Montreal mayor calls on Quebec, Ottawa to help balance budget as city faces $500M shortfall

Lhati Nyima Lama  says he needs more help if his downtown Montreal business, Chez Gatsé Restaurant Tibétain, is going to survive.

"Sales have gone down drastically," he said, since Quebec ordered restaurants and other non-essential businesses closed in March. "I had to lay off my employees."

Covering overhead costs has been nearly impossible with takeout service only, and he doesn't expect it to get much better until tourists and commuters return downtown to stroll, work or study.

The federal rent subsidy isn't a fix-all for his business or many others like his unless it's extended past the month of June, the restaurateur said. He hopes the city will offer its own rent support, while postponing property tax payments yet again.

"That will be a big boost to the city's economy because of the restaurant's contribution," Lama said. "For me, rent subsidy is the most important."

These are the types of solutions Montreal Mayor Valérie Plante is exploring as she looks to rebuild the city's economic engine in the wake of a global pandemic that has hit her city particularly hard.

Help needed to make up for shortfalls, Plante says

Plante said Tuesday that her administration has done what it can to feed the hungry, postpone property tax payments and address the housing crisis.

Now she's calling on the provincial and federal governments to help cover a looming $500-million deficit as Montreal struggles to keep its public transit network afloat in a work-from-home era that's draining downtown of its daily influx of shoppers, diners and commuters.

Prime Minister Justin Trudeau said on Monday the $2.2 billion in annual infrastructure funding for communities will be delivered in one payment this month, but how much help Montreal will get depends on negotiations between Quebec and Ottawa, Plante said.

"Federal and provincial financial assistance will have to be there to make up for shortfalls," Plante said. "It is up to them to help us."

Report recommends running deficit

Municipalities are prohibited by law from running a deficit. Plante says relaxing that rule may be the only way for the city to avoid increasing taxes or cutting services while her administration strives to revive the economy without kickstarting a second coronavirus wave.

Asking Quebec to temporarily lift the ban on municipal deficits is the first recommendation made by a  committee of financial and urban planning experts assembled by Plante to help guide decision-making.

The committee, assembled in April, is led by Luc Godbout, a Université de Sherbrooke professor of taxation and public finance. Godbout was present when Plante released the committee's report, available in French on the city's website, Tuesday.

"The report confirms the importance of seizing the opportunity to accelerate the fight against climate change and reduce social inequalities," Plante said.

From tax rebates to online shopping

The committee's report recommends further postponing the due date for property taxes and offering tax rebates in neighbourhoods most affected by the crisis.

It suggests promoting online shopping at local businesses, so Montrealers can avoid foreign-based retailers like Amazon.

"We also have recommendations on the cultural industry," said Godbout. "It must have financial support to help major Montreal events become online events."

Plante is still reviewing her options and waiting for public health authorities to approve the reopening of key sectors of the economy, such as restaurants and tourist venues.

When asked for comment on Plante's economic recovery efforts, a spokesperson for opposition leader Lionel Perez said Ensemble Montréal will be making a few suggestions of its own soon.