Montreal’s budget aims to ease pressure on businesses through lower tax increases

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Montreal is pursuing a strategy of increasing non-residential construction taxes more slowly than residential taxes, in an attempt to ease the pressure on many businesses.

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Total taxes on non-residential buildings will increase an average of 1.5 percent in 2022, compared to 2 percent for residential properties. municipal budget documents released Wednesday Show. Montreal will increase the threshold at which the city’s so-called differentiated tax rate applies, which means that most business owners should see their tax burden reduced.

Montreal introduced the differentiated rate for non-residential buildings in time for fiscal 2019, shifting more of the burden to more valuable properties.

The differentiated tax rate threshold will increase to $ 900,000 from the current $ 750,000, Montreal said. The measure should benefit about 70 percent of homeowners and generate an average savings of $ 4,966, or 16.5 percent, for buildings valued at less than $ 900,000.

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For a non-residential property valued at $ 450,000, the increase in the differentiated rate should generate annual savings of $ 2,483, budget documents show. The savings on a $ 1.5 million property would be $ 4,052, a tax reduction of about eight percent.

The measure is part of a Plante administration’s strategy to increase taxes on non-residential construction 25% slower than residential taxes. This means that every time residential taxes go up one percent, non-residential taxes will go up 0.75 percent. The strategy will be reviewed in 2024.

Next year’s budget includes $ 50 million to create a new economic development strategy and stimulate activity downtown. Montreal has invested more than $ 250 million in emergency measures and economic recovery since the start of the pandemic.

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More than $ 414 million will be allocated to the redevelopment of Ste-Catherine St. W. and McGill College Ave. between 2022 and 2031, budget documents show.

About $ 35 million will be spent on the renovation of Peel St. over the next decade, while another $ 101 million will go to the Quartier des gares, a new neighborhood south of downtown that includes the Central Station metro stations, Bonaventure and Lucien-L’Allier. and the Terminus Center-ville bus terminal on rue de la Gauchetière St.

Economic growth in Greater Montreal should hit 4.1% next year, below the estimated 7% growth for 2021, according to the Conference Board of Canada.

Meanwhile, unemployment is expected to fall to 6.4 percent in 2022 from an estimated 7.4 percent this year. Many companies in Montreal and elsewhere in Quebec are grappling with a worker shortage.

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Several public, private and institutional projects will boost the construction industry. They include the construction of the Réseau express métropolitain light rail network, as well as the repair of the Ville-Marie, Viger and Louis-Hippolyte-La Fontaine tunnels. About 60 construction projects of at least $ 5 million each were underway in May for a combined value of nearly $ 29 billion.

Montreal’s real estate market shows signs of overheating, according to a September report by the Canadian Mortgage and Housing Corporation. Home prices continued to rise in 2021, resulting in a high degree of vulnerability, CMHC said.

Home resales in the Montreal area are expected to decline in 2022, budget documents show. Key factors include decreased affordability, a possible increase in mortgage rates and the fact that a large proportion of households that were considering moving at the start of the pandemic will already have done so.

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