MONTREAL – A hotly-contested Montreal tax has quietly doubled on outdoor parking lots, enraging owners who are now wrestling between losing money and passing the rising charges on to customers, multiple lot operators said.
First introduced by the city in 2010, the tax on all non-residential downtown lots has helped drive up parking garage prices more rapidly in Montreal than in almost any other large Canadian city, an October 2012 report by Colliers International said.
However the new higher tax rate, approved in the city’s November 2012 budget, only applies to outdoor parking in an effort by Montreal to “get rid of the lots to promote residential development,” city spokesperson Darren Becker said.
“It’s a major problem,” said David Cohen, who runs Modico Parking Inc., which operates outdoor lots in downtown Montreal. “You just can’t keep passing (the higher taxes) on.”
According to Modico’s bill, the parking tax on just one of the company’s lots has doubled from $7,033 last year to $14,066 in 2013, after the rate passed from $14.85 to $29.70 per square metre. The 2010 tax ranges between $14.85 and $19.80 per square metre for outdoor lots, depending on the location.
“The property owners are going to be looking to us to cover this,” said Jonathan Besner, president of Safeway Parking, which manages 40 parking lots, mostly in Montreal’s downtown core.
“But it’s impossible. You can’t keep raising prices to keep up with this tax grab.”
The higher parking taxes come at a time when Montreal property owners are already facing rising municipal tax bills because of soaring land values.
Rising taxes, combined with the housing boom fuelled by low interest rates, have prompted several owners like Modico to sell off their well-located parking lots to condo developers.
The city of Montreal has been encouraging this trend, by changing zoning to allow for the development of taller buildings, which favours more dense residential development and public transit use.
But higher taxes on parking lots could become an additional cost of doing business that could drive more Montreal companies out to the suburbs, some commercial real estate experts warn.
“Companies are going to have to take this cost into account when they are renewing their leases, or deciding to move downtown,” said Andrew Maravita, managing director of Colliers’s Montreal bureau in an October interview.
According to the Colliers report, a combination of higher taxes and the transformation of downtown lots into condos has driven indoor parking prices up nearly 12 per cent in Montreal, year over year, the highest leap in the country.
The median rate, including all taxes, for an unreserved parking spot in Montreal’s garages was $330.96 a month, second only to Calgary.
City spokesperson Becker said Montreal parking prices are still reasonable compared to other major North American cities.
“There have been some increases, but we don’t think it’s going to chase anyone (companies) out to the South Shore,” he said.
“It’s up to the owners to decide whether to raise prices.”