Montreal Mayor Soraya Martinez Ferrada tabled her administration’s first municipal budget on January 12, presenting a balanced $7.67 billion operating plan for 2026 alongside a $25.9 billion capital program running from 2026 to 2035. The proposal would raise overall spending by roughly 5.3– 5.4 per cent compared to the previous year.
City officials framed the budget as both “rigorous and responsible,” arguing that it was prepared in an “uncertain economic situation” and amid concern about a “possible recession.” Martinez Ferrada has said the administration is aiming to keep tax increases in line with inflation while also emphasizing debt management as a central objective. Under the plan, the city administration says it intends to bring its net-debt-to- revenue ratio back to 100 per cent by the end of 2026, an objective it is tying to the cost of servicing debt and the need to finance long-term infrastructure work laid out in the city’s ten- year capital plan.
Municipal documents also stress that council is limiting the tax burden increase “under its control” to 3.4 per cent for both residential and non-residential properties, a distinction the city uses to separate the central administration’s decisions from borough-level components affecting the final bill. The budget’s capital plan is presented as heavily maintenance- oriented. According to the city’s summary, 67.7 per cent of planned investments over 2026 to 2035 are directed toward protecting existing assets, while 32.3 per cent is allocated toward development. The largest investment envelopes by 2035 are projected to be environment and underground infrastructure, at $8.0 billion, and road infrastructure, at $6.7 billion; figures the administration cites to justify the scale of upkeep and renewal required for aging systems.
Homelessness and housing emerge as the most prominent social commitments in the budget’s early reception, with the administration repeatedly signalling their high priority status. The plan sets aside $29.9 million in 2026 to support community organizations working with people experiencing homelessness and initiatives meant to manage “cohabitation” in public spaces. It also includes a longer-term objective of investing $100 million by 2035 to acquire and renovate buildings intended for emergency shelter spaces. Reported comparisons to previous budgets have framed the 2026 homelessness allocation with a marked increase from earlier years, underscoring a shift toward higher recurring spending in this area.
Housing policy is tied closely to that homelessness strategy. Over the ten-year horizon, the city is committing $578.7 million to acquire buildings for social and affordable housing, including $100 million linked directly to homelessness-related housing needs. The administration is also signalling a change in how it intends to push new housing supply. Rather than maintaining the existing ‘20-20-20’ framework for large developments, requiring equal shares of social, affordable, and family housing or a fine, the city has indicated it wants to move toward ‘financial incentives’ and closer partnerships with developers, non-profits, and private builders. Alongside those broader shifts, the budget includes smaller, targeted measures connected to the rental market, including multi-year funding for tenant-rights organizations and an expansion of preventive building inspections that the city says will reach 1,600 buildings in 2026.
Public safety and emergency services are also highlighted as major budget areas, both because of their size in the operating budget and because of the policy debates they tend to provoke. Public safety is presented as the largest share of expenses at 17.9 per cent. The plan includes funding for police body cameras, expanded use of public-space cameras, and increased spending framedasprevention,particularly youth violence prevention and safety measures around school zones. The budget earmarks $15.8 million in 2026 for reducing youth violence and $17.4 million for securing routes around schools. Furthermore, it sets out a longer- term $40-million, ten-year plan connected to body cameras.
Alongside new spending, the administration has emphasized restraint measures and trade- offs. The city has pointed to $79 million in identified savings, largely framed as the result of reviewing municipal programs, and has indicated that hiring will be frozen in parts of the public service. At the same time, the budget is presented against a background of significant debt servicing costs, with 16.6 per cent of the 2026 budget, about $1.27 billion, allocated toward it. Reported examples of the budget’s constraints include some delayed or reduced projects, such as infrastructure work pushed to later years and a reduction in funding for certain mobility-related services.
The budget has drawn conflicting interpretations among political opponents and stakeholders. The official opposition has criticized the proposal as lacking long-term vision and argued that it “smells like austerity,” disputing the administration’s narrative that it represents a fresh start for the city. Other institutional voices have welcomed the emphasis on “rigour,” particularly the effort to document recurring savings and manage limited fiscal room. In statements responding to the tabling, business groups have also pointed to structural pressures, such as a municipal wage bill nearing $3 billion and upcoming collective bargaining, as ongoing drivers of costs that will shape the city’s ability to expand services without further tax increases.
For residents, including students who largely rent and depend on public transit, the immediate effects of the municipal budget will not necessarily be direct. However, the broader pressures it reflects will be closely connected to everyday affordability. The proposed budget underscores a central tension for Montreal’s finances: large portions of the city’s fiscal capacity are absorbed by maintaining and renewing aging infrastructure, even as the operating plan commits new money to urgent social needs such as homelessness and housing.