Montreal budget boosts road, water spending without deficit

The City of Montreal's 2009 budget will stimulate economic development without raising property taxes, Mayor Gérald Tremblay said.

The $4 billion budget, released Wednesday, includes increased infrastructure investment, with more than $600 million earmarked for road and water system upgrades.

The global financial crisis has had a direct impact on the city's budget, said Sammy Forcillo, executive committee member in charge of municipal finances.

But the budget is balanced, with overall spending going up by 2.6 per cent, he said.

The city's finances are in good shape, Tremblay said, adding that Moody's credit-rating agency in New York City recently granted Montreal its highest credit grade in its history (Aa2).

"Choices made by our administration in recent years have put Montreal in an advantageous position, not only to weather the turmoil, but also to prosper on a long-term basis," Tremblay said.

Property taxes won't go up for the time being, but the city will "consult our stakeholders and we'll see what consensus we can arrive at to diversify our sources of revenue," the mayor said.

Transit agency gets 7.1% increase

Montreal is planning to spend $351 million to improve the island's aging water system, $258 million on roadways and $146 million on other major development projects.

The city will contribute some $332 million to the city's public transit agency, an increase of 7.1 per cent compared to last year. The boost will allow the Montreal Transit Corporation to buy an additional 60 articulated buses.

But the city is still waiting to hear from the province about longer-term investment in its ambitious public transit plan, Tremblay said.

"Even if significant efforts have been made [on this issue] in recent years, it's still not enough to finance the $5.1 billion that will be needed in the next 10 years" to improve Montreal's public transit system, Tremblay said.

The city is spending $50 million to build 5,000 new low-cost housing units, and will continue efforts to renovate existing social housing dwellings.

Montreal is also forging ahead with its rental bike pilot project, dubbed BIXI, at the cost of $10 million. Some 300 stations with 3,000 bicycles will be available in the downtown core by springtime, Tremblay said.