Under Legault, billions were transferred to municipal coffers

In 2021 (latest data), Quebec’s communities shared a whopping $5.9 billion in “government transfer” revenue, most of which was paid for by the Legault government.

Compared to 2018 (the Caquistes took power in October), government contributions increased by $1.7 billion, a 40% increase in three years. Within 5 years, i.e. compared to 2016, they have more than doubled.

According to the latest statement (January 2023) from the Department of Municipal Affairs and Housing (MAMH), in 2021 Quebec municipalities generated combined revenues of US$26.3 billion.

“State transfers” thus accounted for 22.4% of all municipal revenues in 2021. In 2018, these transfers corresponded to 17.9% of municipal revenues and in 2016 only 13.1%.

One thing is certain: as “government transfers” have continued to rise in 2022, apparently surpassing the $6 billion mark, they occupy an even more important place in municipal revenues.

PROPERTY TAXES

The main source of income for municipalities is, of course, property taxes.

The amount raised in 2021 is $12.63 billion, which is $1 billion more than in 2018, an increase of 8.9% over three years. This means that property taxes account for 48% of all municipal income.

Given the sharp increase in property valuations following the 2022 review of the valuation register, I would like to remind you that a great many owners were unpleasantly surprised to see their council tax accounts explode in 2023.

I look forward to seeing the actual impact of the assessment list review on all property taxes collected in 2023. Unfortunately, the Ministry of Municipal Affairs will not be able to tell us the total amount of property taxes we paid in 2023 for two years (January 2025).

GOVERNMENT BUILDING

Do governments pay their fair share of municipal taxes on government buildings? Certainly not, according to the municipal world.

In 2021, local governments received $901 million in “compensation in lieu of taxes” from governments. Almost $77.5 million more than in 2018. Of the $901 million, Quebec will pay $660 million, Ottawa $201 million, and other organizations $40 million.

Question: Are government buildings measured at fair value? Impossible to know.

OTHER SOURCES OF INCOME

Sales of goods and services (public transport, public safety, activities, municipal services), other revenues (fines, penalties, royalties, real estate developers, duties on real estate transfers, etc.) and pricing of goods and services all reported an increase in 2021 Revenue of $6.88 billion.

This is almost the same amount as in 2018.

DEBTS

Municipal long-term debt reached $30 billion in 2021, according to the latest Quebec government budget.

This equated to a municipal debt of about $3,500 per capita.

THE PROBLEM OF THE COMMUNITIES

The Quebec government is pumping more and more money into municipalities, but it’s never enough. Because of this, they complain year after year through the Union of Municipalities and the Union of Municipalities of Quebec that they lack money.

The cost of construction contracts has risen sharply, by as much as 30% since 2020. Inflation alone created a billion-dollar hole in 2022.

However, it must be stated that the municipalities do not help their cause if they submit their financial applications as part of the preliminary consultations.

According to Statistics Quebec, in 2022, communities with a population of 25,000 or more paid their employees total compensation (salary, benefits, retirement) that was 34.6% higher than the compensation paid by the Quebec government to its employees doing similar jobs exercised in the public service and the semi-public service.

Compared to private sector employees, the difference in total pay for municipal employees was 25.3% for union members and 40.6% for non-union members.

CONSOLIDATED SALES

Source: Department of Municipal Affairs and Housing