New tax deal a win-win for Montreal, suburbs

The City of Montreal will soon have the power to levy additional municipal taxes under a new deal struck with the provincial government to reform the island's agglomeration council.

Under the deal, Montreal's role as the province's largest metropolis and economic engine will be recognized by law, and the island will be given fiscal means to generate larger tax income.

The city will have the power to tax some goods such as cars or swimming pools and parking property, but won't be allowed to impose a municipal sales tax or entertainment tax, said Municipal Affairs Minister Nathalie Normandeau.

The additional powers will give Montreal more leverage, but it doesn't mean citizens will be saddled with a bigger tax bill, said Mayor Gérald Tremblay.

"I can assure all citizens of Montreal that we have no intent of increasing the tax burden of citizens for the 2009 budget," he said at a city hall news conference Thursday.

The amendments are modelled after a City of Toronto.

Tremblay said he'll meet with stakeholders over the next few months to determine the best course of action.

"It gives us, like the City of Toronto, at least one year to have discussion with our partners and find the best way to generate additional revenues that will be dedicated to specific activities, that will accelerate the development of the metropolis," he said.

Montreal's Board of Trade is open to hearing what the city has in mind, said president Isabelle Hudon. The business community agrees Montreal needs additional sources of revenue, but they want guarantees.

"They're always open to discuss [and] they want the best return on investment," Hudon said. "They want to have a top-class city."

The deal amounts to a series of amendments to Bill 22, tabled last year by the Liberals in an attempt to end squabbling between Montreal and its demerged suburbs over shared services and taxation powers within the island's agglomeration council.

Montreal and demerged suburbs have been at odds since the latter communities demerged from the mega-city in 2006.

The new deal should help all elected officials on the island work together, and "turn the page on the debate over mergers and demergers," Tremblay said.

Demerged suburbs will regain some powers such as responsibility for arterial roads. They will also have a role in the island's new auditing committee and will be granted more resources for research.

The deal is a good start to resolving the longstanding merger-demerger debate, but some points still need discussion, said Westmount Mayor Karin Marks.

"Things for which we will pay, which are island-side facilities or island-wide activities — our citizens have to recognize that those are truly island wide," and not just services for Montreal, she said. 

The Quebec government also pledges to transfer an additional $34 million to Montreal a year, starting in 2009.

The amendments also transfer control of Montreal's downtown Ville-Marie borough to the mayor's office.

The amendments still have to be adopted at the national assembly and will need support from at least one opposition party.