Pandemic to hurt City of Winnipeg’s bottom line until 2023

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This article was published 08/10/2021 (1803 days ago), so information in it may no longer be current.

The financial blow of COVID-19 on the City of Winnipeg’s bottom line is expected to stretch into 2023.

The city expects an additional $23.1 million of COVID-19 costs and losses, which would raise the total financial hit to $84.3 million for 2021, based on financial data up to Aug. 31. (The 2021 budget already accounted for $61.2 million worth of COVID-19 impacts.)

“It’s clear now from the departments’ financial records that the impact of COVID is greater in 2021 than what was budgeted for,” said Coun. Scott Gillingham, the city’s finance chairperson. “The recovery is not a matter of flicking a switch and everything is back (to) normal. It is going to take a while for the City of Winnipeg to recover financially from COVID-19.”

When non-pandemic losses are factored in, the city expects to finish the year with a $16.6-million tax-supported operating shortfall. Winnipeg Transit expects a separate deficit of $10.6 million.

Gillingham expects pandemic losses to affect the municipal budget into 2023.

Winnipeg Transit revenues are predicted to fall $16 million below a 2021 budget projection as the pandemic drags on. However, a report predicts that loss will be offset by savings linked to salaries, benefits, bus parts and reduced (accessible) Transit Plus demand.

Gillingham said Transit’s ridership continues to be depleted as universities rely less on in-person classes and many downtown commuters continue to work from home.

“That continues to hamper the speed of recovery for the city’s finances,” said Gillingham.

Other COVID-related costs include the city’s economic recovery grants, as well as lost entertainment and hotel tax revenue.

The St. James councillor said the city will seek alternatives to cuts and layoffs to improve its financial outlook. However, all cost-saving options must be considered to balance the books, including potential cuts to Winnipeg Transit service, he said.

“If there are buses that are running empty, if there’s not a demand currently for a full service, that needs to be considered,” said Gillingham.

The city’s tax-supported operating losses stem from reduced traffic enforcement revenue, increased firefighter overtime and the cancellation of a police pension overhaul that would have saved millions each year, among other costs.

The finance committee will be asked to approve a $7.3-million overrun for the Winnipeg Police Service and a $3.4-million overrun for the Winnipeg Fire Paramedic Service (with the latter based solely on fire department costs).

Ending the year with a deficit may be more likely this year, Gillingham noted, since the city has not received federal or provincial funding to assist with its pandemic losses. In 2020, the federal government provided $74.5 million of safe restart program funding to Winnipeg, which played a major role in balancing the city’s books.

Meanwhile, a separate city report notes the new North District Police Station is expected to cost $27.9 million, up from the previous estimate of $25.7 million, due to the rising cost of building material and labour as a result of the pandemic.

Joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga