Roger-Luc Chayer (Image : AI generated / Gay Globe)
For several years now, we’ve been living in Montreal under the administration of Mayor Valérie Plante and, let’s face it, the results are far from positive. We witness every day the decline of Quebec’s metropolis, once much cleaner, healthier, and more prosperous. More and more Montrealers are raising serious questions about their administration’s ability to effectively manage a city of this scale — and about the competence of their mayor.
Constantly blocked streets, endless orange cones, homelessness, poverty, filth, lack of maintenance, and economic hardship driven by wasteful spending are troubling and shocking to many Quebecers. They see their flagship city slipping into a state they can no longer take pride in.
Do you remember Montreal’s slogan from the 1990s: “Pride has a city: Montreal”? It’s been a long time since we last heard that.
Montreal’s Finances: A Shocking and Troubling State
One of the great mysteries of Montreal politics is how elected officials seem to juggle a massive budget deficit while spending more than ever on projects that are neither vital nor urgent. Personally, I’ve always wondered how a city like Montreal can pour so much money into bike lanes, roadwork that needs to be redone every two or three years, or non-essential infrastructure — when that money doesn’t really exist and Montrealers are already drowning under the weight of municipal taxes.
Part of the answer lies in an article published by our colleagues at La Métropole, written by Mr. Alain Clavet and dated October 11. This piece, clearly the result of a rigorous investigation, lays out in detail the current financial situation of the City of Montreal and justifies the title of our own text.
We thank Mr. Clavet, who generously authorized Gay Globe to reproduce his article here, titled: “Montreal Bankrupt by 2027: A Crisis Foretold!” The original article can be found at the following link:
https://lametropole.com/2024/10/11/montreal-en-faillite-en-2027-une-crise-annoncee/
Here is the full article.
The City of Montreal is facing an imminent financial crisis that could lead it to bankruptcy by 2027 — the year when the special exemption allowing the city to exceed its legal debt limits is set to expire.
The Cities and Towns Act, along with Quebec’s Financial Administration Act, requires municipalities to adopt balanced budgets. However, an exemption granted in 2017 by former Premier Philippe Couillard allowed Montreal to take on debt up to 120% of its budget. This decision was intended to offer some fiscal flexibility but came with strict conditions — conditions that have not been respected.
Since Valérie Plante took office as mayor in November 2017, the city’s expenses have skyrocketed, driven by the creation of new positions and administrative structures, as well as by infrastructure projects with poorly controlled costs. Between 2017 and 2023, the city’s debt rose from $5.6 billion to $7 billion — an increase of nearly 25%.
Tables 76 and 77 of the City of Montreal’s 2024 budget illustrate this alarming trajectory. With rising debt and ongoing increases in municipal taxes (over 4% since 2022 and up to 30% in certain neighbourhoods since 2017), the city finds itself at a dead end. The 2017 exemption was intended to allow for a gradual reduction of the deficit, but the Plante administration used up all the leeway granted by this exception without a real plan to return to a balanced budget.
The law requires Montreal to restore a balanced budget by 2027, but without structural reforms and strict expense management, that objective seems out of reach. Drastic spending cuts, rationalization of public services, and the privatization of certain sectors will be necessary to avoid the worst. Without these measures, the end of the exemption will plunge the city into a major financial crisis, with a deficit exceeding 20% of the budget — not to mention the nearly $4 billion deficit of the Société de transport de Montréal and the $500 million paid in cash for capital expenditures!
Montreal is speeding toward a wall! (It is worth noting that the City has yet to respond to the article published by our colleagues at La Métropole since its release.)
Plausible factual elements from La Métropole’s article:
True: The Couillard government granted Montreal increased borrowing powers (up to 120% of its budget) via a legislative amendment. This exemption was supposed to be temporary (10 years, thus until 2027).
According to the City’s budget documents, the debt has indeed increased: it went from approximately $5.6 billion in 2017 to over $7 billion today, including the STM’s debt.
True: The City has created numerous positions since 2017, particularly in areas related to social services, sustainable development, and active transportation. Critics point to concerns about efficiency and the multiplication of administrative departments.
End of the exemption in 2027 = real budget constraint:
Yes. The City will once again have to comply with standard debt ratios and may have to adjust its spending if it fails to control its current trajectory.
Could the City of Montreal actually go bankrupt?
The short answer is no. One can certainly speak of moral or economic bankruptcy, but a legal bankruptcy of the City, in the sense of federal bad debt legislation, seems impossible. Indeed, municipalities in Quebec are creations of the provincial government, which guarantees their operations.
In the event of serious financial trouble, the Government of Quebec could intervene, as it has done in other cities, such as Laval or Longueuil in the past. For now, Montreal has implemented certain spending control measures, although many observers consider them insufficient. The City is also trying to generate new revenue (green taxes, royalties, agreements with Quebec), but given the magnitude of the current debt, it seems highly unlikely that it can be resolved within the next two years.
Let us collectively hope for the best, because if the City defaults on its debt, not only will its credit rating take a hit — resulting in higher interest rates — but it is Montrealers and Montreal-based businesses who will ultimately pay the price, with property tax hikes that could reach 50 to 75%. And no one wants that.
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