What are municipal and school taxes for?

Municipal and school taxes contribute to the smooth running and development of our towns and communities. These are direct financial contributions to support a wide range of essential services. Without these resources, it would be difficult to ensure the well-being and prosperity of our neighborhoods, let alone provide quality educational opportunities for our children and future generations.

Municipal and school taxes contribute to the smooth running and development of our towns and communities. These are direct financial contributions to support a wide range of essential services.

They contribute to the financing of :

infrastructure maintenance,
public safety,
transportation,
and, of course, education.

Without these resources, it would be difficult to ensure the well-being and prosperity of our neighborhoods, let alone provide quality educational opportunities for our children and future generations.

Municipal taxes: a financial pillar of our communities

Municipal taxes account for a significant share of the financing of local public services. In particular, they are indispensable in the budget dedicated to supporting and improving infrastructures, essential services and the general well-being of citizens.

Definition and composition of municipal taxes

Municipal taxes are financial levies imposed by municipalities on property owners. The principle behind this type of taxation is to finance services and public spending at local level.

Each municipality calculates these taxes on the basis of property values and criteria determined by the local authorities. Municipal taxes are calculated annually on January 1 of year N.

Payment is made in one or three instalments, depending on the amount to be paid.

Allocation of funds from municipal taxes

Municipal tax revenues are allocated to various sectors and public services. These resources contribute to financing :

road maintenance,
parks,
public buildings,
and waste collection,
public safety,
urban planning,
and other local initiatives.
What’s more, a significant proportion of these funds is earmarked for local transport and cultural activities.

Examples of projects financed by municipal taxes

Two examples to highlight the direct impact of municipal taxes on infrastructure and utility projects.

Infrastructure

Funds from municipal taxes have been invested in modernizing water and sewer systems in Quebec. They have been used to improve the efficiency of water infrastructures and ensure a quality supply of drinking water and sustainable wastewater management. These initiatives have helped optimize the city’s environmental footprint while guaranteeing reliable essential services for its residents.

Utilities

In Laval, a portion of municipal taxes has been earmarked for the expansion of public transit services. This has led to an increase in the number of bus routes, improved transport infrastructure, and the introduction of preferential fares for certain groups of citizens. These investments have helped to strengthen regional connectivity, reduce traffic congestion and promote sustainable modes of travel within the community.

School taxes: a vital element in financing education

School taxes are administered by the school boards in each province. Their role ranges from the equitable distribution of funds to the direct impact on the quality of school infrastructure and the education provided.

Explanation of school taxes and their role in financing education

School taxes, collected at local level, represent a major source of funding for educational establishments. They are intended to provide financial support for schools’ operational needs. This includes :

remuneration of administrative staff
maintenance of school infrastructures,
acquisition of teaching materials
and a portion of school transport costs.

Distribution of school tax funds

Funds raised within a given school district are reinvested directly into that same educational community. This approach fosters more transparent management and decision-making rooted in the specific realities of each geographical area. What’s more, this proximity between taxpayers and the beneficiaries of school taxes enables greater ownership of local educational issues and encourages citizen involvement in the education funding process.

Impact of school taxes on the quality of education and school infrastructure

The contribution of school taxation to the quality of education can be seen at several levels. First and foremost, these financial resources help maintain safe, modern school infrastructures that are conducive to learning. In addition, school tax funds can be allocated to innovative educational initiatives, stimulating extracurricular programs, and enriching cultural and sporting activities.

Comparing the two types of tax

A comparison of the two types of tax – municipal and school taxes – reveals both similarities and significant differences.

Similarities and differences between municipal and school taxes

Municipal and school taxes share certain similarities in their nature as financial levies imposed on citizens. However, they differ in their objectives and operating methods.

Similarities

Both types of tax are local taxes levied directly on residents. They are intended to finance essential community services. What’s more, both types of tax are calculated according to the value of the taxpayer’s real estate.

The differences

Municipal taxes are primarily intended to support local development projects and operations. School taxes, on the other hand, are specifically earmarked to finance local education systems.

Analysis of impact on taxpayers and the community

As taxpayers, residents bear the financial burden of these taxes, which has a direct impact on their personal finances. Fluctuations in the amount of these taxes can influence taxpayers’ ability to maintain their property, as well as their overall quality of life.

The impact on the community is also palpable. Well-maintained infrastructure thanks to municipal taxes helps create attractive, safe neighborhoods, which can have a positive impact on property values and residents’ well-being. Similarly, adequate funding of schools through school taxes ensures quality education for the community’s children (the envy of many countries around the world), which in turn can foster long-term economic and social prosperity.

How to calculate municipal taxes

The calculation of the municipal tax depends on several variables. First of all, the tax rate varies from one municipality to another, and is set each year according to the municipality’s budget and financial needs. What’s more, the tax rate varies depending on the type of property you own, whether it’s a residence, farm, commercial or industrial property, serviced vacant land or a residential building with six or more units. In addition, each municipality may add additional fixed charges, as required, to cover various services such as :

organic and recyclable waste management,
wastewater treatment, etc.

Although various factors may influence the calculation process, the basic formula remains constant.

Here’s an overview:

(local residential or commercial rate ÷ 100 x market value of your property) + your municipality’s fixed charges.

How to calculate school taxes

The school tax assessment method follows principles similar to those of the municipal tax. It is based on the current rate and the market value of your property. Note that you benefit from a $25,000 abatement applicable to the property value of your property at the time of calculation. As for the current rate, since Bill 3 was passed in 2020, it has been standardized across all Quebec provinces.

For 2024, it is set at 0.09730.

The formula used to calculate the school tax is as follows:

(property value – $25,000) x 0.09730 ÷ 100.

Controversy and frequently asked questions about municipal and school taxes

Taxpayers legitimately have specific concerns about municipal and school taxes. They seek to understand the distribution of funds, exemption options, payment deadlines, and the steps to take in the event of disagreement.

By adopting a proactive approach, tax authorities can establish an open dialogue with taxpayers, clarify the underlying reasons for these controversies, and clearly state the measures taken to ensure responsible tax management. This enhances the transparency of the tax process and establishes a climate of trust within the community.

Recognizing the importance of municipal and school taxes is important to the well-being of the community as a whole. These funds play an essential role in supporting local infrastructure, educational services and the development of each region. To encourage constructive dialogue between local authorities and taxpayers, it may be necessary to promote a better understanding of the use of the sums provided by the two taxations. Greater transparency and open communication will strengthen mutual trust and ensure responsible fiscal management that benefits all citizens.