Montreal Mayor Gerald Tremblay was playing peacemaker Thursday between the Plateau Mont-Royal borough and Plateau merchants opposed to a planned increase in parking meter rates.

Tremblay held separate meetings Thursday with borough mayor Luc Ferrandez of the opposition Projet Montreal party and the Plateau merchants in an attempt to find some common ground in the dispute, which rests on the borough's plan to draw new revenue by installing nearly 1,000 new parking meters and raising rates from $2 to $3 an hour.

The borough would have been permitted to do this because of Tremblay's pledge to transfer control of parking meters to the boroughs from the central city, but he froze that transfer after the merchants' outrage to these changes.

Ferrandez says that if the parking rate increase is held up, the borough may be forced to increase residential taxes by about $100 per year and to institute a new tax on merchants of about $500 or $600 per year.

The borough says it needs the new revenue to make improvements and fund new projects that will benefit its residents, and raising the parking rates was a way of doing that without overly penalizing the local population.

Obviously, the merchants want no part of the new taxes, either.

Currently the boroughs receive 50 per cent of the parking revenue on residential streets, and Tremblay is exploring the option of making that a 100 per cent cut.

"It appears to me fair that if a borough takes a political risk to increase the revenues at a local level, I think that they should be entitled to 100 per cent of those revenues," Tremblay told reporters Thursday. "So those are part of the discussions that we're having today."

The merchants protested Monday night outside city council to voice their displeasure over the borough's intended rate hikes, and they plan to do so again on Dec. 6.