December 13, 2000

A strong Montreal could boost business climate

For small business owners, municipal mergers mostly boil down to one question: how will it affect my taxes? In that respect, local opposition to Quebec Premier Lucien Bouchard's Montreal mega-city plan, is no different to similar movements in other provinces.

But the Montreal merger has the potential to cast a mortal blow to the independence movement, a movement that has caused untold devastation to local businesses for the past three decades. A strong Montreal Island administration would increase political stability, and the result could more than compensate for any resulting tax increases.

Everything in Quebec politics is somehow tied into Lucien Bouchard's goal of lining up the winning conditions necessary to achieve sovereignty. That means when evaluating Bill 170, which would group the Montreal Island's 28 municipalities into one mega-city, his opponents should do the same.

True, the tax issue should not be dismissed lightly. Business owners treat Bouchard's claims that 86 per cent of Montreal Island taxpayers will see their taxes decline, with great skepticism.

Indeed many have good reason to be concerned. For example according to Peter Yeomans, mayor of one of the municipalities affected, "business taxes for Dorval companies could eventually rise 30 to 40 per cent."

Even though Municipal Affairs Minister Louise Harel has promised to limit annual property tax increases to 5 per cent, it's still enough to give Dorval companies the shivers. But not all businesses are located in suburban communities with strong tax bases like Dorval. Those in Montreal itself could eventually see some tax relief through a re-balancing of municipal expenses throughout the island.

Bill 170's many opponents have not adequately assessed the tremendous risks that Bouchard is taking with his merger plan. "We shall either hang together, or we shall hang separately," goes an old expression from the American Revolution. And the Quebec government has been hanging Montreal municipalities separately for decades.

For one, the Montreal Island is substantially under represented in the provincial National Assembly. Like most other provinces, Quebec rural ridings - which are heavily francophone and sovereignist-encompass fewer voters than urban areas. The net effect is to heavily blunt Montreal's voice in legislative matters. Thus old economy issues -which are more important to the regions - tend to dominate over new economy ones - more important to the island.

Under-representation in Quebec City would not be so bad if there was an elected official - with the stature of a regional office -- to speak out for the Montreal's interests. But there is no such person, and it has been easy for succeeding provincial governments to ignore the island's the 28 "mini-mayors."

There are indications that an island wide administration would be better run than the City of Montreal is now. Currently, the vast majority of voters in the city are tenants - far more so than in many other Canadian cities. Tenants don't pay municipal taxes, so they are liable to vote for lax municipal administrations. But many of the new suburbs being integrated have a higher proportion of property owners who -- because they have a financial interest in the outcome -- tend to vote in greater proportions.

For example, in a glaring example of insensitivity, the provincial government does not allow Montreal to lay off excess workers. The Bourque administration is thus burdened with employees hired by a spendthrift Doré administration in the 1980s. The fact that they can't be laid off has given workers bargaining power, and lucrative contracts have resulted.

Some have said that these contracts will be extended to all island workers. Even if this happens, it won't last long. Existing Montreal voters have put up with these provincial restrictions because most don't pay the taxes that fund this excess. Businesses have no voice in the process since although a business pays taxes, a business does not vote.

Growing recognition of this problem, by an expanding base of Montreal taxpayers should lead to pressure on the provincial government to end the emasculation of municipal powers to lay off employees.

Further exacerbating insensitivity to the island's needs, a relatively small provincial capital -- Quebec City-- is located far from the massive population center of greater Montreal. Bureaucrats, predominantly white francophones, are thus often isolated from the city's rich multicultural reality.

Demographics are exacerbating this trend. Although the vast majority of Montrealers speak French, the island encompasses most of the province's anglophones and recent-immigrant allophones. Indeed, due to new immigrants some have predicted that "pure laine" francophones could be in the minority on the island within a couple of decades.

The fact that fewer white francophones identify with the multi-cultural, multi-lingual island life, is a factor in what is now the key provincial dynamic: a growing urban/rural schism-especially evident in the diverging needs of on, and off island residents.

One result of the concentration of Anglophones and Allophones is that the island of Montreal is strongly federalist. In the last two provincial elections, the Liberals have out-polled the Parti Québécois in a proportion approaching 2:1 on the island. This means if provincial parties get involved in municipal elections, as some have suggested, a federalist administration will likely result. This would be a considerable roadblock to any provincial unilateral secession attempt.

In fact, an island-wide city could be a significant boost to the partition movement, by countering its opponent's two main arguments: that federalists don't occupy a contiguous territory, and that Quebec nationalism is not ethnic based.

Should talk of sovereignty heat up again, -- with an island wide administration -- few will fail to notice, that sovereignty's appeal is confined to unilingual, white francophones living off the island, with multicultural, multi-lingual Montrealers remaining federalist. This would be a mortal blow to sovereignists who see themselves as tolerant internationalists.

The result of this island wide check to the sovereignty movement could be a considerable boost to business, because no sector of the Quebec economy has been as ravaged by the uncertainty and postponed investments resulting from sovereignty talk, as Montreal businesses.

With its enormous assets, fabulous geography and good quality of life, Montreal has the potential to be a big winner in a worldwide movement, which is seeing powers devolve from national and regional levels to individual cities. In an era of freer movement of trade and labour, cities matter more.

There are weaknesses to the Montreal merger plan. The new administration will still not have all the power it needs to do its job. But with a new, stronger, Montreal mayor, there will finally be an elected official with the clout to stand up and ask for those powers. Finally, there will be someone to speak for Montreal against the dominance and insensitivity of Quebec City.

That will benefit Montreal businesses far more, than tax increases that may occur in the short term.

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