Municipal tax holiday? Not for everyone

News - December 16, 2020

Most of Quebec's major cities have announced a freeze on tax bill increases for 2021, which is a good thing for an election year. And let us not forget that the Quebec government has allocated $800 million to municipalities to help them pay for unforeseen expenses related to the pandemic, a third of it for Montreal. Despite this, some cities still announced tax increases.

In principle, CORPIQ is not opposed to an increase in the tax bill if the budget expenditures are justified and if it helps mitigate subsequent increases. Indeed, it is likely that cities that freeze bills for 2021 will invoke this vacation for taxpayers to justify higher increases after the elections. So, it will be interesting to see what they do for 2022.

Note that cities have a communication strategy to refer to inflation to justify their tax increases to citizens. The problem is that they use projected inflation, therefore a fictitious rate, but never correct in the next budget when actual inflation proves to be lower than expected, which is generally the case. Real inflation in Quebec was only 0.8% in 2020.

CORPIQ has prepared a list of cities based on articles published in the local media. The truth will be found on the tax bills that will be mailed at the end of January.

In closing, Drummondville refused to specify what the average increase in its citizens' tax bill would be, despite the request from the local media to provide a rate. Drummondville is one of the few cities to have a new three-year property tax roll starting in 2021, but that would not prevent it from providing an estimate. When property values increase (by 9% in Drummondville compared to the previous assessment roll), the tax rate is reduced accordingly. The tax rate is then increased according to the additional budgetary requirements voted by the municipal government.