montrealers to pay for it long-term with additional interest."

CFIB says freeze will help

Businesses forced to close for the month of October need all the help they can get — especially after spending six months with few customers and having additional costs to meet public health restrictions, said Jeyabalaratnam.

 He said it was predicted that COVID-19 cases would surge once again and Montreal did consult with the CFIB to better understand how it could help small- to medium-sized businesses when the time came.

The organization recommended giving a financial boost to businesses, and the mayor went with the tax freeze.

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"Now we expect her to act on the issue of time by reducing the administrative burden and red tape," he said. 

"The City of Montreal can take a step by introducing a moratorium on the adoption of new by-laws, speeding up the issuance of permits, improving its online services and adopting a framework policy on regulatory relief that could apply to all boroughs."