COVID-19: Montréal announces a financial plan to offset the impacts of the current pandemic
23 avril 2020
Montréal, le 23 avril 2020 - In an effort to manage public funds responsibly, Montréal is acting proactively by laying the groundwork for a financial plan meant to offset the impacts of the global COVID-19 pandemic. This will contribute towards balanced financial results for this year.
“Since taking office, we have always maintained a responsible and controlled management of public funds. However, the current context has brought quite a few challenges for our metropolis, as our sources of income have been significantly reduced. The financial plan we are presenting represents a major effort on our part to limit the impact of the pandemic on the city's finances. We acknowledge the efforts of our entire population, as every citizen does their part to overcome these difficult times, and today's announcement is yet another step in towards this collective effort. Since the very beginning of the current health crisis, we have made it clear that we do not intend to pass the costs on to Montrealers, who are already burdened by the situation”, stated Mayor Valérie Plante.
“Budget surpluses generated over the past few years reflect the control and prudence with which we have been handling public funds. This sound management enables us to take swift action today in order to limit the negative impacts of the health crisis, not only for the city's finances, but also for our population”, added Benoit Dorais, chair of the executive committee, in charge of finances, human resources, legal affairs and property assessment.
The city is expecting significant losses in revenue, with an optimistic estimate of $93 M in lost revenues, and a pessimistic estimate of up $281.3 M. These revenues are usually generated through transfer taxes collected, permits issued, as well as administrative fees from sports and cultural facilities, for instance. Current scenarios are still only hypothetical, and will likely become clearer over the next few months, when the real impact of the current crisis will be known.
The administration of Montréal is rolling out a general plan to cut expenditures through 13 currently implemented temporary control measures meant to yield total savings of $123.4 M. This plan namely involves a global reduction of 3.1% of the budgets allocated to the city's administrative departments and boroughs and a $9 M contingency spending freeze.
However, the metropolis will not be able to absorb by itself the entire financial impact of the pandemic, and the significant decline in ARTM ridership, which may result in a loss totalling between $154 M and $244 M for the urban agglomeration of Montréal. These losses are added to lost revenues and to additional expenses that vary, depending on the scenario, between $105 M and $294 M. In this regard, the city is requesting financial support from the different levels of government and is currently assessing various additional potential solutions.
Thus, the anticipated effect of the COVID-19 crisis on city finances may total between $258.9 M and $538.5 M, when factoring in the impacts on the city's budget, along with the anticipated loss in ARTM revenues.
“Since the beginning, we have taken concrete initiatives to support Montrealers. We continue to do so, this time by rolling out a financial plan that will contribute to balancing the budget of our metropolis for this year. Together, we will get through this crisis,” concluded Benoit Dorais.