After years of tax exemptions, the religious communities in the City of Montreal are facing big tax bills. It has recently come to light that once exempt institutions like the Cote des Neiges Presbyterian Church are receiving tax bills from the City. Inspectors from the City of Montreal are now visiting churches more regularly, taking pictures and noting how every space in the church is used.
Municipal property inspections are nothing new. It’s how the City of Montreal assesses how to tax you and for how much. Religious institutions, however, are the exception.
According to the Quebec Act Respecting Municipal Taxation, a property “in the name of a religious institution… used by it or gratuitously by another religious institution… not to derive income but in the immediate pursuit of the religious or charitable objects” is exempt from all municipal or school property taxes. That means that as long as a given space is owned by a religious institution and is used exclusively for worship or other religious ends, it is considered to be exempt from property taxes.
The problem is that many religious institutions in Montreal don’t use their property exclusively for worship, hosting vital community organizations in available spaces within their buildings. The tax bills and increased inspections likely mean that the City is interpreting the law more strictly so that they can tax houses of worship for the spaces they don’t use for religious services and prayer.
The City of Montreal claims that they are simply trying to prevent people from defrauding the system, but not everyone agrees.
M, an expert on municipal assessments and taxation, said that they’re doing it because it will result in tax revenue from sources that weren’t providing any tax revenue before.
I asked M what the municipal assessors would be looking for when deciding how much to tax a religious institution.
“Proof that there are parts of a church that aren’t being used for worship,” he replied.
A room used for worship is tax exempt, a room used for anything else would hypothetically be subject to taxation.
I asked M if the City could tax some parts of a house of worship while exempting other parts of the same building from taxation.
“They can split the assessment, and they do. I’ve seen it before. They can send a bill that indicates the taxable portion and the non-taxable portion,” he said.
That begs the question as to whether facilities that while not used exclusively for worship, would be considered an essential part of any building, let alone a church. Though people rarely worship while on the toilet, for example, it should be considered an essential part of any space’s facilities and subject to any exemptions tied to a given space.
Though some have praised the City’s move to start taxing religious institutions as an assertion of the separation of church and state and a break for taxpayers, there is reason to believe the move will come at the expense of community organizations.
NDG City Councilor Peter McQueen points out that important community groups in NDG such as Alcoholics Anonymous, Narcotics Anonymous, the Boy Scouts and Girl Guides, as well as the NDG Food Depot and the NDG Community Council rely on the City’s churches to provide spaces for them to meet. He explained that this is because historically the churches were involved in charity work separate from the state.
I asked McQueen how he felt these groups would be affected by the new taxation rules.
“Terrible! I mean, if these groups had to leave the churches they’d be in a major quandary here in NDG.”
He said that if these groups had to find other places to meet, the City would have to step up and meet the demand. Currently in Cote des Neiges and NDG most community spaces are used for sports or borough offices. Houses of worship have until now been filling the need for spaces for these community groups to meet, but that may change with the new taxation rules.
At the end of the day, the issue comes down to one of money.
Will this move by the City of Montreal make the City more money, or cost it money in the long run?
Peter McQueen thinks it will end up costing the City, as it will have to step up to meet the demand for community meeting spaces that had previously been filled by the churches.
M thinks the City may choose to simply not fill that need, which would come at the expense of the community that relies on these groups to help the needy and provide safe activities for their children.
There is the additional risk that some congregations may fold altogether under the new taxation rules, as their dwindling flocks and basic expenses put houses of worship in the red before they ever see a tax bill. They can always contest the tax assessments in court, and there will likely be legal challenges if there are enough tax dollars involved.
At the end of the day, it will be the community that pays for this.