Winnipeggers can expect another 2.33 per cent property tax hike in Friday’s preliminary city budget update, a proposal that avoids levying a steeper increase to offset pandemic losses.
"We’ve been consistent that tax increases will be limited to 2.33 per cent. That’s what the multi-year budget was built upon," said Coun. Scott Gillingham, council’s finance chairperson.
The tax increase will be capped to that level within the 2022 financial update because many residents can’t afford to pay more, said Gillingham.
"Rising inflation means Winnipeggers are paying more for gasoline and groceries. In contrast, Winnipeggers can expect a budget that focusses on controlling expenses, that keeps city services affordable for the people of Winnipeg," he said.
The decision to keep the cap on annual tax increases comes as the city suffers severe pandemic losses, compared to its original 2020 to 2023 multi-year budget.
Earlier this month, city finance officials predicted Winnipeg will end the year with a $17.3-million operating shortfall, plus a separate $9.6-million deficit for Winnipeg Transit. The dismal outlook was blamed on steep revenue losses and increased costs due to COVID-19.
For example, Transit continues to suffer from reduced ridership, which hovered between 52 per cent and 55 per cent of pre-pandemic levels over the past six weeks.
The shortfalls in 2021 are expected to reduce the city’s rainy day fund, or financial stabilization reserve, leaving less cash available to fill funding gaps in 2022, Gillingham said.
"The reality is we are dealing with a one-in-100-year global pandemic that has had significant financial impacts on the City of Winnipeg, so we have to be responsible to make sure we’re controlling expenses and managing through the pandemic," said Gillingham.
He declined to reveal if the city will cut jobs or services to cope with its losses, stating that will become clear once the preliminary update is released Friday.
The finance chairperson suggested the budget will "build Winnipeg for the future."
"Investments are being proposed to spur economic recovery," he said.
The city’s budget woes would be far more dire if not for significant federal and provincial funding, which includes $74.5 million in pandemic relief funds sent from Ottawa late last year and a doubling of the city’s federal gas tax revenue grant to $88 million this year, said Coun. Brian Mayes, a member of council’s executive policy committee.
The province also provided Winnipeg with $50 million for a recreation strategy that will roll out over three years.
"There would have been some very hard decisions about cutbacks or increasing revenue, if we hadn’t had (that) help," said Mayes.
Many Winnipeggers will also be watching the financial update for possible new investments after council unanimously approved the city’s first poverty-reduction strategy Thursday.
Michael Barkman, chairperson of Make Poverty History Manitoba, is lobbying council to add targeted investments to enhance the so-far cost neutral strategy.
New funding is needed to add seven affordable housing staff and create a low-income bus pass with a sliding scale of prices based on each rider’s income, Barkman said.
"If we looked at 150 units of social housing annually, that would really contribute to our goal towards ending homelessness and really addressing the social housing crisis," he said.
The pandemic has highlighted income inequities in the city, including the now-common sight of Winnipeggers sleeping in bus shelters and encampments, Barkman said.
"Homelessness is increasing in the city, people are seeing that on the street… I think there’s a lot of urgency there for the city to act," he said.
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.