MONTREAL -- Montreal will freeze property taxes for homeowners and businesses in 2021, Mayor Valerie Plante said Thursday, in a press conference where she laid out the city’s difficult financial position.

The freeze will amount to a $56-million reprieve for taxpayers, just as certain sectors of the economy are once again forced to shutter.

“We’re making sure $56 million stays in Montrealers’ pockets,” Plante said, acknowledging that the decision will impact the city’s 2021 budget.

“Unfortunately, (the pandemic) is not over, so we are trying to give (Montrealers) a break with this tax freeze,” she said.

Mayor Plante also committed to more aid for bars, restaurants, and the cultural sector, to compliment the aid package promised by the provincial government, when it first announced the 28-day shut down.

Groups representing taxpayers were quick to applaud the decision.

“This tax freeze will help give a bit of breathing room to residents and shopkeepers who have been hard hit by the financial impacts of COVID-19,” said Renaud Brossard, Quebec Director of the Canadian Taxpayers Federation. “It might not have been an easy choice for the administration, but it is the right choice.”

Still, the city has to do more to help downtown businesses, according to Michel Leblanc, president of the Montreal Chamber of Commerce.

“From a business standpoint, right now, the pressure is immense,” Leblanc said. “Everything that can be done to reduce uncertainty is welcome.”

The City of Montreal is facing an estimated budget deficit of between $109 million and $129 million for 2020.

The deficit was expected to be much higher, but due to spending cuts implemented in April, the city was able to save $123 million dollars, according to Plante.

“We knew there would be extra spending (to come), and we were right,” she said. 

But, the official opposition questioned that savings figure, noting the council has not yet seen a line-by-line account of the city’s finances.

“We don’t trust them, Montrealers shouldn’t trust them, and I really think they are taking Montrealers for fools if on the one hand they can promise a tax freeze and on the other hand announce a deficit for the budget,” said Lionel Perez, leader of Ensemble Montreal. “They just can’t have it both ways.” 

The city will present a full fiscal update at the next council meeting, on Oct. 19.

“We estimate the direct expenses related to COVID-19 at $85 million, for the present year,” said Benoit Dorais, chairman of the Montreal executive committee. “These various expenses include protective measures to ensure services to the population, as well as unprecedented support for the most vulnerable people.”

This spending, plus revenue losses in three major areas, make up the bulk of the city’s deficit, according to Dorais, who spoke alongside the mayor on Thursday.

The city is reporting a tax revenue loss of $80 million, mostly due to major real estate projects that were put on hold during the pandemic; a $27-$30-million loss in revenue from parking meters; and a $73 million shortfall in parking tickets because of a large decrease in traffic during the pandemic. 

The full financial report for 2020 will be available, as usual, in the spring. Until then, Dorais said the city will look for the best approach to pay for the deficit.

“The city has several options,” he said, listing government assistance from the province, announced last Friday; dipping into surplus reserves, accumulated over the past three years; additional expenditure cuts; and short-term loans.

“These solutions will be presented to you in due time, but one thing that is certain, there is no question of us simply putting the entire shortfall on a credit card,” Dorais said.

But, “The devil is in the details,” insisted Lionel Perez, in an interview with CTV News, where he accused the mayor of playing politics with the city’s finances.

“Everybody likes to get good news, but when you announce a tax freeze and at the same time you announce that you’re going to have a $110 million deficit, you have to explain how you’re going to cover that deficit,” he said.

“For us, this announcement of a tax freeze is nothing more than a nice cherry in a pre-electoral year, to avoid having to make some difficult decisions,” Perez said, insisting Montrealers will end up paying for the deficit one way or another.