Suburbs denounce ‘abusive’ payment increases in Montreal 2022 budget

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The island suburbs of Montreal are denouncing “abusive” increases in their transfer payments to the agglomeration council next year, which are contained in the 2022 municipal budget that was presented by Mayor Valérie Plante on Wednesday.

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The Association of Suburban Municipalities (ASM), which represents the island’s separate suburbs, said it “strongly denounces” the Plante administration’s decision to increase transfer payments to the agglomeration by an average of 10.9 percent. in the city’s operating budget of $ 6.246 billion by 2022. Montreal and the agglomeration council.

“The disclosed increases in the financial framework are abusive and demonstrate the extent to which Montreal’s municipal administration is disconnected from the financial reality of suburban cities,” said ASM President Beny Masella, who is Mayor of Montreal West.

Given that 30 percent of the homes in the separate municipalities are for rent, “ASM fears a significant additional impact on the shoulders of many families. For a large number, the budget pressures are already unbearable. “

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With its size, the city of Montreal controls decision-making in the agglomeration council, which was created with the 2006 spin-offs to administer island-wide services such as police and fire departments, wastewater treatment, and public transportation. Rather than directly taxing residents and businesses, agglomeration is financed by annual transfers from the 15 separate suburbs and the city of Montreal, which are calculated on the total value of real estate in each municipality.

The mayor of Montreal, the executive committee and the city finance department decide the annual budget of the agglomeration council without the participation of the suburbs.

In 2022, transfer payments to the agglomeration are budgeted to increase by $ 273.4 million, to reach $ 2.78 billion.

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The highest payment includes $ 211.3 million to cover the agglomeration’s year-end deficit for 2020.

By law, municipalities must present a balanced budget and any year-end deficits are normally absorbed into the subsequent budget.

The Plante administration says the 2020 deficit, a record for the agglomeration, was due to the pandemic. The argument is partially disputed by the suburbs, which say part of the deficit is due to overspending and the administration’s unrealistic budget forecast.

Dominique Ollivier, a member of the Plante administration and chairman of the Montreal city executive committee, said that if the one-time payment to cover the 2020 deficit is excluded from the calculation, transfer payments from municipalities will increase by 2.5 percent in 2022. Ollivier called that increase for agglomeration spending “more than reasonable” at a press conference to present the new budget. He also said he had met with the suburbs as recently as Tuesday to discuss the matter.

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“I reminded them that it was a decision made in the agglomeration to postpone the deficit until this year, so we had to pay this year,” said Ollivier, referring to the decision to postpone the payment of the 2020 deficit to the 2022 budget. “The deficit it was caused by different COVID expenses and COVID related loss of income. “

However, Masella said the crowding deficit of $ 211.3 million cannot be fully attributed to the pandemic because the Plante administration had under-budgeted certain expenses, such as police overtime, and had unrealistically forecast revenue. high for parking tickets and speeding tickets before the pandemic. paste.

“So you can’t say that it was all because of the pandemic,” Masella said in an interview.

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As calculated by the ASM, transfer payments will increase in 2022 by an average of 3.3 percent, which exceeds the projected inflation rate for 2022, when only the part of the deficit attributable to the pandemic is excluded from the increase.

Meanwhile, the suburbs have been unable to get an answer from Montreal on how much of the agglomeration’s deficit is structural and should be expected again in 2023, Masella said. The agglomeration has posted a year-end deficit every year since 2016, compared to just three times in the previous 10 years.

The Montreal administration has to contain its spending increases, Masella said. “Your fiscal policy cannot continue to be spend, spend, spend. I think there has to be a recalibration, because they don’t just affect my citizens. They are affecting everyone’s citizens on the island of Montreal. “

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Ollivier said suburbs, like Montreal, received grants from the Quebec government to help them weather the pandemic in 2020 and 2021. They should have set aside some of that combined $ 26 million for eventual payment of the agglomeration deficit, he said. Montreal received $ 263 million from Quebec.

However, Masella said Montreal received more funding per capita from the province than from the suburbs.

And while his city of Montreal West received $ 500,000 in COVID relief from the province, his transfer payment to the agglomeration will increase by $ 612,000 in 2022.

Ollivier said he has told suburban mayors that Montreal is willing to discuss financing for the agglomeration.

“We are very willing to sit down and talk about the future of other ways of doing this, and see if we can all come together in the understanding that not only the people of the City of Montreal end up having to walk all the expenses,” said Ollivier.

The ASM says the suburbs are paying, on average, $ 710 more per resident to the agglomeration in transfer payments than Montreal. In return, they receive less service than Montreal, like fewer police officers and less public transportation service.

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