Quebec municipalities speaking out against vehicle registration tax

Vehicles enter and exit the Louis-Hippolyte-La Fontaine Tunnel on the south shore of Montreal, Monday, January 2, 2023. (Graham Hughes, The Canadian Press)

Municipalities are criticizing "prohibitive" administrative costs associated with the registration tax intended to finance public transport.

In December, the Quebec government passed a law allowing cities to tax vehicles according to their fuel consumption.

"Municipalities wishing to avail themselves of this power must enter into collection agreements with the Société d'assurance automobile du Québec (SAAQ). However, the administrative costs imposed by the SAAQ are prohibitive," reads the news brief from the Quebec Union of Municipalities (UMQ).

UMQ president Martin Damphousse doesn't understand the rationale behind these fees.

"It's not working, so it's clear that we're going to have to readjust," said the Varennes mayor.

According to Damphousse, it will be very difficult for small municipalities to make money with such fees.

"The implementation costs for MRCs and cities wanting to implement a registration tax in 2025 are $202,202," the brief reads. "To this amount must be added an annual management fee of 2 per cent of the taxes collected, with a floor amount of $60,000. A very large percentage of the revenues generated by a possible tax will be paid in administrative costs, which reduces the real potential of this tool, which must be able to be used everywhere in Quebec."

This report by The Canadian Press was first published in French on April 30, 2024.