The City of Montreal’s budget includes a discreet increase in the tax burden on taxpayers which will ultimately reach 35 million.
From 2011 to 2023, Montreal benefited from the $45 passenger vehicle registration tax, or around $35 million per year in recent years. It is used to finance public transport. In practice, the revenues only passed through since the City redirected all the sums to the Regional Metropolitan Transport Authority (ARTM), the organization responsible for public transport.
Starting in 2024, the registration tax, which increases to $59 on January 1, will go directly to the ARTM, without going through the City’s coffers.
Taxpaying motorists in Montreal will continue to pay the tax, $59 instead of $45, when renewing the registration of their vehicle with the Société d’assurance automobile du Québec. On the other hand, this taxpayer could have expected that the City’s taxes would drop accordingly, since the revenues and expenses associated with the registration tax are no longer the responsibility of Montreal. This will not be the case.
“We greatly underestimate the extent to which the tax burden on Montreal taxpayers has increased with Valérie Plante’s last budget,” says Nicolas Gagnon, director for Quebec of the Canadian Taxpayers Federation, who was asked to comment on the issue.
According to budget documents, revenue from taxation is 4.18 billion in 2024, compared to 3.98 billion in 2023, a difference of 202 million.
If we remove the 35 million from the income registration tax from the 2023 budget to compare apples to apples, the real tax increase increases to 237 million, or 17% more than it seems at first on board.
“The City is making the political choice to maintain, or even increase, its contributions to the ARTM even if it no longer receives revenue from the registration tax. This forces him to increase other taxes as a result, observes Gabriel Giguère, public policy analyst at the Montreal Economic Institute. Ultimately, the taxpayer assumes a greater burden. »
To be precise, the real impact in 2024 will be 18 million and not 35 million because of the overlap in registration renewal between the two years.
As it is explained in the budget document: “Since Montreal motorists will pay this tax throughout 2023 by renewing their registration for a period of 12 months, the last revenue from it will be recorded in 2024.”
The real increase in the tax burden on Montrealers therefore amounts to 220 million in 2024, 9% more than the budget documents reveal.