Montreal continues to reap the benefits of its real estate boom and has just recorded another substantial budget surplus for 2018. The City of Montreal has seen a budget surplus year after year since 2014, but it was especially large in 2018, at around $213 million. Especially when you compare this to 2017’s $140 million. That’s a difference of $73 million.
The main driving force behind this surplus is no mystery. Montreal is one of the few major cities in Canada experiencing a hot real estate market. As Benoit Dorais, the executive committee chair of Montreal puts it “Right now we have a situation where the real estate market is very, very, very good for Montrealers.” The city obtained around $106 million more than predicted in land-transfer taxes, permits and licenses.
Montreal benefits from taxes on new real estate purchases
Dorais pointed out that revenue from taxes on newly-purchased property accounted for nearly half of the Montreal budget surplus. In sheer size, this surplus is the second largest since 2012. And if we took the entire Montreal population, and divided the surplus among each resident, each one would receive around $130.
However, Dorais clarifies that Montrealers will not be given money back in the form of a rebate. “The needs in Montreal are very big. We have a lot of investments to make. And we have to keep money to realize the priorities of Montrealers in terms of mobility, the preservation of the environment and economic development.”
How will the city use the Montreal budget surplus?
This surplus will be put towards contingencies in case of an economic downturn. It can be used for snow-clearing budgets or for under-funded pension regimes. Snow-removal operations cost around $192 million last year, exceeding the budget by around 5.5%. And snow removal costs in 2019 are expected to shoot up again.
However, even with these optimistic economic figures, Dorais says that the city must remain watchful of its debt level. It has been steadily increasing in both budgets proposed by the Plante administration.