Winnipeg's finance chair says city budget can weather economic storm
Stock markets and oil prices plunge as coronavirus wreaks financial havoc
The city's budget predictions released last Friday can weather the turbulence blowing through the economy, says finance chair Scott Gillingham.
Gillingham spoke after a budget presentation to the Winnipeg Chamber of Commerce on Monday, while coronavirus fears and falling oil prices had led to "panic selling" on North American stock markets and worsening fears of a global recession.
He was there to discuss the city's four-year budget, with a mix of cuts to grants to community groups, more spending for road improvements and the continuation of a promise by mayor Brian Bowman to keep property tax increases to 2.33 per cent per year.
Gillingham said the effects of the coronavirus outbreak on the economy were impossible to anticipate in the months leading up to tabling the budget last week.
"How can you predict that? There are things that just come out of seemingly left field you could never contemplate," Gillingham said.
But the finance chair says the city has cash reserves of over $100 million to help it through rough financial times.
"We do have some room to manoeuvre. Right now our financial stabilization reserve has a healthy balance in it. I think this is one of the advantages though of longer term budgeting, is there is a level of certainty and predictability," Gillingham said.
The president of the chamber of commerce sees some turbulent times coming for everyone.
"You know, when you take a look at threats, obviously this is a new threat to not just organizations, companies, people's portfolios, but governments right across the board," Loren Remillard said.
However, Remillard agreed with Gillingham; the city has put itself in a decent position.
"The one area — and credit to city hall — the cost control measures that have been implemented via collective agreements, via successive budgets, has put them in a good position to better respond to those threats," Remillard said.
There are other factors beyond control of civic politicians that could also significantly impact the city's revenues.
The recently-released budget depends on money from what the city calls impact fees, which it charges developers for growth in the city's far-flung suburbs.
Yet the money from those fees, more than $30 million collected so far, is subject to the city winning a court case launched by the developers.
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The city is also banking and spending millions in savings from re-negotiating the pension benefits for police officers — a decision hotly contested by the Winnipeg Police Association and the subject of an arbitration case.
"We'll let those cases work their way through the courts and respond accordingly when needed," Gillingham said.