The City of Montreal’s finances are currently running in the red.
Officials released details illustrating that revenues are down by almost $120 million this year and expenses have dramatically increased.
“We realize that there was a real slowing down of the economic context,” Dominique Ollivier, Montreal’s executive committee chairperson, said at a Wednesday press conference.
Revenues generated by real estate sales, known as the Welcome Tax, dropped because of a slowdown in the real estate market.
And city expenses dramatically increased.
Labour costs are up, contracts cost more and the price tag associated with measures to fight climate change increased. These are just some of the expense increases Ollivier outlined.
She says to ensure a balanced budget, some major cost savings are required.
Four hundred municipal job vacancies won’t be filled this year; work on city studies and reports will be suspended and promotional campaigns of the city will be postponed until 2024.
“We started measures to make sure, strict measures, to make sure that we can finish the year in balance,” Ollivier said.
The executive committee chairperson says money from the snow removal budget will also be used to help balance the books. She’s hoping, combined, all of these measures will create a $40-million surplus by year-end,
Ollivier also says they are planning to keep next year’s property taxes below the city’s current rate of inflation of 5.2 per cent.
“Our promise is not to go over the inflation rate,” she said.
But Alan DeSousa, the city’s opposition critic on finance, complains it’s not enough,
He insists next year’s property taxes should be tagged not to current inflation rates but to the projected cost of living in 2024.
“They got to be able to get their house in order to keep any tax increases below the forecasted rate of inflation for 2024, not this year’s current inflation rate,” DeSousa told Global News.
He adds that city officials should have seen the higher expenses and lower revenues coming well before October and trying to find $120 million in savings in the last two months of the year will be a major challenge.
“This is just not the type of thing you expect to have coming into year-end. It should have been better thought out, better planned and the administration has failed in this regard,” he said.
More details on spending and the property tax levels of 2024 will be known when the budget is released, scheduled for November.