Months after imposing tax hikes, City of Montreal declares budget surplus

After raising taxes at the beginning of the year to make up for a supposed budget shortfall, the Plante administration now finds itself with extra money in the city’s coffers: a surplus of $139.5 million.

City unexpectedly has an extra $140M in its coffers, annual financial report shows

Montreal Mayor Valérie Plante now finds herself with a budget surplus of $139.5 million, not a $358-million deficit as initially announced when she took office last fall. (CBC)

After raising taxes at the beginning of the year to make up for what was then described as a "huge" budget shortfall, the Plante administration now finds itself with extra money in the city's coffers: a surplus of $139.5 million.

The findings came in the 2017 financial report, which was tabled by the administration Thursday afternoon.

The report states that unexpected additional revenues of $313.6 million are one of the main reasons for the surplus.

"Extraordinary factors explain, in part, the surplus in the annual financial report, similar to 2016," Benoit Dorais, the city's executive committee chair, wrote in the report.

"We are seeing a sharp increase in government transfers of $105 million."

The report goes on to say that a "robust" real estate market also allowed the City to reap additional revenues of $58.5 million in transfer taxes and another $25.6 million in revenues from licences and permits.

'She lied,' opposition says

The surplus comes a few months after residential and commercial taxes were raised well above the rate of inflation — the city-wide average was 3.3 per cent.

Throughout her campaign, Valérie Plante promised to keep property tax hikes below inflation, but said she could no longer keep that promise when she saw the city had a deficit of $358 million.

The opposition party issued a news released late Thursday, after the financial report was tabled, with strong words for the mayor.

"[Valérie Plante] knew all this information. She lied to Montrealers," said opposition leader Lionel Perez.

"This tax hike was absolutely not necessary. She had room to manoeuvre based on the efforts made by our previous administration."

Perez said there was no need to increase the water tax, which Plante raised by 1.1 per cent, and said property taxes hikes could have been limited to 0.9 per cent, rather than Plante's three per cent spike.

How will surplus be spent?

Based on the financial report, the city's executive committee will distribute the surplus to four main areas.

About $45M will go toward snow-related matters, which includes the creation of a new $35 million reserve fund to pay for any additional snow removal expenses that may come up in the 2018 winter season.

The rest will go toward absorbing the agglomeration deficit, managing the boroughs and implementing measures in the city's annual budget.

Based on a report by Radio-Canada