Montrealers' tax bill increase 'definitely' won't be above inflation, city says

With the real estate market soaring throughout much of this pandemic and homeowners in Montreal worried about the size of next year's municipal tax bill, the city says it's not sure how big the increase will be — but promises it will not be above the rate of inflation.

The inflation rate currently stands at seven per cent. The City of Montreal will release next year's budget in December.

"It's definitely going to be under the rate of inflation," said Dominique Ollivier, president of Montreal's executive committee, when talking about the expected municipal tax hike.

Ollivier said the city wants to take into account inflation, including the the increasing cost of groceries, and rising interest rates.

The city doesn't want to burden the taxpayer, Ollivier says, but has to make sure its budget accounts for municipal services which she says have been "hit as badly as the citizens." 

"We're trying to find that point of equilibrium, that balance point, to be able to make sure that the Montrealers are preserved in their capacity to pay … while looking at the different needs of the city," she said. 

Boroughs feel forced to hike own taxes

Adding to homeowners' concerns, the majority of the city's boroughs have already released their own budget and they include hefty borough tax increases.

Those increases are to compensate for what boroughs said are insufficient transfers from the city centre, which have been capped at two per cent for 2023. Twelve out of 19 boroughs say they had no choice but to increase the borough tax for next year. The average increase among them is nine per cent.

Montreal's boroughs are financed mainly from two sources: the municipal and borough taxes imposed on residents. The money goes toward increasing the level of local services and projects in the capital works programs. 

Highest among those budgets already tabled is Mercier–Hochelaga-Maisonneuve, which raised its borough tax by 14 per cent. Côte-des-Neiges–Notre-Dame-de-Grâce increased its own by 12 per cent and Plateau-Mont-Royal by six per cent.

The increases are significant, but borough taxes only make up about 10 per cent of the overall tax bill. Property taxes account for about 70 per cent.

Next month, the city will hold a public forum to hear from stakeholders about taxation and diversifying income, because Ollivier says placing the burden on citizens and their property taxes isn't sustainable.