Expecting to lose nearly $300M to pandemic, Montreal aims to cut costs without raising taxes

Montreal will freeze hiring and new purchases as the Plante administration prepares for hefty revenue losses in the pandemic's wake.

"The solution cannot rest solely on the back of Montreal taxpayers," said Mayor Valérie Plante Thursday as she announced her plan to reduce city spending to prevent "too large" a deficit.

"We will have to have the help of Quebec and Ottawa to get through this."

The city is still in the throes of the COVID-19 crisis, but Plante said it's time to look forward to Montreal's economic recovery. The goal, she said, is to minimize the impact on services to citizens.

However, even in the most optimistic scenario, the cost of the crisis "is going to be quite substantial," she admitted.

Coun. Benoit Dorais, chair of the city's executive committee, said revenue from welcome taxes, construction permits and parking fees is likely to drop significantly — resulting in a loss of between $104.8 million and $294.1 million.

Montreal's metropolitan regional transportation authority, the ARTM, could also lose up to $244 million, Dorais said.

This is just an initial evaluation, he said, and officials will be better able to predict what lies ahead once the provincewide confinement measures are lifted.

Buying necessary sanitary items and paying front-line workers overtime to combat the spread of COVID-19 has been costly, but the planned spending freeze will not affect spending on those essential services, he said.

Some city projects that are in the early stages of development will be halted or postponed, he said, although he did not give specific examples.

Dorais said the city aims to save $123.4 million this year. That will mean cutting $85.7 million from the city centre's budget, and asking boroughs to cut spending by 3.1 per cent.

• Montreal looks for 'winning conditions' to restart economy and keep everyone safe

"Over the next few weeks, each department in each borough will have to present a complete plan to explain how they will achieve these savings," he said.

In the meantime, the city will curb spending through measures such as cutting $9 million in contingency spending and not hiring any new staff.

"It is not our plan right now to lay anybody off in any massive way," he said.

"We are doing everything we can do to limit the impacts and come out stronger from this crisis."

Dorais said the Plante administration is determined to keep its promise not to increase taxes more than the rate of inflation.

"There is no question of digging into [taxpayers'] pockets to fill the hole for the current year nor reducing the services that are offered to them," he said.

City well prepared, says Plante 

Plante said the city had a $251-million surplus last year and has been prudent financially in recent years, which makes it better prepared for economic hardship.

The mayor has said in the past she wants the city to emerge from the pandemic "even stronger" than before, but she has acknowledged there is a difficult path ahead.

"The challenges in terms of public transit and the management of public spaces are the greatest," she said recently.

But the city is "well positioned" to face those challenges, she insisted during Thursday's news conference, although the recovery plan is still in its early stages.

"Let us keep in mind this is only a first step in order to ensure that Montreal's finances stay healthy despite the current crisis," she said.

As the Quebec government plans to gradually scale back confinement measures across the province, Plante has said the process may go a bit differently in Montreal, due to the dense urban environment.

"We really want to bring together the winning conditions so the deconfinement is safe."