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City fends off bleak budget

Grim financial forecast avoided through cost-cutting efforts, federal funding

Joyanne Pursaga By: Joyanne Pursaga 
Posted: 01/12/2021 3:00 AM

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Coun. Scott Gillingham, finance committee chairman, says federal funds and cost cutting helped avoid a $92-million deficit amid COVID-19.

MIKAELA MACKENZIE / WINNIPEG FREE PRESS FILES

Coun. Scott Gillingham, finance committee chairman, says federal funds and cost cutting helped avoid a $92-million deficit amid COVID-19.

The City of Winnipeg now believes its budget would have fallen $92 million short in 2020, had ample federal support and cost-cutting measures not filled the gap.

Thanks to those major changes, the city now expects a deficit of $400,000 for last year’s tax-supported operating budget, based on figures up to Nov. 30, 2020.

When all city departments are considered, the financial projection is even better — with an overall operating surplus of $26.1 million expected.

"There are two main reasons that we are ending the year in an overall surplus across all city departments of $26.1 million. One is the crisis cash-flow management plan actions that were put in place through 2020, and the second is the federal Safe Restart Agreement funding," Coun. Scott Gillingham, finance committee chairman, said Monday.

"The federal funding has helped the city fill the financial holes that were created in the 2020 budget by COVID-19, and this in turn has helped the city be in a better position to deal with the financial impacts of COVID-19 in 2021."

Federal pandemic support provided $42.2 million to Winnipeg’s municipal government, plus another $32.3 million to its transit department. Gillingham said the city’s own cost-cutting measures, which began early on in the pandemic, were also essential to preventing major losses.

Those changes included temporary layoffs, Winnipeg Transit service reductions, and a hiring freeze.

Without those cutbacks and senior government support, the city’s latest estimate says Winnipeg’s 2020 budget would have fallen $92 million short. That would include losses of $33.1 million for the tax-supported budget, $46.4 million for Transit, and $11.2 million for special operating agencies, among other more minor shortfalls.

The all-department surplus now expected is largely credited to a $21.9-million surplus for city utilities. Gillingham noted the waterworks, sewage disposal and solid waste departments are all expected to finish 2020 with multimillion-dollar surpluses.

City spokesman Kalen Qually said those surpluses were fuelled by several factors, including: an increase in tipping fees at 4R depots; increased sewage consumption rates; and vacancy management savings.

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Meanwhile, Transit now looks set to finish the year with a $3.3-million surplus, after federal funds more than erased its previously expected $28.7-million shortfall. Transit is expected to use the extra funds to offset future losses, as the pandemic continues to affect ridership.

Despite the dramatic financial improvements, Gillingham remains concerned the effects of COVID-19 could still cause a significant blow to the bottom line this year, as business closures and public health restrictions continue.

"My ongoing concern is we don’t know how long the pandemic is going to go, and we don’t know how deep its financial impact will be on the city in 2021," he said.

The expected $400,000 deficit for 2020 is set to be covered by council’s rainy day fund.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga

Joyanne Pursaga

Joyanne Pursaga
Reporter

Born and raised in Winnipeg, Joyanne loves to tell the stories of this city, especially when politics is involved. Joyanne became the city hall reporter for the Winnipeg Free Press in early 2020.

   Read full biography

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