It’s the lowest increase for Montrealers since the city froze property taxes for the 2021 budget in response to the pandemic.
The Plante administration will increase the property tax rate for central city services by just 1.8 per cent in 2025, executive committee chairperson Luc Rabouin said Wednesday.
In an exclusive interview, Rabouin said the city administration worked hard over the past year making scrupulous cuts to numerous city departments’ budgets without affecting the overall quality of services he expects will be delivered to residents.
“Since I said that the inflation rate was 1.8 per cent, everyone was asking if the city taxes would be held to that level,” Rabouin said. “We know the public is already stressed with financial issues. We see high interest rates, the increase in rent and grocery costs. All costs are already going up. So we decided to announce right away the tax rate increase to reassure people.”
This is the first time in more than 20 years the city has unveiled its property tax rate change so early in the year. The city generally announces its tax rate when it unveils its budget in November, which includes the increases in expenses and revenues for the upcoming year. The city still intends to reveal most of the details of its 2025 budget during a November news conference, Rabouin said.
Rabouin said inflation accounts for a significant portion of the city’s overall increase in expenses, but there are some items that will increase at a higher rate in 2025.
Among those expenses, the administration intends to increase by six per cent its contribution to the Autorité régionale de transport métropolitain, which governs transit in the region, in order to maintain bus and métro service.
“It wasn’t easy to balance the budget at 1.8 per cent,” Rabouin said. “We are also victims of inflation, but we know the people and businesses are, too. They tell us to do what we can to be more efficient and to limit the tax increases.
While he declined to divulge exactly where the city will be making cuts, Rabouin said every city service was put under the microscope and examined to determine how they can be more efficient.
He added that despite making several cuts in expenses, the services to residents won’t be affected.
Rabouin shrugged off criticism of the previous two budgets, which included historic tax increases, saying the city’s hands were tied because of the dramatic rise in all its expenses. Even then, he said, the budgets of those years fell within the observed inflation rate.
“Now that we have inflation rates that are more reasonable, it allows us to reduce our expenses,” he said.
The city’s portion of the property tax bill makes up 85 per cent of the total. Added to that are borough tax rates, which are the rates that the boroughs charge to maintain local services. Each borough will determine its local tax rate in the coming weeks leading up to the official unveiling of the budget. Rabouin invited them on Wednesday to also hold the line on inflation.
The city’s opposition has already blasted the Plante-Rabouin administration’s determination that transfers to the boroughs be increased by 1.8 per cent. Rabouin defended that choice, saying he believes boroughs should be able to maintain services while “limiting tax increases.” However, opposition Ensemble Montréal said the increase of 1.8 per cent will force boroughs to cut back on services, since they have to absorb major increases in expenses such as salaries for borough employees, which are estimated to rise by about three per cent.
“It’s still not enough,” St-Laurent borough mayor Alan DeSousa said last week. “Without additional help, the boroughs will be forced to cut back on the services they offer to residents. The reality is this minimal increase does nothing to settle the under-financing of the boroughs and represents a reduction compared with last year,” when the central city increased the transfers by two per cent.