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Montreal plans to impose new taxes



A deficit of 200 million is currently envisaged for 2024

Tax car travel? Vacant homes? Paved parking lots? Montreal is considering new solutions to finance its next budget, according to a document made public on Wednesday.

The City discusses eco-fiscal and social taxation measures, in addition to exploring the possibility of reducing the frequency of garbage collection or snow loading. It must fill the gap of 200 million currently envisaged between expenditure and income forecast for 2024.

These ideas are submitted to civil society for a consultation which will open at the end of the month. “The objective is to find structuring and lasting solutions that will allow the metropolis to adequately finance its activities and better meet the needs of the population”, indicates the president of the executive committee of Valérie Plante, Dominique Ollivier, in the introduction.

Property taxes, which represent the city’s main source of revenue, no longer allow it to adequately meet its growing expenses and responsibilities.

Dominique Ollivier, President of the Executive Committee

Some scenarios on which the administration wishes to hear from citizens:

  • A tax on each kilometer traveled behind the wheel of a vehicle to replace the current tax on gasoline made progressively obsolete by electric vehicles.
  • A tax on vacant housing, to encourage landlords to reduce their rent to find takers. Vancouver, Toronto and Ottawa have all implemented some version of this measure in recent years.
  • A tax on impermeable surfaces – notably parking lots – that return rain and snow water to the municipal sewer system. “An ecofiscal measure of this type could allow, for example, the financing of certain infrastructures to improve the management of runoff water. »
  • Parking meters whose price changes according to demand. A pilot project is already planned downtown this year, the document reveals: the hourly rate will drop from $4 to $5 on weekday afternoons.
  • Royalties on the construction of new housing, in order to finance the new municipal services necessary to serve them. Currently, “it is all Montrealers who must bear these costs”.

The modalities of these scenarios are not fixed and are moreover part of the consultation. It is not known whether a possible mileage tax would apply to all vehicles or whether a possible tax on impermeable surfaces would only affect large parking lots, for example.

On Wednesday, the Plante administration declined to comment further on the content of its consultation document.

“Really in tune with the times”

Experts say Montreal is far from the only local government to turn to eco-taxation – taxing harmful behavior with the aim of discouraging it – in order to kill two birds with one stone: protect the environment and bail out the chests.

“It’s really in tune with the times,” explained Justin Leroux, professor of economics at HEC Montreal.

It helps change behavior and generate revenue that can then be used to improve infrastructure or reduce taxes elsewhere.

Justin Leroux, professor of economics at HEC Montreal

In addition to environmental objectives (hence the “eco” in the name), the concept can also be applied to taxes that discourage other behaviors, such as keeping a dwelling vacant, Leroux explained. “It’s really the idea of ​​modifying a behavior through a price signal,” he said.

Jean-Philippe Meloche, professor specializing in urban economics at the University of Montreal, believes that Quebec is “socially behind” other societies in terms of eco-taxation: “We have a carbon tax, but it is very weak. We have a fuel tax, but it is very low. We have a very watered-down application of eco-taxation. »

In his opinion, however, it is not local governments such as municipalities that should be held accountable. Several of these measures – notably a kilometer tax – can hardly be applied on a small scale.

Reduction of services in sight?

In addition to considering the introduction of new tax grabs, the administration’s pre-budget consultation document also mentions a possible reduction in spending by the City of Montreal.

“Are there activities for which the City should or could be required to review the level of certain services? asks Montreal in the document.

“It would be a question of the frequency [de l’enlèvement des ordures], such as weekly or bi-weekly, continues the document. Furthermore, today snow loading operations are carried out from 8 to 10 cm of snowfall. It would be good to ask whether these standards could be reviewed to generate savings without reducing the quality of services. »

The possibility of transferring certain responsibilities to the demerged cities or outright asking other levels of government to assume certain services should also be part of the reflection.

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