Borough allotment increases fall short, Ensemble Montréal says

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Montreal boroughs will have to tighten their belts despite the Plante administration’s decision to raise borough allotments, the city’s opposition party charged Wednesday.

During the weekly executive committee meeting Wednesday morning, chairperson Luc Rabouin announced the city will be increasing by 1.8 per cent the amount it hands out to the boroughs for their annual budgets. He said this is in line with the observed rate of inflation for August.

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“We will index the transfers to boroughs to the level of inflation, which is 1.8 per cent,” Rabouin said. “That will allow boroughs to maintain services and to limit the increase of local boroughs’ taxes, which are two important objectives for us.”

On Wednesday, the Ensemble Montréal opposition party said it welcomed the increases, but said the boroughs will still have to cut back their expenses for 2025 in order to absorb the cost of salary increases. Some cutbacks have already begun. In Montreal North, for example, library hours have been cut for two of the borough’s four libraries.

Ensemble Montréal warned that more cuts will be necessary to meet budget objectives for 2025.

“It’s still not enough,” said St-Laurent borough mayor Alan DeSousa. “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.

Earlier this month, several borough mayors who are members of Ensemble Montréal introduced a motion at a city council meeting asking for the central city’s payments to be indexed to the rate of inflation for this year, and for the amounts to be increased by two per cent annually going forward. The motion also called for the city to transfer an additional amount to offset salary increases, which amount to around three per cent per year.

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Salaries make up the majority of a borough’s local budget. In Montreal North, for example, 78 per cent of the budget’s expenses is made up of salaries, borough mayor Christine Black said Wednesday.

Since it came into power in 2017, the Plante administration has generally increased the borough allotments by one per cent. However, to account for record high inflation rates of more than four per cent, the central city increased its allotment by two per cent for both the 2023 and 2024 budget years.

The boroughs depend heavily on allotments from the central city to draw up their annual budgets. They can also raise revenues by charging fees for local services and permits, and increasing borough taxes.

Some Montrealers may be surprised to hear the city has determined that the inflation rate is as low as 1.8 per cent. In fact, the Bank of Canada determined that the rate of inflation in July was 2.5 per cent in its July Monetary Policy Report. In the same report, the bank said it expected the inflation rate to creep back to the stated goal of two per cent sometime in 2025.

However, Rabouin said the Plante administration uses the observed inflation rate as determined by the Institut de la statistique du Québec, which pegged it at 1.8 per cent for August for the Montreal region. Rabouin said that’s the rate the administration will use in its calculations for tax increases. He added that the Plante administration has promised to hold tax increases to within the rate of inflation.

The city generally presents its annual budget, which includes increases to property tax bills, every November.

jmagder@postmedia.com

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