A majority of property owners in Montreal will pay slightly more tax next year, although the overall taxation rate will remain frozen, according to the city's 2007 budget, announced Wednesday morning.

The $3.927-billion budget is slightly larger than last year's, but the 1.86 per cent ($71.6-million) increase is below the inflation rate and marks the smallest budget increase since mayor Gérald Tremblay took office in 2002, said Frank Zampino, head of the executive committee.

The sharp rise in property values in several areas of Montreal will mean owners will have to pay more tax, but for the most part it will be a slight increase, Tremblay said. On average, property values have gone up by 47.4 per cent for residences, and 21.8 per cent for commercial lots since the last valuation roll in 2002.

About 24.2 per cent of property owners will see their taxes go down, and 75.8 per cent will have to pay more, but how much more depends on where they live. Of those facing tax hikes, two-thirds will pay five per cent or less, and about seven per cent will pay 10 per cent or more.

The 2007 property tax rate increases break down as follows for property owners:

• 19 per cent will pay between zero and two per cent more.
• 31 per cent will pay between two and five per cent more.
• 17.5 per cent will pay between five and 10 per cent more.
• Seven per cent will pay 10 per cent or more.

The biggest property tax hikes will affect residents in what are traditionally considered poorer regions of the city, including Verdun, Villeray, and Parc-Extension, Montreal's south-west, and the Ville-Marie borough.

The city has already requested the province stagger the valuation roll increase over the next four years, Zampino said, in order to "neutralize, globally, the impact of the roll call increase."

Spending increases

The budget accounts for an increase in spending on water, through a new $20-million water fund to help remedy the city's crumbling aqueduct system. Other expenditures forecast for Montreal include:

• $278 million to Montreal's Public Transit Corporation.
• $10 million to improve cleanliness.
• $9 million to improve 911/first responder service.
• $8 million to install police security services in the subway system.
• $1.5 million to extend library hours.

Montreal needs more money

Tremblay said he's very proud of the budget, given Montreal's tight fiscal situation. Keeping the overall budget increases below the inflation rate reflects the city's constraint in spending money. But that's not sustainable in the long-term.

"We've focused a lot on our expenses; now we must focus on [improving] our revenues," Tremblay said. Montreal needs to diversify its revenues in order to reduce its dependency on property owners, he added.

Ideally, the provincial government would increase municipal funding, which has been an ongoing source of conflict between the city and the province.

The budget provides for modest revenue increases from parcometers and the metro system. Street parking rates will go up slightly and the city will crack down on fines and tickets.

Boroughs face a freeze in their part of the city's budget, and several, including Anjou, Lachine, Lasalle and Ville-Marie, have taken matters into their own hands by imposing local taxes to pay for local projects — which will generate about $20 million overall.

Tremblay said that decision is out of his control. "It's a local power, and it's up to local representatives to justify their decisions."