Will Montreal Parking Tax Promote Redevelopment or Relocation?

A special tax introduced in 2010 on all non-residential parking lots in downtown Montreal was "quitely" doubled on surface parking lots in the city’s November 2012 budget, reports Allison Lampert. According to city spokesperson Darren Becker, the targeted rate hike is intended to “get rid of the [outdoor] lots to promote residential development."

"The higher parking taxes come at a time when Montreal property owners are already facing rising municipal tax bills because of soaring land values," notes Lampert. "Rising taxes, combined with the housing boom fuelled by low interest rates, have prompted several owners like Modico to sell off their well-located parking lots to condo developers."

"The city of Montreal has been encouraging this trend, by changing zoning to allow for the development of taller buildings, which favours more dense residential development and public transit use."

"But higher taxes on parking lots could become an additional cost of doing business that could drive more Montreal companies out to the suburbs, some commercial real estate experts warn."

“Companies are going to have to take this cost into account when they are renewing their leases, or deciding to move downtown,” said Andrew Maravita, managing director of Colliers’s Montreal bureau in an October interview.

The city, however, isn't concerned.

“There have been some increases, but we don’t think it’s going to chase anyone (companies) out to the South Shore,” said Becker. “It’s up to the owners to decide whether to raise prices.”