Proposed Montreal tax hike contested

Montreal’s budget won’t be tabled until Wednesday, but already demerged cities and business groups on the island say they are planning to fight proposed tax increases.

Early reports suggest property taxes could go up between six and 16 per cent in some areas on the island.

Montreal faces an approximate $150 million budget shortfall this year and residents have to accept the bitter medicine, said executive committee member Alan DeSousa on Monday.

"We've seen the effects of the recession hit Montreal and its economy, mind you, not as hard as it's been across North America, but we've seen our revenues drop significantly," said DeSousa, who is responsible for finance and administration for the city of Montreal.

"Some people suggest that the recession might be over [but] we don't see any signs of it as of yet. There are still companies cutting back, there are still jobs being lost."

The rising cost of mass transit makes up a significant portion of Montreal's budget.

"In a perverse way, our success [with public transit] is one of the reasons why we have increased expenses," DeSouza explained. "The residents of the island of Montreal are the ones who bear the cost."

Westmount Mayor and spokesman for the 15 demerged cities, Peter Trent, acknowledges the region has been hit hard by the recession.

But the Tremblay administration must learn to live within its means, rather than dipping into taxpayers' pockets, said Trent.

"Over the past three years, spending has increased at a rate three times higher than the rate of inflation," Trent said.

Local business owners agree, said Michel Despatie, vice-president of the Association of Montreal Business Development Centres.

Eight per cent of business space in the city is already vacant, Despatie said.

"We cannot pass the [higher tax] bill on to consumers," Despatie said. "It is out of the question in the context of competition with the big box stores and ‘power centres’ that are opening.

"Prices won’t go up, but revenues will go down …. There will likely be job losses," Despatie said.

"We think it is not good news in terms of re-launching Montreal."