COVID-19 appears set to carve a multimillion-dollar hole in another City of Winnipeg budget.

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COVID-19 appears set to carve a multimillion-dollar hole in another City of Winnipeg budget.

The city now expects to end 2021 with a $12.7-million tax-supported deficit, plus a separate $13.9-million shortfall for Winnipeg Transit. Both after the municipality managed to offset 2020 losses with cuts, layoffs and federal support.

"The impacts are deeper on the budget every month this pandemic drags on," said Coun. Scott Gillingham, chairman of the finance committee.

"As this pandemic goes on and on each month and lockdowns continue to deal with it, people aren’t riding the buses, people aren’t parking downtown, and people aren’t able to use our recreation facilities — and that has a significant impact on the city’s revenues."

This year’s expected shortfalls come after the city had already covered $61 million of added pandemic costs and revenue losses through a 2021 budget update, which forced significant changes to the 2020-23 multi-year budget.

While Winnipeg’s financial picture usually brightens closer to the end of each year, that trend may not pan out during the pandemic, a first-quarter finance report warns.

Gillingham said he’s not aware of any immediate plans to lay off staff or cut city services to bridge the financial gap.

Transit’s losses are largely linked to plummeting ridership, which averaged about 40 per cent of normal pre-pandemic levels, as of March 31. It’s not clear when those numbers could finally rebound, since the service continues to ask riders to board the bus for essential trips only, to prevent the spread of the novel coronavirus.

"The largest (loss) of course, continues to be Transit. With universities and the colleges closed to on-campus classes, with people not working downtown or choosing to use their vehicle to get around rather than the bus… We, as a city, are kind of at the mercy of the length that the pandemic goes on, the length of the health orders that have to be in place," Gillingham said.

If it finishes the year with a deficit, Transit is expected to cover the shortfall through a $16-million retained earnings fund. That cash is usually earmarked for unexpected costs and capital projects.

The city also fears it could endure a third consecutive round of pandemic losses in 2022, depending on how long it takes for public health orders to be lifted, Gillingham said.

"It’s very difficult to really know how far this pandemic is going to go and how deep the impact is going to be," he said.

The city previously cut bus service by six per cent for 2021 to help curb its losses, but has so far refrained from further reductions.

"We don’t want to crowd buses during the pandemic. On the other hand, we have to be financially responsible as well, to not have empty buses running around the around the city, adding to the city’s expense," said Gillingham.

If the tax-supported budget can’t be balanced by the end of 2021, the city expects to drain money from its so-called rainy day fund to cover the shortfall. Those losses are expected to include everything from falling police revenue (especially in photo enforcement fines) to missed savings targets in other departments.

On the flip side, COVID-19 also looks set to spark some city savings.

Winnipeg’s community services department expects its costs will come in $5.5 million under budget this year, after recreation and library facilities and programs closed due to public health orders.

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.

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