Montrealers' tax bill increase 'definitely' won't be above inflation, city says

With the real estate market soaring throughout much of this pandemic and homeowners in Montreal worried about the size of next year's municipaltax bill, the city says it's not sure how big the increase will be but promises it will not be above the rate of inflation.

The inflation rate currently stands at seven per cent.The City of Montreal willrelease next year'sbudget in December.

"It'sdefinitely going to be under the rate of inflation," said Dominique Ollivier, president of Montreal's executive committee, when talking about the expected municipaltax hike.

Ollivier said the city wants to take into account inflation, including the the increasing cost of groceries, and rising interest rates.

The city doesn't want to burden the taxpayer, Ollivier says, but has to make sure its budget accounts for municipal services which she says havebeen "hit as badly as the citizens."

"We're trying to find that point of equilibrium, that balance point, to be able to make sure that the Montrealers are preserved in their capacity to pay while looking at the different needs of the city," she said.

Boroughs feel forced to hike own taxes

Adding to homeowners' concerns, the majority of the city's boroughs have already released their own budget and they include hefty borough tax increases.

Those increasesareto compensate for what boroughssaid are insufficienttransfers from the city centre, which have been capped at two per cent for 2023. Twelve out of 19 boroughs say they had no choice but to increase the boroughtax for next year. The average increase among them is nine per cent.

Montreal's boroughs are financed mainly from two sources: the municipaland boroughtaxes imposedon residents. The money goes toward increasing the level of local services and projects in thecapital works programs.

Highest among those budgets already tabled is MercierHochelaga-Maisonneuve, which raised its borough tax by 14 per cent.Cte-des-NeigesNotre-Dame-de-Grceincreased its own by 12 per centand Plateau-Mont-Royalby six per cent.

The increases are significant, but borough taxes only make up about 10 per cent of the overall tax bill. Property taxes account for about 70 per cent.

Next month,the city will hold a public forumto hear from stakeholders about taxation and diversifying income, because Ollivier saysplacing the burden on citizens and their property taxes isn't sustainable.