Winnipeg, MB – Today, at a special meeting of Executive Policy Committee (EPC), the City of Winnipeg’s Preliminary 2022 Balanced Budget Update was tabled. This year’s update will balance the remaining two years of the multi-year balanced budget.
“After 20 months, the global pandemic is still impacting the lives and finances of residents, businesses, and governments alike,” said Mayor Brian Bowman. “The Preliminary 2022 Balanced Budget Update focuses on the ongoing fiscal challenges being experienced by residents, businesses, and the City of Winnipeg while positioning the City for a multi-year economic recovery. This year’s Balanced Budget Update represents a prudent and disciplined financial blueprint that protects vital services, invests in key infrastructure priorities, and supports the City’s COVID-19 Economic Response and Recovery Plan.”
“The Preliminary 2022 Balanced Budget Update is balanced, addresses the financial impacts of COVID-19, invests in key infrastructure and keeps City services affordable for Winnipeggers,” said Scott Gillingham, Chairperson of the Standing Policy Committee on Finance. “The COVID-19 Crisis Cash Flow Management Plan has played a vital role in the multi-year balanced budgets and has enabled the City to address the ongoing financial impacts of the pandemic on the City and our residents.”
The total tax-supported budget shortfall to be addressed in the Preliminary 2022 Balanced Budget Update is $43.5 million over the next two years:
| Non-COVID-19 shortfall | $13.3 million |
| Net shortfall due to COVID-19 | $30.2 million |
| $43.5 million |
The $13.3 million non-COVID-19 shortfall is a result of two items and are partially offset by projected savings in other areas of the operating budget:
$12.5 million over the next two years as a result of the most recent Winnipeg Police Service Pension Plan valuation and contribution requirement unrelated to a previous arbitrator’s decision on police pension reform.
$3.4 million for the new federal holiday, National Day for Truth and Reconciliation.
The total COVID-19 related shortfall is approximately $36.1 million, and it includes:
| Winnipeg Transit - Primarily due to projected ridership in 2022 being 60-75 percent of 2019 pre-pandemic levels | $26.4 million |
| Lower parking revenue in 2022 due to less traffic and free parking | $5.4 million |
| Lower anticipated fee revenues at pools and recreation centres, together with additional costs for cleaning these facilities | $2.7 million |
| Reduced entertainment tax revenue and other COVID-19 related costs | $1.6 million |
| $36.1 million |
The $26.4 million shortfall within Winnipeg Transit is proposed to be reduced using the same six percent reduction in transit service as was adopted by Council in 2021. It is also proposed that a one-time drawdown on Winnipeg Transit’s retained earnings be utilized. Combined, these measures would reduce the Winnipeg Transit shortfall by approximately $5.9 million to $20.5 million in 2022.
A detailed accounting of all the measures proposed to balance the operating budget can be found in Volume 2 of The Preliminary 2022 Balanced Budget Update, some of the most significant measures proposed to balance include:
| Allocating the two percent property tax increase to the operating budget in 2022 | $12.6 million |
| A one-time draw from the Financial Stabilization Reserve in 2022 | $10 million |
| Additional expenditure management savings within the Winnipeg Police Service operating budget over the next two years (equal to approximately 50 percent of the cost of the additional police pension expenditure) | $6.1 million |
| Savings to be achieved by replacing cash to capital with internal debt financing | $5.4 million |
Public engagement in advance of the Preliminary 2022 Balanced Budget Update indicated that Winnipeggers’ priorities were community safety, community services, roads, driving efficiencies, and public transit.
Overall, the tax supported operating budget will continue to increase annually by an average of 1.3 percent from 2020 to 2023 which is in line with the multi-year balanced budget. This increase is among the lowest annual increases in tax-supported expenditures in the last decade.
There is a particular focus along with significant investments included that support the City’s COVID-19 Economic Response and Recovery Plan. Providing certainty to residents and businesses on property and business tax levels is one of the ways the City can support economic recovery.
The Preliminary 2022 Balanced Budget Update continues to cap property tax increases at 2.33 percent per year for the next two years. This means the average homeowner will pay an additional $43 on their property taxes in 2022.
The Small Business Tax Credit threshold has increased to $44,220, which means 6,700 businesses will not pay the Business Tax in 2022. Approximately 55 percent of all Winnipeg businesses will receive a full credit of their business taxes in 2022. The business tax rate will also remain frozen at 4.84 percent for 2022.
“With the consumer price index rising to 4.5 percent, Winnipeg residents are paying more for groceries and gasoline,” said Gillingham. “By contrast, the Preliminary 2022 Balanced Budget Update limits the City’s budget increase to 1.3 percent.”
In response to the impact that the global pandemic has had on our city’s most vulnerable residents, the Preliminary 2022 Balanced Budget Update includes over $2 million in new investments. This new funding will support mobile outreach services, the operation of public washrooms in the Downtown area, staffing for the Rapid Housing Initiative funds the City received from the federal government, and connect those experiencing homelessness with the services they need.
The Preliminary 2022 Balanced Budget Update proposes a six-year $2.9 billion capital investment plan to help support growth while also supporting the City of Winnipeg’s multi-year recovery from the global pandemic. This investment in capital infrastructure will support population and economic growth, as well as jobs during a period of fiscal uncertainty. Investments in capital infrastructure remain as one of the most important tools available to government during times of uncertainty. This capital plan proposes investments including road renewals, the Winnipeg Transit Master Plan, the Combined Sewer Overflow Mitigation Program, the Southwest Sewer Interceptor, a new mobile modular Winnipeg Fire Paramedic Service station, investments in the protection and enhancement of our tree canopy, and a full one-third cost share to provide water and sewer services for Phase 1 A of the Airport Area West Lands located within CentrePort, contingent on provincial and federal support.
It is estimated that the proposed six-year $2.9 billion capital investment plan will boost GDP by over $1.3 billion in Manitoba and $375 million across Canada, create over 10,800-person years of employment in Manitoba, while generating incremental tax revenue to the provincial government of $147.5 million and $194.2 million to the federal government.
Specific budget investments in the operating and capital budgets that align to budget engagement results include:
- Community Services - The capital investment plan also includes a specific focus on outdoor recreation and open spaces with $23.8 million of investments going toward active transportation, spray pad amenities, parks, and open spaces.
- Community Safety - The Winnipeg Police operating budget is increasing by an average of 2.2 percent from 2020 to 2023, exceeding the two percent annual target which is directly a result of the police pension valuation adjustment requiring $6.0 million over 2022 and 2023, and an investment in personal protective equipment of $400,000 in 2022.
- Roads - The six-year capital investment plan proposes an investment of $872.9 million into regional and local road renewals. This level of investment would result in approximately 1,035 lane kms of road reconstruction or renewals, which is slightly more than the distance from Winnipeg to Churchill.
“While the global pandemic continues to have an impact that needs to be mitigated, it's imperative that we focus on the future,” said Bowman. “The investments into services and infrastructure made by the Preliminary 2022 Balanced Budget Update will provide a foundation for a multi-year recovery and grow Winnipeg for the future.”
The Preliminary 2022 Balanced Operating and Capital Budget Updates will be discussed at Standing Policy Committee meetings over the next two weeks, with Council voting on the Preliminary 2022 Operating and Capital Budget Updates at a special meeting of Council on December 15, 2021.