City leans on Ottawa to balance budget

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This article was published 26/11/2020 (1240 days ago), so information in it may no longer be current.

Federal support, extended bus service cuts and millions of dollars of not-yet-realized savings are expected to help the city balance its pandemic-challenged budget.

A preliminary 2021 update to the 2020-23 multi-year budget outlines how the city expects to erase an $83.6-million shortfall over the next three years, which it largely blames on pandemic losses.

“We’re continuing to see alarming COVID-19 case numbers in Winnipeg and it’s a crisis that’s gripping our community,” said Mayor Brian Bowman, noting that includes a major financial toll for businesses and the municipal government.

To balance its four-year plan, the city aims to find $16.3 million of savings through future labour agreements, direct the Winnipeg Police Service to cut $15.3 million of costs and take on $10 million more debt. It also expects to save $12 million from a recently negotiated collective agreement with the Winnipeg Association of Public Service Officers and find $30 million by leveraging provincial capital funds.

The $1.18-billion draft operating budget for 2021 calls for a six per cent reduction in Winnipeg Transit service, which already took effect, to continue in 2021.

Recreation facilities won’t close to cut costs, though, since community services were deemed Winnipeggers’ No. 1 during budget consultations, Bowman said.

And property tax increases will continue to be capped at 2.33 per cent per year, with the new revenue devoted to road renewal and rapid transit. The average homeowner will pay $42.34 more in 2021.

The city plans to spend $152 million on road renewal next year, which is meant to help create jobs and boost the economy. The overall 2021 capital budget will reach $386.4 million, up from $369.5 million in 2020.

The financial plan depends on $74.5 million of federal Safe Restart program funding, which will offset both 2020 and 2021 losses. Coun. Scott Gillingham, council’s finance chairperson, confirmed it would have been very difficult to balance the budget without that pandemic-related support.

“It would have put us in a very difficult, I would say precarious, position,” said Gillingham (St. James).

The federal funds will cover $32.3 million of Winnipeg Transit’s 2020 losses and provide $31.3 million for the city’s 2020 operating budget.

Next year, the remaining $10.9 million of federal cash will fund affordable housing grants, a second deferral of business and property taxes and a grant program for small businesses and not-for-profit organizations forced to close or cease operations due to the pandemic.

The small-business grants will offer up to $1,500 per eligible company with fewer than 100 employees.

Loren Remillard, president of the Winnipeg Chamber of Commerce, said the assistance is appreciated.

“Every dollar matters for a company, for a small business in particular, (whose) doors are closed right now,” said Remillard.

The budget also triggered some criticism.

Coun. Kevin Klein argued the city should double the business grants, since many companies are now struggling to stay afloat.

“Some of them are losing their livelihood,” said Klein (Charleswood-Tuxedo-Westwood).

And a union leader predicts creating a savings target for collective agreements will produce unwanted side effects.

Gord Delbridge, president of the Canadian Union of Public Employees Local 500, said that could lead the city to limit wages and benefits and make it tougher to retain employees.

“Right now, the way it stands, we’re already having retention issues within the City of Winnipeg, primarily because of wages,” said Delbridge.

The budget could still be altered before a final council vote Dec. 16.

Joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga