Money for homeless still held back
Mayor Plante criticized the Legault government Monday for turning their backs on the humanitarian crisis of homelessness in Montreal. She also revealed that the funds which had been announced for services to the homeless by the federal government, and matched by Quebec (in theory) to the total of $100 million, have not yet been handed out.
Taylor 21:14 on 2025-01-27 Permalink
The city can’t borrow money to spend on this problem given the promised funds?
They can’t take that promise to literally any of the major banks in our city?
Would anyone be *that* upset if Plante increased the debt/deficit by addressing homelessness in more constructive ways?
Kate 22:29 on 2025-01-27 Permalink
Can a city borrow on that basis? Political promises are subject to change, sometimes unpredictably. Quebec was never keen on accepting Ottawa’s $50M for the homeless, and even though a deal was finally reached, there must still be obstacles. Would a canny banker accept this promise as collateral?
Taylor 22:56 on 2025-01-27 Permalink
Fair, but even still – I can’t quite figure what’s stopping Plante from going to the banks and saying “we need money to start solving a problem that’s negatively impacting everyone’s quality of life.’
You’d figure the banks would jump on board just because so many unhoused people sleep in bank vestibules, or because the real cost of homelessness is so much higher than the cost of the solutions to fix it.
It’s the city of Montreal, it’s not going anywhere, you’d think the city’s credit would be effectively unlimited.
saintlaurent 10:34 on 2025-01-28 Permalink
>They can’t take that promise to literally any of the major banks in our city?
So you’re saying that even though it is generally accepted that the public at large doesn’t trust elected officials to keep their promises, a banker can comfortably be credulous enough to fork over a few tens of millions of dollars? (“I swear to God, my rich uncle has promised me he’s going to give me a bunch of money next Tuesday!”)
> It’s the city of Montreal, it’s not going anywhere, you’d think the city’s credit would be effectively unlimited.
This only works, to the degree you are implying, when a government can print its own money, and even then, there is an upper bound (that upper bound is defined by factors including, but not limited to, existing debt levels, size of the economy, capacity for additional growth in tax revenue, etc.).
Joey 12:51 on 2025-01-28 Permalink
I was under the impression Quebec municipalities were required to balance budgets. So they can’t just borrow to add an expense without a corresponding budgeted increase in revenue to match the operating and borrowing costs, right? Moreover, if the city could and did borrow to deal with this particular funding gap, it would absolve the feds and the province of their commitment to deliver $100M to Montreal for homelessness. I think you can imagine how that kind of decision would be perceived by the province the next time the city came asking for money.
But also, why would a banker accept that the province would eventually come through with the money when it hasn’t so far – even though it has received the first $50M from Ottawa? Why would a bank believe a promise the province has already broken? And the city isn’t ‘going anywhere’ so it can have unlimited credit? WTF?
Taylor 16:00 on 2025-01-28 Permalink
Then how does Montreal, or any city, overspend? Do we not have a debt and a deficit?
And yes, @joey – not exactly unlimited but I can’t think of any more certain investment than a major city with a stable population of nearly 2 million that’s also steadily growing, a stable middle/upper-middle class tax base, and an economy so diversified we’re borderline recession proof.
My point here is that you would think banks and credit unions – above all others – would be the most inclined to support a city’s efforts to eradicate homelessness as much as extend credit to do so, given how much of their bottom line is potentially impacted by the add-on effects of homelessness (i.e. negative impacts on property values).
saintlaurent 09:33 on 2025-01-29 Permalink
> negative impacts on property values
This presumes that banks are the actual owners of the properties in which their branches are located. I would suggest this is not the case; the owners are commercial landlords from whom the banks lease space via long-term lease agreements. There could be a few notable exceptions; for example, the bank branch at the base of Tour CIBC is probably owned by that bank. But I would wager that the Scotiabank and BMO branches at University and Robert-Bourassa are almost certainly not owned by their respective banks.
Jonathan 10:37 on 2025-01-29 Permalink
Cities in Quebec can borrow for capital expenditures (in their PTIs and PDIs) but not for operating expenses.
Joey 13:12 on 2025-01-29 Permalink
You lost me at banks give a shit about homelessness.
Taylor 18:14 on 2025-01-29 Permalink
@jonathan – so would that mean that city of Montreal would be free to borrow money to immediately begin building new housing for the homeless? Or expropriating an abandoned property and coverting it into housing? No?
@saintlaurent – no, not the branches, I’m thinking of the mortgages held by their customers and their residential property values. Let a homelessness problem get bad enough and properties start losing value. Wouldn’t that increase risk for banks if suddenly people can’t recoup their property investments?
@joey – see above. I’m not saying they have any social responsibility, but they do have a fiduciary responsibility to their shareholders as much as some basic responsibilities to their employees. There are four major financial institutions headquartered in the city in the bankiung sector, all of whom have major downtown real estate (as do all the other banks). You gotta figure homelessness is sapping interest of ‘return to the office’, so all their properties are liabilities. National Bank just built a new tower, they gotta be thinking about how homelessness would lower the quality of life of their commuting workforce, as much as the negative impact on their employees holding mortages on urban properties. It all adds up.
saintlaurent 19:05 on 2025-01-29 Permalink
> would be free to borrow money to immediately begin building new housing for the homeless? Or expropriating an abandoned property and coverting it into housing? No?
Again, this assumes that there isn’t *already* outstanding debt, and that some lender (or prospective bondholder) would breezily just hand over some large sum of money at a rate of interest that is also financially prudent for the city government to accept. I imagine the city could easily go find some lender to give them millions of dollars at 14% interest, but that would almost certainly be a breach of the city officials’ statutory and moral obligations to be good stewards of the public fisc.
Of course, the city could just pledge some collateral, right? I mean, you yourself said the city isn’t going anywhere. Would you want to be the mayor who pledged Parc Lafontaine, or the water purification plant in RDP-PAT as collateral for a loan from RBC or BMO? Or pledged future property tax revenues (which, of course, would be a larger amount than the loan itself, because, interest). And then to maintain existing services and also service that debt, you have to hike tax rates. I can imagine the electorate, in the current climate, would find that prospect somewhat unpalatable.