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Montreal posts a small surplus for 2023, but a tax increase is still likely

Click to play video: 'Montreal financial report under fire for overspending'
Montreal financial report under fire for overspending
WATCH: Montrealers will see another increase in their property taxes next year. The city of Montreal unveiled the state of its finances on Friday saying lower revenues have taken a toll. While the city managed to post a surplus this year, the opposition calls the city's financial management a mess. Global's Gloria Henriquez reports – Jun 14, 2024

The City of Montreal unveiled the state of its finances on Friday, releasing how much money it spent last year.

The key takeaway: expenses are up and revenues are down.

One of the biggest expenditures went toward public security.

Last year, the city spent $818 million on its police force, an estimated $311 million over budget.

The reason? New hires and overtime.

“That’s our main gap from budget to budget,” said Serge Lamontagne, the city’s director general.

As for revenues, the city says it received less income from the “welcome tax,” which is levied on all property purchases.

With high interest rates, people are holding off from buying property.

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Despite the challenges, the city is posting a surplus of $187.6 million, about two per cent of the total budget.

“It’s one of the lowest surplus over the last 10 years. It’s very low,” said Luc Rabouin,  chair of city council’s executive committee.

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As a result, the city says it won’t be able to stop taxes from rising next year, although the officials promise the hike won’t be above 4.9 per cent.

Click to play video: 'Montreal’s 2024 budget not sitting well with business community'
Montreal’s 2024 budget not sitting well with business community

The opposition calls the state of the city’s finances “outrageous.”

“Here, we have spending that is reckless, that is irresponsible,” said Alan De Sousa, mayor of the borough of Saint-Laurent and member of city hall’s opposition party, Ensemble Montréal.

De Sousa says the only reason the city posted a surplus is because it raised taxes, not because of good management.

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“We see the results because the city’s coffers are empty. We’re really at the door of a financial crisis,” De Sousa said.

But economist Moshe Lander isn’t as concerned. “They essentially did what their budget said, and that’s really all you ask for a budget to do,” he said.

The city had to control its expenses last year, going as far as freezing hiring of several posted positions.

Lander predicts 2024 should see a return to business as usual as interest rates are expected to go down and so is inflation.

Click to play video: 'Montreal city hall reopens after a $211M face lift'
Montreal city hall reopens after a $211M face lift

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