Inflation, taxation and creation | The press

It is difficult to imagine when you approach the building.

First there is this brown coating in faded sheet metal, striated by rusty behind the scenes. The incessant roar – and the ugliness – of the neighboring metropolitan motorway. Or this cluster of detritus, next to the front door.

The building located at 3333, boulevard Crémazie is, in the Montreal district of Saint-Michel, is far from inviting at first. But that doesn’t matter to Normand Hamel.

The painter and sculptor multiplies the superlatives by talking to me about the premises he found here three years ago. An extraordinary haven of creation. “Of all the workshops I have had for 40 years, I have never seen a so well appointed space. And I experienced all kinds of business, in Montreal… ”

His workshop is part of a complex inaugurated in 2021 by the artist Marc Séguin, the Angus development company (SDA) and the promoter Huotco. Their project generated a big buzz As soon as it is announced, due to its noble mission: to offer affordable spaces, in the long term, to artists dislodged from other districts.

The site was colossal from start to finish.

It was necessary to expel the last fairly shady tenants of the 3333 – a cannabis plantation, a prostitution room, an illegal sewing manufacture – to renovate the interior from top to bottom. Change the fled windows. Clog the roof. And complete a tight financial editing of $ 16 million, which has left nothing to embellish the external envelope.

Taxes that strike

Word of mouth quickly did its work. The 70 premises of the “3333 workshops”, modern and bright, rented themselves in barely one year. But like a large wheel of real estate that is running, the project was the victim of its success, if I may say so.

The improvements made to the seven -story building exploded its value. The municipal assessment increased from 2.4 to 6.7 million.

The impact was very concrete.

The ART3 land tax notice – the non -profit organization owner of the premises – jumped $ 80,000 to $ 220,000. “We pay the commercial tax rate for our building, and that rate is very high in Montreal,” said Stéphane Ricci, vice-president of SDA development.

To avoid bankruptcy, the OBNL had to pass on to its tenants most of this increase, which was added to that of its mortgage costs. The increase in rents has been full -bodied: up to 35 % over three years, according to an article in Duty^⁠1.

Artists have shouted in betrayal and folded luggage. Because the reasonable prices promised at the start were suddenly much less so in their eyes.

At the heart of the problem is the “mechanical” to fix the rate of commercial taxes, underlines Mr. Ricci. “Whether you are carrying out a private for -profit real estate project, or a non -residential collective real estate project, it’s the same costs, the same process for land assessment. »»

In other words: the finance department of the City of Montreal generally uses the same calculation methods, that the building hosts an artists’ OPNL or a bank.

Dressing and hemorrhage

The case of workshops 3333 is the most recent example of a crisis that rakes much wider.

The muddyness of central districts has been observed for decades in Montreal. The phenomenon is known: former brownfields, such as Saint-Henri or the Mile End, are invested by artists due to the abundance of low-priced premises. These districts become cool and more desirable thanks to their presence.

This popularity explodes the price of rents. The creators must move their workshops to less exorbitant neighborhoods or abandon their practice.

What has changed in recent years is that even the more eccentric sectors have become expensive. The value of commercial buildings jumped without discrimination in the city center as in Saint-Michel.

And with it, the property tax bill.

The Quebec Ministry of Culture and the City of Montreal are well aware of the precariousness that strikes the visual arts ecosystem. They deployed a whole arsenal to give it oxygen in the wake of the post-pandemic inflationary spiral.

The two government orders thus extended 30 million in 2021 to finance five workshop projects in the metropolis – including that of 3333 – and ensure their long -term affordability. The city has created other programs to subsidize a portion of the cost of rents or storage of works.

Montreal even granted a three -year municipal tax discount to certain OBNL. This allowed workshops 3333, for example, to reduce rents a little after having increased them. The discontent has appeased, although it still has vacant premises.

But this solution is temporary. Like a dressing on a hemorrhage. What will happen when the period of tax grace will end, within a year or two?

It is a glaring concern in the cultural environment. At the heart of all concerns.

Imitate Toronto?

Basically: the industry requires a sustainability of the temporary tax discounts offered by the City to the workshops of artists. The measure would cost around 4 million per year, estimates Culture Montréal.

A drop in the budget of 7.3 billion in the metropolis. But a world of difference for an OBNL package, which often hold with spit and string.

This measure would have “nothing avant-garde,” said Pierre-François Sempéré. Toronto, for example, has offered since 2018 a tax rate reduced by 50 % to several cultural industries, including that of the visual arts. The objective was precisely to brake their exodus outside the city^⁠2.

The adoption of a reduced tax rate would be an effective, “almost simple” tool, adds Gilles Renaud, director general of creative workshops Montreal, one of the biggest groups in the metropolis. Montreal could – and should – quickly establish it to protect its creators.

But it feels resistance. A fear. That of opening a “Pandora’s box”, which would encourage all community organizations to demand such a privilege, at the same time growing the finances of the metropolis.

“The question of taxes is fundamental,” says Gilles Renaud. If we do not manage to make this move, the new workshop projects that we finance, sooner or later, will find ourselves in difficulty. I think we pellette forward important problems. Meanwhile, the land value increases… ”1. Read the article of Duty 2. Read the article of Toronto Star (in English; subscription required)