Difficult financial decisions on the way, mayor warns Winnipeggers By: Joyanne Pursaga Posted: 2:10 PM CST Wednesday, Dec. 6, 2023

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Winnipeg’s mayor set the table Wednesday to deliver sobering financial news in the weeks to come, warning that “difficult decisions” will have to be made in drawing up the city’s next spending blueprint.

Inflation, rising labour costs and the residual effects of the pandemic will make things tough for councillors hammering out the upcoming 2024-2027 multi-year budget, Scott Gillingham told reporters.

“I think it is important that we do manage expectations,” he said, adding he was getting out the message in the interests of transparency.

“It’s certainly not a tactic as much as just trying to be honest with the people of Winnipeg about where we’re at, financially, as a city…. Most Winnipeggers, in their own personal budgets, are facing inflationary pressures and the increased cost of living. The City of Winnipeg is no different.”

The city is looking at vehicle leasing costs that have jumped from $3 million to $6 million, an eight per cent ($4 million) increase in the price of water-treatment chemicals and a 24 per cent hike in snow-clearing contract prices, according to news release issued earlier in the day.

The mayor’s office said police vehicles have more than doubled in cost over the “past few years,” from $30,000 to $66,000. However, officials said they could not provide more detail on the timelines for the price hikes by deadline Wednesday.

In addition, many infrastructure projects have also seen their budgets soar higher. For example, the price for the second phase of the three-phase North End sewage-treatment plant upgrade recently rose by $552.7 million to now exceed $1 billion.

The city noted its labour costs also grew under new contracts with the Canadian Union of Public Employees, Manitoba Government and General Employees’ Union, Winnipeg Police Association and Winnipeg Police Senior Officers’ Association, though it did not provide data.

Meanwhile, about $240 million of added costs and lost revenues due to the COVID-19 pandemic have largely drained the city’s rainy-day fund, which is expected to drop to $16.5 million by the end of 2023, far below its $78 million council-imposed minimum target.

“The pandemic forced the city to draw down on many of our reserves and it’s going to take time to recover,” Gillingham said. “So we have to keep that in mind as well…. We’re still digging out from under that,” said Gillingham.

“It’s a situation where, because of the competing priorities and the difficult decisions we have to make, we just want to be clear with Winnipeggers this is going to be a difficult process.”–Mayor Scott Gillingham

The mayor said no decision has been made on possible cuts to city services.

“But, it’s a situation where, because of the competing priorities and the difficult decisions we have to make, we just want to be clear with Winnipeggers this is going to be a difficult process,” he said.

Gillingham said he won’t increase taxes beyond the 3.5 per cent annual hike he campaigned on, stressing Winnipeg residents are also facing substantial increases in the cost of living.

“I want to keep my word (and)… (recognize) that Winnipeggers are facing inflationary pressures in their own personal household budgets and finances,” he said.

In recent months, councillors referred substantial new spending proposals to the budget process, including a request to spend between $2 million and $3.5 million more on library operations in each of the next four years to help them expand their hours.

Gillingham said the budget warning is meant for Winnipeggers, city departments and others.

“This is part of… communicating to the public, whether it’s our departments or certainly members of the public and other agencies and entities… it’s a message that this is a challenging budget year and so people should expect that difficult decisions are going to have to be made,” he said.

Coun. Jeff Browaty, council’s finance chairman, said the city will strive to maintain services but residents shouldn’t expect substantial new additions.

“It’s really, at this point, challenging to do a lot of additional new stuff, so this is sort of tempering people’s expectations. We’re going to provide, certainly, the core services Winnipeggers count on but there may be challenges to add a lot of new things,” said Browaty.

He echoed the mayor’s pledge that property taxes should continue as expected.

“I don’t want to scare Winnipeggers. We’re not looking at the property tax increases that we’ve seen in jurisdictions across the rest of Canada,” he said.

The city is legally required to approve its next budget by the end of March. It has not yet confirmed the date its preliminary budget will be released.

joyanne.pursaga@freepress.mb.ca

X: @joyanne_pursaga