The City of Montreal closed the 2023 financial year with a surplus of $187.6 million. Valérie Plante’s administration expects 2024 to be financially difficult, but promises that the tax increases imposed on Montrealers next year will be lower than those in the last budget which reached 4.9%.
“187.6 million, it may seem like a large amount, but on a budget of almost 7 billion dollars, it is the equivalent of arriving kif-kif,” indicated the chairman of the committee Executive of the City, Luc Rabouin.
The City received revenues higher than forecast by 59 million and it estimates that the budgetary tightening plan put in place last fall allowed it to reduce its operating expenses enough to finish the year more comfortably.
Remember that last October, the Plante administration judged that its cushion of 40.8 million which it then anticipated for 2023 did not allow it sufficient room for maneuver. She then decreed a hiring freeze and the postponement of expenses not yet committed in the hope of releasing an amount of 115.7 million. However, the administration had imposed average tax increases of 4.9% on Montrealers for 2024.
The year 2024 will still be difficult financially for the City which anticipates a reduction in its revenues, indicated Luc Rabouin. The elected official, however, assured that the tax increases in the next budget would be lower than those imposed on Montrealers in 2024. “It is certain that we will not be at 4.9%,” he affirmed, recalling that during the last election campaign, the administration committed not to raise taxes beyond inflation.
Slowdown in real estate
In 2023, the City recorded a drop in revenue linked to transfer taxes compared to forecasts, i.e. a negative difference of 43.9 million in 2023. On the other hand, it received 7.2 million more than anticipated with the construction or modification licenses and permits.
Revenues from fines were also lower than expected, i.e. 24.7 million less, and those from fines and penalties represented 4 million less than budgeted revenues.
Real estate growth was also slower than expected and several construction projects were delayed in 2023. Overall, tax revenues were therefore reduced by 14.7 million compared to forecasts, of which 7.6 million are attributable to slowdown in construction.
However, some operating costs exceeded forecasts. This is the case for snow removal which cost 46.2 million more than expected and the overtime of public security services which increased remuneration by 52.6 million. The hiring of 362 police officers in 2023 should reduce overtime spending at the Montreal Police Service (SPVM) in 2024.
As for the debt, it reached $6.7 billion as of December 31, 2023.
For the opposition, the financial statements presented by the administration do not bode well for next year. “The city’s coffers are empty. We are on the verge of a financial crisis,” said the mayor of the Saint-Laurent borough, Alan DeSousa, who says he fears significant service reductions in the next budget which will be tabled this fall. The elected official from Ensemble Montréal criticized the Plante administration for being incapable of controlling its expenses, which it financed thanks to tax increases of nearly 9% in two years.
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