WINNIPEG -- A new report out of the City of Winnipeg is analyzing the potential economic impacts of the COVID-19 pandemic.

During a news conference at City Hall on Tuesday, Mayor Brian Bowman, Coun. Scott Gillingham and Paul Olafson, Interim Chief Financial Officer, announced the new analysis.

According to Gillingham, who is the chair of the standing policy committee on finance, the city has also developed a ‘Crisis Cash Flow Management Plan.”

“COVID-19 continues to impact the City of Winnipeg revenues and expenses, services and, of course the local economy," Gillingham said. "A cash flow management plan has been developed in an effort to navigate the city's finances through the economic storm created by COVID-19."

In its analysis, the city used economic markers to estimate the economic impact and how it will affect unemployment and gross domestic product (GDP).

The city said it’s anticipating a range of possible economic outcomes.

The first scenario assumes a July/August recovery with the unemployment rate increasing to 12.1 per cent representing 57,400 people in 2020, then dipping to 10.3 per cent representing 49,700 people in 2021.

The medium scenario assumes a second wave of COVID-19 in December with physical distancing again to April 2021. Unemployment would increase to 12.9 per cent in 2020 representing 61,400 people, and 13.8 per cent in 2021 representing 66,900 people.

The high version assumes a more severe second wave resulting in an unemployment rate of 15.6 per cent in 2021 representing 75,100 people.

The report projects a budget shortfall of $78.1 million if the pandemic event is over by the end of August, and the city’s rainy day fund could be drawn down from $107.8 million to $50.5 million.

"We do believe it is important to share the plan with the public today, because these are public finances we are managing," Gillingham said.

“The economic landscape is constantly changing during the pandemic and the data in the analysis may change in the coming weeks and months,” said Tyler Markowsky, city economist, in a statement. 

“In our analysis, we found that the financial impact of COVID-19 on Winnipeg is real and likely quite substantial. Once economic data is released from Statistics Canada and other official outlets, we can begin to assess the various impacts COVID-19 has had on Winnipeg’s economy in greater detail.”

The city noted its financial future is well-planned due to the recent passage of the 2020-23 multi-year balanced budget.

But for the short term, the Financial Stabilization Reserve is giving the public service the funds to provide primary city services while strategies are being created to manage reduced revenues, which the city said is about $12 million per month.

For the time being, the city noted, municipal governments are being advised to sustain employment and work with other levels of government to coordinate the re-opening of closed sectors. As for long-term solutions, the city said capital investment programs are an important part of economic recovery.

“The Crisis Cash Flow Management Plan maintains the City’s recently adopted 2020 capital program which is set to invest $369 million in important capital projects,” said Gillingham in a statement. 

“This investment will assist to stimulate the struggling local economy and is estimated to provide over 2,300 jobs. To make significant cuts to the 2020 capital budget would further exacerbate the challenges our local economy is currently facing.”

But the financial analysis presents a list of options “under consideration.”

  • Other service layoffs/reductions
  • Temporary wage reductions
  • Defer Capital spending to 2021
  • Use impact fee ($30 million) and “environmental projects” ($166 million) reserves

The analysis can be found online and will be presented to the standing policy committee on finance on April 27. 

Bowman said this report is to be received as information.