Winnipeg draft budget stands pat but shifts road revenues

The City of Winnipeg’s draft 2022 Operating and Capital Budget, released at the Executive Policy Committee today, sets out a total $164.7 million for local and regional street renewal next year, about $2-million more than the forecast published last year.

The real news in the budget, however, is that the local and regional program will not see funding from the revenues generated this year by the 2% annual tax hike, a levy put in place in 2013 and 2014 specifically to fund roads.

This year, those increased revenues – approximately $12.6 million in 2022 – will go to the operating budget, to help offset an estimated $43-million reduction in revenues. To backfill the $12.6 million, the budget draws the same amount from the federal gas tax fund.

The 2022 local and regional program is an increase of about $12.5 million compared to 2021.

The MHCA was given assurance from City officials the intention is to revert back, in the 2023 budget, to dedicating the 2% tax revenues to the local and regional street renewal reserves.

On that point, the Budget states: “In 2023, as the multi-year recovery from the pandemic continues, the 2.33 percent property tax increase would once again be invested in its entirety into road renewal and the Southwest Rapid Transitway, if adopted by Council.”

 MHCA President Chris Lorenc said he was dismayed by the decision to divert revenues from the 2% dedicated tax hike from road construction.

“We are justifiably alarmed by the decision,” Lorenc said.

“We understand hard decisions had to be made to deal with the impact on City revenues due to the pandemic, but the fact is this sets a dangerous precedent.”

Lorenc noted there has been pressure for a number of years to use the 2% tax revenues for purposes other than to repair and construct new regional and local streets, including allowing reserves to be used for bridge work.

The six-year total forecasted for local and regional road renewal is $872.9 million; last year’s six-year total was $864.1 million. The forecast shows dramatic reductions in the budget starting next year and on, due to the ending in 2023 of the accelerated regional road program ends. That accelerated program drew funding from the federal New Building Canada Fund, and was cost-shared by the three levels of government.

Other investments in the six-year capital plan include:

• $240 million to accelerate the City’s investment in the Combined Sewer Overflow mitigation program, a $60 million increase from the six-year forecast last year
• $95.4 million for the Southwest sewer interceptor, an increase of $35.4 million from the six-year forecast last year
• $24.3 million for active transportation projects across Winnipeg.

Other notable investments in the budget included:

• a full one-third cost share of approximately $20 million towards the estimated total cost of approximately $60 million, net of land purchase, to provide water and sewer services for Phase 1 A of the Airport Area West Lands located within CentrePort. The city’s funding support for this initiative will be conditional on securing matching financial support from both the federal and provincial governments for this project
• an investment of $3 million in the water and sewer utility to begin the investigation of existing underground water and sewer capacity starting with the most critical areas of the city. This will be the first step toward preparing a comprehensive strategic infrastructure plan for the city as a whole, to guide development and drive economic growth into the future, including the identification of trade and commerce enabling infrastructure