An independent Manitoba think tank has named Montreal the most-indebted city in Canada.
Winnipeg-based Frontier Centre for Public Policy released its inaugural Local Government Performance Index: A Financial Analysis of 30 Canadian Cities yesterday, which found Montreal’s financial liabilities are more than three times the national average.
The 69-page report, made public on the eve of the city’s 2008 budget, noted Montreal’s net indebtedness (financial assets minus financial liabilities) at $8,388 per household is considered to be high internationally at half that level.
“It’s pretty clear the gap is that much,” index co-author Larry Mitchell told The Gazette from Winnipeg.
Acknowledging the decade-old non-profit and non-partisan organization didn’t have all the valid data necessary throughout the analysis because of the lack of some accounting disclosures – Mitchell pointed to Montreal as one of the poorer participants – he said there was still enough information to show “that’s the situation.”
Centre founding president Peter Holle also conceded that all the information is from 2005.
Jacques Marleau, the city’s interim director of finances, said it has been long known that Quebec municipalities have higher debt ratios than their counterparts outside the province.
“It’s delicate to compare Quebec cities with those in the rest of the country,” he cautioned.
For one thing, Marleau said most residential development and infrastructure in Quebec is paid for by the municipalities rather than developers and homebuyers like elsewhere.
Despite the high debt, he stressed Montreal maintains a good credit rating.
Moody’s Investors Service raised the city’s rating from A2 to A1 in 2005, then increased it again last year to Aa2, the second-highest level.
The index also showed that 2005 Montreal property taxes at $3,622 were 73 per cent above the group average of $2,086, while taxation revenue was much higher at 76 per cent of total city revenue compared with the large group average proportion of 56 per cent.
The findings also put Longueuil residents paying the highest taxes among the small cities in the study.
Laval, Sherbrooke, Quebec City and Gatineau were the other Quebec municipalities examined.
The centre and Montreal Economic Institute are co-hosting a round-table seminar tomorrow for policy experts on developing objective performance comparisons in Canadian local government. The free event is scheduled to take place at the University Club of Montreal from 2 to 3:30 p.m. (Those interested must pre-register by calling 514-273-0969, Local 2232, or by email at email@example.com.)