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This article was published 19/3/2020 (501 days ago), so information in it may no longer be current.
In response to COVID-19-related school closures, Winnipeg's mayor and council are rushing to vote on the city budget on Friday, a week earlier than originally planned. The budget is widely decried by community groups, and given the COVID-19 crisis, vulnerable community members need more support, not less.
The budget cuts are not necessary; Mayor Brian Bowman and city council have a way out — financially, and politically.
The cuts include the elimination of the highly popular student U-Pass, cutting back 14 bus routes, reducing library hours, cutting leisure programs by 50 per cent, a 10 per cent cut to grants to community-based organizations, including Rossbrook House and IRCOM, a $493,000 cut from the Winnipeg Arts Council grant, and eliminating the public art program altogether.
The budget also cuts important city services and eliminates municipal jobs, including cutting staff who do emergency water repairs and answer 311 calls, and closing the Waverley fleet yards where city vehicles are repaired.
There is an alternative to each of these cuts. Brian Bowman’s 2018 campaign promise to cap property tax increases had a huge caveat: he would limit the increase to 2.33 per cent, as long as there were no further decreases in provincial transfers (Winnipeg Free Press, Sept. 14, 2019). The province has frozen transfers to municipalities; the city estimates the cuts from the province amount to $38 million per year.
Although this year’s provincial budget has yet to be released, we can assume that further cuts to municipalities will be included. The mayor’s caveat opens up room for council to make up the difference with property- and business-tax increases, along with more progressive options such as suburban parking-lot levies, as proposed in Imagine a Winnipeg: the 2018 Alternative Municipal Budget.
The 2018 Alternative Municipal Budget found cuts that year would have been unnecessary if the mayor and council had been willing to bite the bullet and increase property taxes an additional five percentage points to 7.33 per cent — a very reasonable increase of $12 per month for the average home (less than the cost of Netflix). A similar move, and a small increase to the business tax, would cover the $30 million needed to prevent this year’s cuts.
Instead, community groups that are on the front lines of supporting vulnerable Winnipeggers dealing with COVID-19 will have city funding cut 10 per cent at a time when it should be enhanced to deal with the crisis. And when COVID-19 concerns subside and city facilities open again, libraries will be closed on Sundays and leisure activities cut in half. How did we get to this dire situation?
Loren Remillard, chair of the Winnipeg Chamber of Commerce, interprets the cuts as "an effort to prioritize 'core services' in Winnipeg" (Winnipeg Free Press, March 10, 2019). So what, exactly, are core services?
The mission of the City of Winnipeg is to promote quality of life for all Winnipeggers and its purpose, as defined in provincial legislation is "…to develop and maintain safe, orderly, viable and sustainable communities; and to promote and maintain the health, safety, and welfare of the inhabitants."
Instead, Winnipeg is barely keeping up with the demands of a modern city and suffers from low transit ridership, crowded buses, persistent homelessness, reduced access to libraries and recreation, and reduced city services. COVID-19 will be incredibly challenging for the vulnerable and those of limited means. Winnipeg can and must do better.
When Brian Bowman was elected in 2013, he also campaigned on a property tax increase of 2.33 per cent, dedicated solely to roads and rapid transit. So although the 16-year tax freeze maintained by mayors Glen Murray and Sam Katz was finally thawed in 2013 (by Katz in his final year), civic departments have had to make do with below-inflationary increases for more than eight years.
Bowman, former chair of the Winnipeg Chamber of Commerce, ran on this 2.33 per cent platform again in 2018, along with further reductions in business taxes.
In 2002, the business tax in Winnipeg was 9.75 per cent of business rental property value; it has since been lowered regularly. The 2020-21 tabled budget lowers it again, to 4.48 per cent. Eighteen years of business tax cuts represent a loss of over $17 million in real revenue dollars to the city annually, according to University of Manitoba economist Ian Hudson.
The reduction in business tax shifts the tax burden over to property taxes. And the limited 2.33 per cent property-tax increase dedicated to roads and rapid transit has created a structural deficit of the city’s own making.
Why are we lowering the business tax when the cost of doing business in Winnipeg is already competitive? Economic Development Winnipeg touts Winnipeg’s as the "lowest-cost location for select U.S. and Canadian businesses," due to the low cost of living and a favourable business environment.
It is time to stop listening to the business lobby and start listening to those hurt by the cuts. Winnipeggers elected one of the most progressive city councils in recent memory. A majority of executive policy committee purports to be allies of low-income and working people, and to hold progressive values. We need to push these councillors so they do not succumb to the lobbying of the Chamber about "core" services while business continues to benefit from the public services paid for by Winnipeggers’ property taxes.
Let us remind the mayor about his election-promise caveat, and press for more revenue from property- and business-tax increases to avoid the devastating service cuts in the city’s preliminary budget at a very challenging time. Contact the mayor and your council representative, and get involved.
The final budget is scheduled to be voted on by city council on Friday at 9:30 am.
Molly McCracken is the director of the Canadian Centre for Policy Alternatives – Manitoba.