Winnipeg’s capital-project bill amounts to structural deficit

MHCA president urges Council to push for New Fiscal Deal in fall elections

Winnipeggers can’t afford a property tax hike of 30% – or 37% on water and sewer rates – to pay for $4.9-billion of major capital projects needed in the next decade, MHCA’s Chris Lorenc told the Executive Policy Committee June 11.

“Major capital projects need major funding sources, and given current municipal access to revenues and revenue sharing that by necessity, means tapping into the higher levels of government for assistance,” Lorenc noted.

Municipalities have limited revenue sources – primarily property taxes – while bearing the burden of maintaining fully 50% of public infrastructure. Yet, they collect only 8 cents of every tax dollar.

A new fiscal deal would better balance the responsibilities and could expand municipal taxing authority to look for new sources of revenue.

Lorenc spoke to the EPC as it reviewed an administrative report advising Council prioritize the projects and consider its options for raising the cash for 22 capital projects, and securing the financing required.

It is not just major capital projects that present a challenge, he stressed. The local streets renewal budget, for example, was gutted in the 2019 budget because Winnipeg counted on provincial roads funding that did not flow. Further, it faces $174-million shortfall in its five-year forecast for the local and regional street renewal program because there is no new provincial roads funding agreement to replace the one that expired last year.

This underscores the problem with relying on higher levels of government – funding deals are dependent on political priorities, not long-term strategy and commitment.

Lorenc noted some of the problem lies with the way Winnipeg has not held to the plan to get its streets and roads fixed, and to sustainable levels of funding – the cash-to-capital contribution to the program over five years fell $56 million short of the plan, for example.

And now Winnipeg will allow bridge work to qualify for funding out of the street renewal reserve, built by the annual 2% tax hike. That flies in the face of the dedicated tax’s original purpose.

Click here to read Lorenc’s full presentation to EPC.