Montreal overcharging a ‘compensation’ tax to tax-exempt shelters, transitional housing

The city of Montreal appears to be overcharging non-profit organizations that provide shelter to the poor through a special “compensation” tax on their buildings despite having a provincial exemption from paying municipal taxes because of the services they provide. The CMQ is the provincial body that determines whether a building qualifies for tax exemption under Quebec’s Act Respecting Municipal Taxation. The law has narrow criteria regarding exemptions. For example, buildings owned by non-profits with transitional — meaning temporary — housing qualify. But permanent non-profit housing, even for low-income Quebecers, doesn’t qualify.

However, the Act Respecting Municipal Taxation allows municipalities to charge tax-exempt building owners a “compensation” to make up for not paying property taxes that help pay for garbage collection and other municipal services. It’s just that most Quebec municipalities seem to choose not to levy the compensation on their tax-exempt non-profits. The Old Brewery Mission, for example, is paying Montreal about $125,000 in compensation tax on its eight buildings this year, said James Hughes, its president and CEO. Two of its buildings offer emergency services and the other six provide transitional accommodations to help people get off the street and eventually into permanent housing.