The City of Montreal says it is financially prepared to face the potential impact the novel coronavirus crisis will have on its economy.
The city made the comments as it released its annual financial report, posting a surplus of $250.9 million, the highest in the past 11 years, officials said.
“Thanks to a healthy management of our public finances these past few years and to this day, we are able to act promptly to minimize the impact of an unforeseen pause and have the fundamentals in place to perform a fast relaunch,” said Benoit Dorais, the city’s executive committee president.
However optimistic the tone was, Dorais admitted it wasn’t possible to measure the exact impact the coronavirus crisis will have on the city’s finances.
As housing continues to be a priority for the city, Dorais said plans to create 12,000 social and affordable housing units on the island by 2021 are still in place. But he admitted there could be delays in finalizing the projects that are currently under construction.
Overall, he said he was proud of the city’s financial health.
“They should be proud, they’re good numbers,” said Moshe Lander, a Concordia University economy professor.
“They got the big picture right.”
But the economist says a few things are missing.
“Where is the preparation for the downturn in the cycle?” Lander said. “Self-congratulation shouldn’t become overconfidence. This is the type of thing you should be doing when you have these surpluses.”
One of those potential downturn cycles could be seen in the housing market.
Until before the coronavirus crisis hit, the city was going through a property boom, which, according to the municipal government, generated a $94.6-million revenue coming from real estate transfer fees and $26.3 million in construction permit fees this past year.
“You build today in the anticipation there is going to be people there to fill it. Are we going to be talking five years from now in a property glut?” Lander said.
More help for local businesses
The City of Montreal is putting in place a $40-million loan program for small and medium-sized businesses to help deal with the crisis.
Affected businesses will be able to access a loan of up to $50,000.
According to Luc Rabouin, the city’s executive committee member responsible for economic and commercial development, the program will allow companies to have the necessary liquidity to maintain, consolidate or relaunch their activities amidst the COVID-19 crisis.
The program is available for all small and medium-sized companies that are affected by COVID-19, including social enterprises such as co-ops.
Those who choose to take on a loan will only have to start reimbursing it in six months. There will also be a moratorium of six months on the principal interest, which is three per cent.
The city estimates at least 800 Montreal companies will be supported by the program.
The program is part of a plan set up by the provincial government to provide $150 million in temporary emergency funding to municipalities to aid entrepreneurs as they weather the storm.
Under the plan, Montreal is receiving a $40-million loan and the remaining $110 million will be divided among other municipalities in the province.
The city had previously put in place other relief measures for business owners such as postponing the payment of the second instalment of municipal taxes, imposing a moratorium on the payment of loans offered by PME Montreal and investing $5 million into solutions targeted specifically towards industries such as tourism, arts and culture.
The PME Montreal network will ensure the deployment of the new loan program.
A registration form will soon be available on its website.
The aid is expected to be available at the end of April.
For more information, you can call the city’s hotline 514 394-1793 or visit its website.
–With files from Global’s Alessia Maratta and Brittany Henriques
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