Mayor Sam Katz said a transit fare hike will move ahead unless the province claws back a portion of the increased revenue or suggests another way to fund the second-leg of the city's rapid transit corridor.
On Wednesday, council voted 8-6 to add 20 cents to a planned five-cent transit fare hike in 2012 to help finance the cost of completing the city’s first rapid transit line, all the way from Queen Elizabeth Way near The Forks to Bison Drive near the University of Manitoba.
St. Norbert Coun. Justin Swandel proposed the larger fare hike after Fort Rouge Coun. Jenny Gerbasi amended the transportation plan to set more aggressive guidelines to complete rapid transit lines. But council did not consult with Winnipeg Transit and corporate finance officials about the change and did not warn the public.
The province must also sign off on the plan, as it determines the level of subsidy to Winnipeg Transit.
Katz said the province and city have a 50-50 transit funding agreement, and the province could decide to claw back a portion of the additional fare revenue to divert to their general revenue fund. If that occurs, Katz said Winnipeg would not have enough money to finish the second phase of the southwest rapid transit corridor.
He said he will keep an "open mind" about other funding options the province may suggest, noting the city has met regularly with the province to discuss different ways of funding municipal infrastructure.
"I'm open ears, absolutely," Katz said this afternoon. "The whole scenario here was to identify a source of funds to complete the rapid transit corridor by 2016, to stop talking the talk and walking the walk. If there are other opportunities out there who wouldn't maintain an open mind?"
This morning, Selinger said he would prefer to see the city follow the usual process when it considers such a hike. He also suggested there may be better ways to support rapid transit without placing the financial burden on transit users, many of whom are of limited financial means.
"We’ll take a look to see whether there’s way to advance rapid transit without putting it all the pressure on the fare box," Selinger said during a regular appearance on CBC Radio One.
Local Government Minister Ron Lemieux said Thursday the province was unaware the city was considering a transit hike until they saw it in the media.
He also said the city has the power to raise bus fares without the blessing of the province.
"The City of Winnipeg is a duly elected government and they make the choices on taxation and raising taxes in the city, whether it’s bus fares or whatever," Lemieux said. "They are the ones solely responsible for this. This is not something that has to be rubber-stamped or approved by the province in any way, shape or form."
However, Lemieux added news of the increase came a week before city and provincial officials are to sit down and talk about the funding of rapid transit and its extension south to the U of M.
"I wouldn’t say the cart is before the horse," Lemieux said. "I don’t look at it as strictly a negative where the city is somehow trying to jam us. I really don’t. I think they’re hard-pressed for money just like other levels of government. All I'm saying is let the working group do its job."
Lemieux also said the province leads the country on a per capita basis in funding its municipalities including Winnipeg, which saw $237 million last year, a five per cent increase from the year before.
He also said the province is unclear how the 25-cent increase will apply to rapid transit as the city has not shared its plan with the government
"I don't look at it as a stunt at all. I look at as the City of Winnipeg trying to look at ways that they can raise money to fund something that the pouplation of the city of Winnipeg wants.
"We want to work with the city," he added. "I think our citizens no matter what, I mean elections are over, they expect their governments to work together no matter what political stripe."
Selinger said the first phase of the Southwest Rapid Transit Corridor, which runs from Queen Elizabeth Way to Jubilee Avenue near Pembina Highway, was financed using future real-estate developments.
In fact, the $138-million busway, which is slated to open in April 2012, was financed with the help of $90 million in city-provincial borrowing. The city and province intend to recoup the cash from property taxes flowing from new developments along the line, but no detailed financial analysis of this plan has ever been made public.
The city and province have been at odds over the completion of the second leg of the southwest corridor. But in recent weeks, Selinger and Katz have made relatively conciliatory statements about this goal.