Big spending increases and a modest residential property tax hike in Montreal's 2020 budget

Mayor Valérie Plante's administration is highlighting its investments in mobility, housing, the ecological transition, buying and preserving green space and economic development, while also planning investment into road and water infrastructure.

Opposition accuses mayor of driving up debt, leaving city vulnerable if interest rates go up

Mayor Valérie Plante and Benoit Dorais, chair of Montreal's executive committee, arrive at a news conference to present the city's 2020 budget. (Jérôme Labbé/Radio-Canada)

Mayor Valérie Plante's administration will balance city spending next year between its own priorities — such as housing, green initiatives and mobility — and the perennial need for repairs to Montreal's water and road network.

The city unveiled Monday its proposed operating and capital works budgets for 2020, and there are plans to spend big.

The operating budget will be $6.17 billion, an 8.1 per cent increase ($462.9 million) compared to last year and the biggest spending increase in the three years Plante has been in office.

The city says the spending hike is partly explained by an effort to pay for infrastructure projects up front, instead of borrowing.

About $150 million of the $190 million earmarked for those projects came from the Quebec government.

Without that money, and another $63.2 million from the Société d'habitation du Québec and the Communauté métropolitaine de Montréal to help pay for social housing, the city said the spending increase would only be about $210 million, or 3.7 per cent.

Plante encouraged homeowners who questioned the property tax rate increase to contact their boroughs for explanations. (Simon Nakonechny/CBC)

The city is highlighting its investments in mobility, housing, the ecological transition, green space and parks and economic development.

"Together, they show a clear vision, with a sound and responsible and management of the city's financial resources," Plante said.

Those investments include:

  • $2.1 billion for urban planning and mobility, including money for Montreal area's regional transport agency (ARTM) to help integrate new buses and for BIXI Montreal to buy 1,000 electric bikes in 2020.
  • An additional $2.8 million to help the city carry out its climate plan, and $487 million for collection and treatment of recyclables, green and food waste.
  • $153 million for housing, including funding the city's existing goal to provide 12,000 social, affordable and family housing units by 2020.
  • Just under $625 million for buying and preserving green space and upgrading parks and recreational facilities. 
  • $555 million for the city's economic development strategy.

Like last year, the biggest chunks of money from the operating budget will be spent on public security and servicing the debt, with about $1 billion going toward each expense.

Almost half a billion dollars ($497 million) will be spent on water infrastructure in 2020 alone, which includes a program to help accelerate the replacement of lead service entry pipes.

The budget is designed to improve people's lives, Plante said, pointing to measures such as the addition of 30 new jobs at 311, the city's public information service.

There will also be increased funding for the city's mobility squad, tasked with quickly intervening to solve traffic problems in a city beset by construction.

The orange cones aren't going anywhere any time soon. More than $6 billion is budgeted for a three-year capital works plan, with half of that money going toward paying for work on road and water infrastructure.

The budget will be tabled at a city council meeting Monday afternoon. The vote is next month.

More units, higher tax hike

The average residential tax rate will increase by 2.1 per cent, a couple of ticks above the projected inflation rate for 2020, which is 1.9 per cent.

Verdun residents will see the largest increase at 3.2 per cent, followed closely by the Côte-des-Neiges—Notre-Dame-de-Grâce and Plateau-Mont-Royal boroughs at 3.1 per cent.

Owners of buildings with six units or more will see bigger increases:  8.4 per cent in Ville‐Marie, 5.8 per cent in Côte‐des‐Neiges–Notre‐Dame‐de‐Grâce and 5.7 per cent in Outremont.

Plante pointed out that property tax rates are only partially controlled by the central city. They are also determined partly by the boroughs, as well as being based on property assessments done by the province.

She said the central city and 12 boroughs decided to keep their increases in line with inflation. But other boroughs did not.

"I invite citizens to ask their borough councils" about the increases, she said.

Non-residential properties will see tax rates go up by an average of 1.5 per cent. But they will also get a 12.5 per cent property tax reduction on the first $625,000 of their assessment.

The city will also have, for the first time, a participatory budget, with $10 million earmarked for projects proposed by citizens. Details on how the money will be doled out will come in the new year.

'Unsustainable for the future'

Opposition leader Lionel Perez was quick to criticize the proposed budget, saying it demonstrates the Plante administration's "inability to control expenses."

City spending has increased nearly $1 billion, or 17.6 per cent, between 2018 and 2020, Perez said.

"This is going to simply be unsustainable for the future and it's going to cost more money through debt — through interest," he said. "That is going to cause a risk for the financial stability and health of Montreal."

He called the $150 million Montreal received in infrastructure spending from Quebec a "bailout" to avoid financial disaster this year.

Coun. Alan DeSousa (left) and opposition leader Lionel Perez said the proposed budget demonstrates the Plante administration is unable to control expenses. (Jérôme Labbé/Radio-Canada)

Coun. Alan DeSousa, the opposition's finance critic, said the mayor is refusing to respect the city's debt policy, which calls for debt not to exceed 100 per cent of city revenues. According to his calculations, that ratio will hit 109 per cent this year. 

"It's just totally nuts to have a debt policy and not respect it for six to seven years," DeSousa said. "I'm not willing to give them a blank cheque."


Kamila Hinkson


Kamila Hinkson is a journalist at CBC Montreal. Follow her on Twitter at @kamilahinkson.

With files from Simon Nakonechny and Isaac Olson


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