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Claiming to be responding to inflationary pressure, the Plante administration said Wednesday it is increasing the allotments for the city’s 19 boroughs.
At the tail end of the weekly public executive committee meeting, chairperson Luc Rabouin said the city will be indexing its borough budgets to the rate of inflation.
“We will index the transfers to boroughs to the level of inflation, which is 1.8 per cent,” Rabouin said Wednesday. “That will allow boroughs to maintain services and to limit the increase of local boroughs’ taxes, which are two important objectives for us.”
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The city’s boroughs depend heavily on allotments, transferred by the central city, to draw up their annual budgets. While boroughs charge fees for local services and permits, central-city transfers make up the lion’s share of a borough’s budget.
Some Montrealers may be surprised to see that 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 expects the inflation rate to creep back to the stated goal of two per cent sometime in 2025.
The Gazette reached out to the administration to ask how it determined the inflation rate to be 1.8 per cent and did not immediately hear back.
Earlier this month, several borough mayors who are part of opposition Ensemble Montréal introduced a motion at the city council meeting asking for the 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.
Ensemble Montréal added that it wants the city to review the funding formula in place for boroughs.
Reacting on Wednesday, Alan DeSousa, the opposition’s spokesperson on finance issues, said he’s pleased the Plante administration recognized the need to increase the budgeted allotments, but boroughs need more than what is being given.
“It’s still not enough,” said DeSousa, who is also the borough mayor of St-Laurent. “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 underfinancing of the boroughs and represents a reduction compared with last year (when the central city increased the transfers by two per cent).”
DeSousa added the boroughs also have to absorb the increased costs of new collective agreements negotiated by the central city, which include hefty salary increases for employees.
This report will be updated.
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