City of Winnipeg raids rainy day fund to balance 2022 budget

The City of Winnipeg will dip into its rainy day fund, spend less hard cash on infrastructure and try to claw back on police spending next year in order to balance a budget hit hard by a drastic reduction in Winnipeg Transit ridership.

The preliminary budget released Friday — the eighth and last of Mayor Brian Bowman's two terms as mayor — will once again feature a 2.33 per cent property tax hike and a modest spending increase.

The property tax increase will cost the average homeowner another $43 in 2022.

The city plans to spend $1.195 billion on all services in 2022, an increase of $15 million from last year. That works out to a 1.5 per cent spending hike in a year where Winnipeg's overall inflation rate is 4.5 per cent, according to Statistics Canada.

Spending on infrastructure will rise more dramatically — from $386 million this year to $525 million in 2022 — mainly because of federal and provincial contributions.

The city scrambled to balance its operating budget because the pandemic is still keeping revenues down.

"The year of challenges and difficult decisions we faced through economic uncertainty ... has been like no other," Bowman said during a news conference ahead of the formal tabling of the budget Friday afternoon.

City finance officials are expecting a $41-million revenue shortfall in 2022.

That's because Winnipeg Transit ridership is still two thirds of what it was before the pandemic and people still aren't parking as often on downtown streets, paying to swim in city pools, using city recreation centres or spending money on events at IG Field, Canada Life Centre or Shaw Park.

To balance the shortfall, the city is drawing $10 million from its fiscal stabilization reserve and replacing about $5 million of cash spending on infrastructure with debt financing.

For all intents and purposes, the city has been reduced to relying almost entirely on debt and money from other levels of government to pay for infrastructure.

'We're in an emergency'

The city only intends to spend $3 million in 2022 in hard cash on roads, bridges, building and equipment, which is a drastic reduction from the $75 million it devoted to "cash to capital" spending in 2016.

Coun. Scott Gillingham (St. James), chair of the city's finance committee, said the four-year 2020-2023 budget plan had forecast $20 million in cash to capital spending each year.

"But the pandemic hit and, quite frankly, we're in an emergency," he said.

"And because we're in an emergency, our revenues — especially our Transit revenues, our parking revenues — have really been hit hard. And so when we budget, we frankly need that cash in our operating budget to balance."

The city also hopes to save money this year by clawing back about $3 million from the Winnipeg Police Service. Its budget will rise by $7 million this year to $320 million, but was expected to rise even higher.

The budget also calls for diverting $12.6 million worth of new property tax revenue to backstop the budget. This money is usually spent on road repairs, but federal money will be spent on road renewals instead.

Spending on road repairs is also going up by $13 million next year, when it is slated to hit a record $165 million.

Other major infrastructure projects include $50 million to begin replacing diesel Winnipeg Transit buses with electric vehicles, $13 million to start a long-awaited new fire-paramedic station in Windsor Park, and nearly $2 million to replace the crumbling asphalt on the track where Winnipeg police officers learn driving skills.

Although there is a new provincial commitment to help the city develop its transit system, the budget forecasts the design for new downtown rapid transit corridors won't even start until 2025 or 2026.

Despite the frugal budget, the city is embarking on new spending to alleviate homelessness. The city is devoting almost $300,000 for public washrooms downtown and $250,000 for rapid housing. That's on top of $550,000 of existing spending on mobile outreach for homeless people.

The budget does not call for any new fees or any increase to the frontage levy.

City council is scheduled to vote on final approval of the budget on Dec. 15.

Bowman's last budget

There was both praise and criticism for the preliminary budget after its release.

Chris Lorenc, president of the Manitoba Heavy Construction Association, applauded the city's efforts in the face of difficult circumstances.

"Council has been able to — with very good, hard work — balance the needs the city faces with the budget that isn't sharp in any direction," he said.

However, while there were no major cuts to any department, the status quo was not good enough for one councillor.

For spending priorities, "public safety was No. 1 with a bullet — not be funny," said Coun. Kevin Klein (Charleswood-Tuxedo-Westwood).

"We're not spending any more money on ... public safety."

The president of the Winnipeg Police Association also criticized the funding commitment for police.

In an emailed statement, Maurice Sabourin accused Bowman of working "day and night to be the mayor of Twitter, instead of the mayor of Winnipeg."

He said he wasn't surprised to see Bowman's budget "place a low priority on public safety" by depriving the police service of "resources needed to meet the demand for its services."

This marks the last budget before Bowman's term as mayor ends next year. He has said he does not plan to run again in 2022.

During a meeting of city council's executive policy committee to table the preliminary budget Friday afternoon, Gillingham thanked the mayor for his service, while hinting at a potential run for the office.

"Many months to go, but I just wanted to put on the record appreciation," Gillingham said. "We don't know who the next mayor of this city will be ... might even be me."

2022 Winnipeg budget highlights

Operating budget (spending on city services): $1.195 billion, up $15 million from 2021. 

Capital budget (tax-supported spending on infrastructure and equipment): $525 million, up $139 million from 2021, mainly because of extra help from other levels of government. 

COVID-19 shortfall measures: The city is spending only $3 million of hard cash on infrastructure, drawing $10 million from its rainy day fund, clawing back police spending and diverting some money dedicated for roads.

Property tax hike: 2.33 per cent, unchanged from every other year Brian Bowman has served as mayor. In 2022 only, $12.6 million of the proceeds will help cover off the operating budget instead of paying for roads.

Total projected property tax haul in 2022: $689 million, up $22 million from from 2021. This is the result of the hike as well as new developments within the city.

Winnipeg Transit budget: $212 million, up $5 million from 2021.

Police budget: $320 million, up $7 million from 2021.

Fire-paramedic budget: $221 million, up $5 million from 2021.

​Road repair budget: $165 million, up $13 million from 2021. 

Electric buses: $50 million this year to begin replacing diesel buses.

Windsor Park fire-paramedic station: $13.4 million to build a new station to replace existing one in Windsor Park and the St. Boniface Industrial Station. Construction starts this year.

Homelessness help: $1.1 million for outreach, public washrooms and rapid housing. Two-thirds of this is new.

Police car training facility: $1.2 million to repair the asphalt where police learn driving skills.