Saturday, August 23, 2025

City of Montreal Urges Provincial Government to Allow Operating Deficit

Montreal has recently issued a report regarding some of the implications the city has faced as a result of the coronavirus pandemic, as well as a list of solutions for consideration by the provincial and federal governments.

The coronavirus pandemic has hit Montreal particularly hard, reducing its operating budget by $500 million. The city has been struggling with sudden and significant decrease in revenue resulting from a drop in public transit use, allocating additional expenses to the homeless, as well as a delays in property taxes. As such, Montreal’s resources have been greatly depleted, and in order for the city to continue recovery efforts, it will need additional help from the provincial as well as the federal government.

Typically, cities are not permitted to run operating deficits; however, given that Montreal became the epicenter of the coronavirus pandemic, which resulted in at least 3,000 deaths, the city is asking for an exception. Furthermore, Montreal is also considering issuing bonds as a means of increasing incoming revenue, in addition to lowering taxes in the areas of the city dis-proportionally affected by the virus.

Also in the report, experts make the argument for higher levels of government contributing financial support in order to keep the city from making cuts to public services. A municipal government lobby group has called on the federal government to provide a minimum of $10 billion in emergency funding for cities and towns dealing with unprecedented hardships stemming from the coronavirus pandemic. In response, Prime Minister Justin Trudeau has advanced billions of dollars from the Gasoline Tax Fund as a means of quickly providing much-needed financial assistance.

The City of Montreal’s budget for 2020.

Information for this briefing was found via Bloomberg and the Montreal Gazette. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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