Winnipeg needs a ‘new fiscal deal,’ chief economic officer: MHCA

The City of Winnipeg’s 2024 budget clearly illustrates the city’s constrained ability to raise revenues necessary for services citizens demand and the solution lies in striking a new fiscal arrangement with the province that considers new revenue sources, the MHCA says.

The recommendation is among a number in MHCA’s Budget 2024 submission, to be presented to the Public Works Committee, at a special meeting March 1 to hear public delegations.

MHCA President & CEO Chris Lorenc will stress to the Committee that the revenue shortage issue will be keenly felt as Winnipeg’s population grows to 1 million within the next 25 years.

The additional pressures the growing population will place on our transportation system (and underground utilities) must be recognized in planning and finance forecasting,” Lorenc notes in his submission.

“We are not investing sufficiently to maintain the system we have now – the last analysis (2018) saw 40% of our street system rated as fair to very poor, requiring $1.283 billion in work to bring existing roads to good condition. (That) does not consider the transportation infrastructure Winnipeg needs to accommodate population growth; it does not consider building out the city’s broader economic growth potential.”

The City needs a “new fiscal deal” that allows for new sources of revenue and sets a fairer fiscal arrangement with the province to account for the fact municipalities own more than 50% of public infrastructure, but raise just 10 cents of every tax dollar.

The MHCA is in discussions with Mayor Scott Gillingham and councillors, including Public Works Committee Chair Janice Lukes, about the 2024 budget for the local and regional street renewal program.

This year, the streets budget is $17 million less than 2023’s program budget. As well, the budget forecasts less investment in street renewal over the next five years, compared to the 2023 forecasts. Last year, Council approved using the local and regional street renewal reserves, built from the revenues of the 2% annual tax hike, for other priorities attached to road construction, including pedestrian and cycling facilities, tree canopy restoration and road safety.

“We cannot imagine the city Winnipeg can be by parsing ever more finely the pennies that flow to general revenues. While we understand why, frankly we should not be cutting revenues to street renewal in future years to improve the tree canopy, or to maintaining bridges because the outcome weakens the fund’s intended purposes and as a consequence none of the priorities will be well served,” the MHCA submission says.

It stresses that each of those priorities is important to creating a liveable city, but “the street renewal reserve doesn’t have the capacity to meet the needs of our bridges and tree canopy; our active transportation routes and traffic safety engineering – and raising frontage fees annually is equally unsustainable. The tree canopy and bridges deservedly require revenue stream(s) tied to program objectives.”

MHCA makes six recommendations to the Public Works Committee:

1. Update the condition and needs of the transportation system, the life-cycle and replacement costs, along with a service-level expectation of our local and regional roads
2. Follow up on the Committee’s June 26, 2023 commitment to strike a working group to review and refine the multi-modal funding strategy’s options, including financial forecasts, revenue demands and levels of service, in time for the next phase of the 4-year balanced budget cycle.
3. Plan for new growth – where new infrastructure is needed to serve a growing population
4. Support the necessary investments with a long-term financial plan equal to the challenge
5. Put economic growth as a critical investment criterion of the updated Transportation Master Plan, recognizing that the investments with higher return to our GDP seed economic growth and support sustainable funding to the recreational and cultural amenities that make a city great.
6. To support and enable the above, including the referenced need for a New Fiscal Deal, appoint a Chief Economic Development Officer, equivalent or reporting to the CAO, to ensure a “whole of government” approach to growing Winnipeg’s economy.