MONTREAL, January 19, 2022 /CNW Telbec/ – The measures presented in the Plante-Ollivier administration’s 2022 budget demonstrate once again Projet Montréal’s inability to manage municipal finances. In addition to ignoring the fifth wave of the pandemic, the administration continues to increase the indebtedness of Montrealers without offering them more or better services.
In fact, Montreal’s budget has jumped 24% over the past five years, an increase of $1.26 billion. In 2022 alone, expenditure increased by 4.7% for a total budget of $6.46 billion. Recurring revenues are also not keeping pace with expenditures, forcing the administration to squander the City’s reserves, borrow more and beg for funds from the Quebec government.
“Projet Montréal has always talked cheerfully about the City’s finances, but the reality in 2022 is that the boat is taking on water. The administration is no longer able to fulfill the promises it made to the population less than three months ago and, above all, it is no longer able to respond adequately to the many crises threatening Montreal, such as as housing, public safety and COVID-19,” said Aref Salem, Leader of the Official Opposition at Montreal City Hall.
Fill in the gaps by any means necessary
The administration presents what could be described as a “gruyère budget” as it has so many holes. Once again, revenues from several budget items, such as fines and penalties, were overestimated while several expenditures, such as public security, were underestimated in order to balance the budget. In other words, the administration manages the finances with its fingers crossed that adjustments can be made during the year to fill these gaps.
While the mayor claims the city has an “incredible borrowing capacity”, the numbers show that the reality is not so rosy. With a debt-to-equity ratio of 119%, the administration exceeds Montreal’s allowable debt for a fourth straight year and is within 1% of Standard & Poor’s downgrade scenario. This will have major consequences for Montrealers, who will pay a record price $428 million in interest in 2022.
“Nearly half a billion dollars lost! The administration assures us that it intends to return to a debt ratio of 100% in 2027, two years after the next municipal election in 2025. Obviously, it has decided not to start work in 2022. Alan De Sousa, Official Opposition Finance Critic.
Having borrowed to its limit, the administration has in recent years turned to the use of non-recurring sums, such as its near-depleted reserves, and to the provincial government. Quebec has balanced Montreal’s last two budgets at the cost of $413 million ($150 million in 2019 and $263 million in 2020-2021). This situation of financial dependence inevitably leads to political dependence, as evidenced by a response from the City’s finance department during committee hearings. The ministry said it hopes the Quebec government will pay an increase in cash spending that will allow the city to return to a 100% debt ratio by 2027 – a strategy that was to be put in place this year.
“The desire to return to a 100% debt ratio in 2027 is only a wish put on paper, not the subject of a precise administrative plan. We are managing on the fly and the lack of planning is worrying “, added Laurent Desbois, Vice-Chairman of the Finance and Administration Committee.
More and more difficult to stay the course
Weakened by its disastrous management of public finances, the administration no longer has the means to fulfill its ambitions. In the end, Montrealers are being cheated out of many promises that will not be kept. Funding for the housing department is reduced by $9 million; the $800 million promised over the next 10 years to create 60,000 affordable housing units cannot be found in the budget, and the money spent on the purchase of land is constantly being reduced. The administration has no answer to the housing crisis other than to offer a warmed-up version of the Diverse Metropolis Settlement and the 12,000-unit strategy, which will continue this year after a dismal failure.
In the realm of public safety, the picture is equally bleak: only 60 of the promised 250 police officers will be hired and funding for the body camera program is now a major concern, according to the mayor herself. Nor can the city afford to maintain services as crucial as those offered by the neighborhood police stations.
The situation is also critical at the Société de transport de Montréal, which will have to continue making cuts in 2022 despite the $48 million in the cuts made last year.
“Budget 2022 is the result of the previous four budgets and may well be the tipping point for a much more unpleasant change for Montrealers, either higher taxes or lower services,” Salem concluded.
In this context, the councilors of Ensemble Montréal will vote against the adoption of the 2022 budget and the ten-year capital expenditure program (PDI) 2022-2031 during a special council meeting scheduled for January 20. Their main criticisms will be published in a minority report to be submitted to the Finance Committee: https://bit.ly/3ruX2q0
Although the budget and the PDI are adopted without the support of the official opposition, our party wishes to optimize the budget of the administration. With this in mind, the Official Opposition will table three amendments to correct several elements identified in the administration’s proposals:
- To add $250,000 to the budget of the Court of Auditors General to allow him to complete a audit of the pre-electoral report on public finances, and that the administration provide this amount on a recurring basis for the years to come;
- Create an investment project for the construction of a sports center of the borough of Montreal-North in the PDI 2022-2031, and to allocate $5 million in 2022, $15 million in 2023, $20 million in 2024, $20 million in 2025, and $17 million in 2026;
- To create a COVID-19[female[feminine Appropriations for contingent expenses budget item under common expenses in the 2022 municipal budget and allocate $25 million to her.
SOURCE City of Montreal – Official Opposition at Montreal City Hall
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