you will pretty much not have to pay taxes in montreal- i lived there for several years and my roommate then was an international student (US) with comprable funding.
You can actually receive almost all of the taxes they take off in the tax refund, and then probably get extra in a GST return. McGill has very good tax services for international students, but I found that attending their sessions and then getting one of the people who offer to do taxes for $15 (there will be plenty come tax time) is VERY helpful... Montreal also lets you claim the property tax that your apartment manager has to pay
As for living expenses, you can do very well because it's such a cheap city to live in... rent for a nice apartment (let's say 2 bdrm) can be found for around 850 (not inclusive), but that would depend on where you lived. I had a place in NDG for $700 all inclusive, 2 bdrms. Also, a metro pass is discounted for students, and they cost $35 a month, and you can get everywhere on it (includes metro and bus).
Have a great time there... it was by far the best city i've lived in thus far if you factor in everything from housing, quality of education, lifestyle, cost of living etc.