City of Winnipeg releases preliminary 2022 budget, with COVID-19 continuing to impact finances

WINNIPEG -

The City of Winnipeg tabled its updated budget Friday, which will balance the final two years of the multi-year balanced budget.

The COVID-19 pandemic once again played a significant role on the budget, accounting for the majority of the shortfall over the next two years.

The city is projecting a $43.5 million shortfall with $30.2 million due to COVID-19.

The original projection for the COVID shortfall was around $36.1 million. The breakdown of that includes $26.4 million for Winnipeg Transit, as the city is projecting ridership in 2022 to be around 60 to 75 per cent of pre-pandemic levels.

Lower parking revenue in 2022 is expected to cost about $5.4 million, while lower revenues at pools and recreation centres are expected to be a $2.7 million hit.

Lastly, another $1.6 million is expected in reduced entertainment tax revenue and other COVID costs.

Now the transit shortfall will be reduced slightly as the city said it will be using the six per cent reduction in transit service which is the same as in 2021. The city is also proposing a drawdown on transit's retained earnings to be used.

With these changes, that brings the transit shortfall to $20.5 million, which helps bring the total COVID shortfall to $30.2 million.

"In spite of our losses and pandemic uncertainty, the Preliminary 2022 Balanced Budget update presented today reflects the strength and the stability of our multi-year budget planning and the resilience of Winnipeggers who are dedicated to weather every storm together," said Mayor Brian Bowman Friday afternoon.

The rest of the deficit is made up of $13.3 million in non-COVID expenditures. However, the city expects this money to be offset by other savings in the operating budget.

The $13.3 million is coming from two specific areas, the $12.5 million allocated over the next two years for the Winnipeg Police Service Pension Plan and $3.4 million for the new federal holiday, National Day for Truth and Reconciliation.

HOW THE CITY PLANS ON BALANCING THE BUDGET

Some of the steps the city plans on using to balance the budget includes $12.6 million from an increase in property taxes in 2022.

The property tax is set to increase by 2.33 per cent each year for the next two years. With this, homeowners in Winnipeg will be paying an extra $43 in 2022.

The city is also using $10 million from the Financial stabilization Reserve next year.

An additional $6.1 million will be coming from expenditure management savings from the police operating budget and $5.4 million is being saved by replacing cash to capital with internal debt financing.

SUPPORTING ECONOMIC GROWTH IN WINNIPEG

As part of the 2022 budget, the city is proposing a six-year $2.9 billion capital investment plan that it says will," support growth while also supporting the City of Winnipeg's multi-year recovery from the global pandemic."

Of the $2.9 billion, $95.4 million will be used for the southwest sever interceptor, with the city saying this project will support growth in the southwest part of Winnipeg.

The city will also pay roughly $20 million that will go toward Phase 1 A of the Airport Area West Lands located within CentrePort. This estimated $60 million project will allow CentrePort to reach more businesses and support growth in the transportation sector.

Other projects include $510.2 million for the Winnipeg Transit Master Plan, which would see investments from all three levels of government, $240 million go to combined sewer overflows, $27.3 million for fire stations in St. Boniface and Windsor Park, Waverley West, Silver Heights, and a mobile modular station, $28.6 million to be used on Winnipeg's tree canopy and $24.3 million for active transportation projects.

The city said the majority of these projects will be financed through federal grants and that the external debt from all of this will be $291.4 million. That is up from the $217.2 million that was projected last year. However, the city noted this within its debt limits.

RECOVERING FROM THE COVID-19 PANDEMIC

As part of the budget, the city is investing in a multi-year recovery plan from the COVID-19 pandemic.

The city is proposing $20 million to go toward recovery, with the city calling the recovery a "two-pronged approach."

The money will go toward supporting physical and mental health and helping Downtown Winnipeg recover.

Of the $20 million, $10 million will be for supporting underserved areas in the city. This includes improving regional parks infrastructure, adding splash pads and decommissioning or converting wading pools into playgrounds for safe outdoor activities and enhancing active transportation.

The other $10 million would be used for economic development projects focused on downtown revitalization.

The projects for this money would be chosen by city council.

FUNDING ROAD RENEWAL IN WINNIPEG

Road renewal continues to be a focus for the city as there is $164.7 million for local and regional road renewal.

There is also an extra $2.2 million that will be used for the regional roads program strictly for active transportation projects.

"In 2022, $12.6 million of the proposed two per cent property tax increase will be used to protect front line services rather than financing regional and local road renewals. The $12.6 million for regional and local road renewals will be funded through the City's share of the additional Canada Community—Building Fund," the city said.

With the money going toward roads, the city anticipates 143 lane kilometres to be renewed.

The projects include:

- Zoo Crescent and Conservatory Drive;

- Wall Street from St. Matthews Avenue to Notre Dame Avenue;

- Munroe Avenue from Raleigh Street to Henderson Highway;

- Jubilee Avenue from Osborne Street to Pembina Highway;

- Mountain Avenue from Arlington Street to McPhillips Street;

- Mattinee Bay;

- Leila Avenue from McPhillips Street to McGregor Street;

- William Avenue from Arlington Street to McPhillips Street;

- Stafford Street from Corydon Avenue to Pembina Highway;

- Archibald Street from Plinguet Avenue to Doucet Street;

- Sturgeon Road from Ness Avenue to Hallonquist Drive;

- Briar Cliff Bay;

- Moore Avenue from River Road to St. Mary’s Road;

- Winona Street from Kildare Avenue West to Regent Avenue West; and

- Chancellor Drive from Augusta Drive to Quincy Bay.

“Ensuring we have a safe, efficient road network will continue to be a key asset in the growth and prosperity of our city. Whether it’s for the transportation of goods, people in private vehicles, or residents riding Winnipeg Transit, everyone has an interest in the quality of our roads,” said Coun. Jeff Browaty, in a release.

The city noted the 0.33 per cent from the 2.33 per cent property tax increase will continue to be used for the Southwest Rapid Transitway.

INVESTING IN WINNIPEG'S TREES

As mentioned, the city plans on investing $28.6 to protect and enhance the tree canopy in the city as part of the capital investment plan.

As part of the 2022 budget, the city is proposing an increase of over $4 million in the operating budget, pushing the total to $31 million over the next two years.

"Winnipeggers care about the preservation of our tree canopy and that's why the Preliminary 2022 Balanced Budget update reflects that," said Mayor Brian Bowman in a news release.

Bowman added that the city continues to work on planting one million trees before the city hits a population of one million people.

OTHER NOTES FROM THE BUDGET

The city said the threshold for the Small Business Tax Credit will be pushed to $44,220, meaning 6,700 businesses will not pay business tax in 2022 and 55 per cent of all Winnipeg businesses will be receiving a full credit on their taxes.

The business tax will stay at 4.84 per cent in 2022.

"The 2022 Preliminary Balanced Budget update strikes the right balance to manage our way through ongoing uncertainty of financial waters in the global pandemic, while simultaneously providing a sustainable fiscal blueprint to support our growing city," said Bowman.