$22M from feds not enough to 'weather the storm,' Winnipeg mayor says, hinting at property tax hike

Winnipeg Mayor Brian Bowman says a federal announcement that Ottawa will send municipalities gas-tax funds early is welcome, but more needs to be done so the city doesn't have to resort to increasing property taxes.

Prime Minister Justin Trudeau announced Monday the $2.2 billion in annual infrastructure funding for communities will be delivered in one payment in June. That gives municipalities hit hard by the COVID-19 pandemic earlier access to previously committed money from the gas tax fund.

Even with the earlier access to the $22 million the city has already budgeted, Winnipeg can only "weather the storm" until the end of summer.

Then municipal politicians will have to make some difficult decisions if more isn't done.

"We will have to look at some fundamental choices between services and increasing the tax of property owners, neither of which should help with an economic recovery for Winnipeggers and for Canadians," he told Rosemary Barton on CBC News Network after Trudeau's announcement.  

Bowman called Trudeau's announcement "a good first step," but the way municipalities collect money needs to fundamentally shift if they want to be able to survive the new normal, he said.

"Municipalities for decades have been delivering services with one hand tied behind their backs. We don't have the revenue tools or the models that other levels of government have, but the expectation from our residents continues to grow," he said.

"What COVID has done is tied the other hand behind our back."

The Federation of Canadian Municipalities said local governments are facing a short-term financial gap of up to $15 million because of a drop in transit fares and user fees as well as deferred property taxes.

The federation is pressing the federal government for $10 billion in emergency operating funding, with allocations based on population and transit ridership.

The advanced support from the federal government is earmarked for capital costs and not operating budgets.

Bowman wants the province to work with the federal government sooner rather than later to help come up with a solution to protect Winnipeggers from escalating property taxes.

"It's not a smart form of taxation and if you want to help support economic growth and recovery, you don't do it by doubling down on the tax burden of property owners and businesses."

The federal government has deep pockets and provinces have the power to make structural changes, as well as borrowing capabilities. Municipalities are prohibited from borrowing for their operating budgets.

"The other two levels of government need to co-ordinate in a way that's unprecedented and rises to the occasion and need right now in the pandemic." 

Trudeau said the federal government will work with the provinces, which have jurisdiction over municipalities, to provide more emergency aid.