CITY OF MONTREAL - OFFICE OF THE MAYOR/EXECUTIVE COMMITTEE

CITY OF MONTREAL - OFFICE OF THE MAYOR/EXECUTIVE COMMITTEE

November 29, 2006 10:00 ET

Ville de Montreal 2007 Budget: The Tremblay-Zampino Administration Honours its Commitment Not to Raise the General Tax Burden for Montrealers

MONTREAL, QUEBEC--(CCNMatthews - Nov. 29, 2006) - The budget the Tremblay-Zampino administration tabled this morning does not raise general tax burden for Montrealers. "Although the 2007 budget was prepared in a difficult financial situation, it enables us to continue improving public services, while respecting Montrealers' ability to pay," said Montreal Mayor Gerald Tremblay.

Nevertheless, individual tax accounts may be either lower or higher, depending on the new three-year assessment roll which lists much greater values for most properties, resulting in tax shifts between property owners.

On average, property values have increased by 47.4% in the residential, and by 21.8% in the non-residential sectors of the agglomeration. However, in the Ville de Montreal, residential values have increased by an average of 49.7% and non-residential, by 22.7%.

Two measures have been applied to attenuate the effects of this new assessment roll. First, all property tax rates have been reduced to neutralize the impact of assessed values. Moreover, to lighten the tax burden, variations in property values have been staggered over a four-year period. But this measure first must be approved by the Quebec government before it can be applied.

Borough taxes

Also, four boroughs - LaSalle, Ville-Marie, Anjou and Lachine - are taking advantage of the city charter provision that enables them to charge local taxes. The new fiscal charges will result in additional taxes of $14.1 million for taxpayers in these boroughs solely.

Special water fund tax

Pursuant to the policy resulting from the water fund created in 2003, the city will continue to levy a special tax earmarked for upgrading water services. In 2007, this special tax will add some $20 million to the water fund, which should total $85 million in 2007. Endowed with an initial investment of $25 million, the fund should grow at an annual rate of $20 million before it tops out at $200 million in 2013. Monies raised through this fund will serve to both establish and carry out an ambitious program to rehabilitate and restructure water services across the Island of Montreal.

Former Ville de Montreal water and services tax to be abolished over two years

As part of the process to harmonize tax regimes throughout the Island, over the next two years, the Tremblay-Zampino administration has decided to abolish the water and services tax based on rental values charged to occupants of non-residential buildings in the former Montreal.

The elimination of this fiscal measure over two years, however, will result in tax shifts among non-residential buildings within the limits of the former Montreal. To lessen its impact, the city will set up a grant program to compensate for any hike in taxes exceeding 5%, between 2006 and 2007. This program, similar to one created when the business tax was abolished in 2003, will target owners of non-residential buildings worth $5 million or less in the former Montreal. In addition, the city will improve another grant program aimed at certain not-for-profit organizations that rent space for their operations but were formerly tax-exempt, to assist them in adjusting to this reform.

Total tax picture

The overview of all 2007 residential taxes - including general fiscal charges, as well as the water fund and new borough taxes - is outlined in the following table:



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Variation Number of tax accounts % of number of accounts
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Decrease or
increase lower
than inflation 143,293 44,0%
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Increase between
2% and 5% 101,866 31.3%
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Increase between
5% and 10% 57,353 17.6%
---------------------------------------------------------------------
Increase of
10% or more 23,367 7.1%
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Nearly half of these taxpayers - 44% - in the residential sector will receive either a reduced tax bill or one that is lower than the inflation rate.

The following table sets out the change in tax totals for the non-residential sector:



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Variation Number of tax accounts % of number of accounts
---------------------------------------------------------------------
Decrease or
increase lower
than inflation 12,474 50.5%
---------------------------------------------------------------------
Increase between
2% and 5% 5,760 23.3%
---------------------------------------------------------------------
Increase between
5% and 10% 3,482 14.1%
---------------------------------------------------------------------
Increase of
10% or more 3,002 12.1%
---------------------------------------------------------------------


This demonstrates that in 2007, more than 50% of taxpayers in this sector will benefit from reduced tax bills or from an increase lower than the rate of inflation.

The Chairman of the Executive Committee also underscored that even if the Tremblay-Zampino administration has succeeded this year in freezing the general tax rate, it is still vital that the city diversify its revenue sources to ensure the financial health of the metropolis.

"We have made courageous choices and acted with respect for equality among all citizens. To counter the structural financial problem confronting Montreal, we absolutely must seize the opportunity, as soon as possible, to meet with all our government partners to find a lasting solution that will enable us, to live up to Montrealers' expectations. The continued absence of new revenue sources can only weaken the city's ability to fully and efficiently meet its obligations to all of its citizens," concluded Executive Committee Chairman, Frank Zampino.

Contact Information

  • Source:
    Cabinet du maire et du comite executif
    or
    Information :
    Richard Caron
    514-872-9859 or 514-702-3538