Getty Images As of August 31, 2023, forecasts suggest that the City of Montreal will end the year with a surplus of 40.8 million of dollars. Which does not allow us to have sufficient room for maneuver for 2024, according to the Director General of the City.
The drop in the number of real estate transactions in the metropolis as well as the increase in costs linked to services and labor are forcing the City of Montreal to tighten its belt and freeze hiring for the next two month.
The Plante administration submitted an update on the City’s financial situation on Wednesday. Thus, as of August 31, 2023, forecasts suggest that the City will end the year with a surplus of $40.8 million. According to the City's Director General, Serge Lamontagne, this amount does not provide sufficient room for maneuver for 2024. Montreal therefore intends to reduce its spending by the end of the year.
< p>The transfer taxes, also known as the “welcome tax”, lower than expected, leave a hole of 40 million in the City’s finances. Added to this are revenues from fines given by the Service de police de la Ville de Montréal (SPVM) which show a negative difference of 35.1 million, and revenue from paid parking down by 14.1 million compared to forecast.
Ultimately, extreme weather events, such as icy conditions, extreme heat and spring floods required unforeseen expenses of 15 million.
Positions left vacant
< p>Less than a month before the submission of the City's 2024 budget, the Plante-Ollivier administration has therefore decided to tighten certain expenses.
Currently, the City has 400 vacant positions and these will not be filled by the end of the year. These are positions that are not directly linked to operations such as security or water treatment, said Mr. Lamontagne. “It has no impact on the operations of citizen services as such. The districts are not bound by this operation. » This reduction in hiring will allow the City to free up an amount of $15.1 million.
The administration also asked its services to pause expenses that had not yet been incurred. “For example, if we needed a study or an advertising campaign and the contracts had not yet been given, we asked people to postpone what they were going to do so that we could go and capture half,” explained the president of the executive committee, Dominique Ollivier. The City could also temporarily do without purchasing office supplies or computers, it was suggested. This exercise should allow it to reduce its expenses by $81.6 million.
Montreal is also setting aside an amount of $19 million from the contingent expenditure budget.
All these measures therefore allow the City to generate an amount of 115.7 million by the end of 2023.
Regarding the limited revenue linked to fines, Serge Lamontagne specified that this result was attributable to the lack of staff at the SPVM. “I think it will resolve itself in 2024. Road safety is at the heart of Mr. [Fady] Dagher [director of the SPVM],” he said.
On the other hand, some revenues exceeded forecasts. Thus, the Space for Life museums recorded increased traffic, with unforeseen revenues of $5.5 million. According to Serge Lamontagne, the success of the immersive projection Pink Floyd — The Dark Side of the Moon at the Planetarium contributed to this improvement.
Increases in taxes below 5.2%
Opposition elected officials see the presentation of the administration's financial update as “a public relations strategy to pass on a hefty bill to Montrealers.” “The Plante administration is being caught out by its mismanagement of finances. After increasing the City of Montreal's spending by nearly $1.3 billion in five years, we sense panic in the face of inflation and the drop in construction starts,” the mayor of Saint-Pierre commented by email. -Laurent, Alan DeSousa.
The Plante-Ollivier administration will table the City's 2024 budget on November 15. Last Friday, Dominique Ollivier assured that tax increases would be below 5.2%.