Winnipeg Free Press - PRINT EDITION

You get what you pay for

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Winnipeg's mayoral race is now officially underway. Any serious contenders are going to have to convince a very skeptical public they can turn around what really has been a winter of discontent with city services. Unfortunately, problems that have taken years to accumulate are unlikely to be addressed overnight.

A quick look at the city's budget priorities over the last several years shows how we got into this mess. Between 2001 and 2013, total City of Winnipeg revenue increased by 42 per cent. This number provides ammunition for those claiming the city's spending is "out of control." Yet this number is misleading for two reasons.

First, it neglects the impact of inflation. Once the budget is adjusted for the rise in prices over this period -- into what economists call "real dollars" -- the increase in the budget between 2001 and 2013 shrinks to 12 per cent.

Second, it fails to account for Winnipeg's growing population, which increased from 637,000 to 714,000 over these years. A growing population means there are more people to pay into the city coffers but also more people using all the services. When the budget is calculated on a real, per-person basis, it is unchanged since 2001. It was $1,044.8 in 2001 and $1,045.4 in 2013, an increase of 60 cents.

This marks a stark contrast to what other cities in Western Canada have been doing. In order to pay for growing urban amenities, between 1999 and 2013 property taxes in Edmonton, Calgary, Saskatoon, Vancouver and Regina have increased by between 40 per cent and 68 per cent while Winnipeg, which reduced or froze taxes until 2012, has constrained its budget with a net one per cent increase over that time period. Despite raising property taxes by 2.95 per cent in 2014 (and proposing further increases of at least two per cent every year until 2020) the city was still able to boast in its 2014 budget it had the lowest municipal property taxes of any major Canadian city (as opposed to combined municipal and school taxes, which make up the total property tax people pay). This says a lot about what the city priorities have been over the last decade or so. When asked "what should the city do for its citizens?" city hall's answer has been less. Given the city's unwillingness to tax Winnipeggers, it is hardly surprising they have little money to spend. After all, the services the city can provide are inseparable from the taxes that fund them.

Out of this stagnant budget, Winnipeg has also made its spending priorities clear over the past decade. Between 2002 and 2012 two department budgets, police and fire and paramedics, have grown by 73 per cent, far above the 29 per cent growth in inflation and population over this period. By contrast, all other public-service budgets, which includes infrastructure such as roads and streets, have grown by only 26 per cent. The administration budget has actually decreased by 15 per cent during this period. So limited funds have gone to "protection" rather than spending on an accommodating environment that encourages confidence on our city: roads, snow clearing, parks and bike lanes.

A cynic might point out the citizens of Winnipeg have exactly the crumbling infrastructure they have asked for. The priorities of the current mayor have not been hidden. His successful campaigns have been run largely on the lacklustre vision of low property taxes and fighting crime. Winnipeggers can hardly be surprised that limited city revenue has been spent on a costly police helicopter rather than amenities for the city.

Whoever finally decides to throw their hat in the mayoral ring this summer is going to be faced with a city budget suffering from years of deliberate neglect. While all the candidates are likely to make some grand promises about fixing the streets, without a comprehensive plan to increase city revenue, the crumbling will continue. Winnipeg needs a municipal government that grasps the concept of the public good. Pooling our resources as citizens is how we can generate the money needed to finance city services. Rather than a city hall that deliberately starves itself of resources, the mayoral candidates should put forward a positive public vision that features paying taxes in exchange for rational development and city amenities. Sometimes you get what you pay for.

  • A community meeting takes place tonight from 7 p.m. to 9 p.m. at the St. Norbert Community Centre, 3450 Pembina Highway to discuss alternatives to city spending and revenue.

Ian Hudson is an associate professor in the department of economics at the University of Manitoba and research associate at the Canadian Centre for Policy Alternatives Manitoba.

Republished from the Winnipeg Free Press print edition May 22, 2014 A13

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