Mayor warns cost of Winnipeg Transit soaring

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This article was published 14/12/2023 (663 days ago), so information in it may no longer be current.

Taxpayers will be on the hook for skyrocketing Winnipeg Transit subsidies — just the latest strain on the city’s next budget, Mayor Scott Gillingham says.

The mayor announced municipal Winnipeg Transit subsidies have substantially increased in recent years and forecasts indicate the trend will continue throughout the 2024 to 2027 multi-year budget.

“One of the challenges that we’re having in balancing the budget is the increased demand for Transit subsidies. Now, Transit is a very important service. Many Winnipeggers depend on Transit as their only, or primary, means of transportation. So, we’ll continue to make sure that we provide that service and then fund it,” Gillingham told reporters on Thursday.

“This is an opportunity to let the public know, and the stakeholders know, that because of changes over the years, our need to put more tax dollars into transit to keep the buses running has increased and… is forecast to increase significantly.”

The mayor’s office said transit projects its city subsidy will need to increase by $29 million to $37 million in each of the next four years, when compared to amounts forecast in 2020.

Transit costs began to spike in 2021, due to pandemic declines in fare revenue, fuel cost hikes and the introduction of reduced fares, such as free rides for kids under 12 and a low-income bus pass.

Gillingham said the latest increases would build upon previous subsidy hikes.

The 2021 forecast for Transit’s operating subsidy was $59.9 million, which rose to $99.3 million in actual spending. The amount rose from $65.2 million to $88.7 million in 2022 and $70.8 million to $90.6 million in 2023, data from the mayor’s office shows.

“Under COVID, fare revenue was significantly reduced and to keep… as many buses running as possible, we had to significantly increase our budget,” the mayor said.

The mayor’s office said the operating subsidy is expected to jump again from a predicted $72.2 million to $102.1 million in 2024, $73.6 million to $105.3 million in 2025, $75.1 million to $109.2 million in 2026 and $76.6 million to $113.5 million in 2027.

Gillingham did not call on the provincial government to restore a past agreement in which it covered 50 per cent of the service’s operating costs. Instead, he asked for a broader discussion on municipal funding.

“The premier talked about working… with the city on growth-oriented funding and so… I don’t want to look at one specific old model but rather be open to discussing new models,” he said.

Gillingham said he’s still committed to keeping annual tax hikes at 3.5 per cent.

“Households are facing inflationary pressures, so to levy upon Winnipeggers, at a difficult time, a more substantial tax increase, (would make) it more difficult for property owners,” said Gillingham. “(This announcement is) just to explain to Winnipeggers, once again, the state of our budget challenges and the significant struggles we are having in developing this budget.”

The mayor declined to say whether the city will need to cut services to bridge any financial gaps.

When asked if there were cuts he could rule out, Gillingham stressed Transit is an essential service.

“We will find ways to ensure that Transit is funded,” he said.

Thursday’s comments mark the second time in a little over a week the mayor has warned about difficult budget decisions ahead.

On Dec. 6, he issued a separate news release that warned inflation, rising labour costs and lingering pandemic losses will force council to make “difficult decisions” in the fiscal blueprint.

joyanne.pursaga@freepress.mb.ca

X: @joyanne_pursaga