User fees for water and garbage pickup, Montreal advisors recommend

If Montreal wants to cut commercial propertytaxes, a working group is recommendingthe cityintroduceuserfees for water consumption and garbage pickup in order to compensate for lost revenue.

The group, created by city hall inFebruary,was tasked with finding ways to reduce the fiscal burden on commercial building owners to make the city more attractive for businesses.

But in order to do so, the groupsays the city needs to find sources of revenue other than property taxes. Otherwise it risks running deficits.

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The group citedfigures that show the region of Montreal's economic growth in the last 25 years has been inferior to the average growth of other metropolitan regions in Canada.

Figures also show thatthe number of jobs and businesses is growing faster in other parts of the Montreal region than on the island itself.

Userfees would enable the city to ease the tax burden of business without losing revenue streams, saidthe group's report, which was released on Monday.

More specifically, the reportproposed installing water metres around the city and implementing so-calledpay-as-as-you-throw programs for garbage collection.

Other benefits to user fees

The working group also pointed out that many studies show installing a water meter can reducewater consumption by 15 to 20 per cent in the first year.

Homeowners who use less water than a certain threshold would, moreover, receive credits, if the recommendation is implemented as proposed.

The city said it will look into differentenvironmentallyorientedtaxation measures. But it refused tosay whether user fees for water consumption and garbagecollectionwould be part of those measures.

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The pay-as-you-use systems were among several recommendations made by the group for improving the Montreal business climate. Others include:

• Simplifying administrative processes to make business development easier on entrepreneurs.
• Slowing down the growth of the fiscal burden carried by non-residential building owners versus residential building owners.
• Fixing urban infrastructure.
• Developing support measures for business owners affected by infrastructure work.

Mayor Denis Coderre welcomed the group's recommendations, saying a number of them will be taken into consideration,including bringing in a program to help business owners in construction zones.

A $355-million water meter contract, the biggest ever awarded by the city, was cancelled in September 2009after Frank Zampino, former president of Montreal's executive committee, admittedhe spent holidays on a boat with Tony Accurso, an entrepreneur who was part of the consortium who won the contract.

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