Manitoba

As budget clouds loom, Winnipeg city council votes to freeze sewer and water rates

A $40-million hole in provincial infrastructure funding from last year is setting up a municipal budget day on Friday that could include a property tax increase of more than nine per cent in 2019.

Finance report confirms $40-million hole in provincial funding and uncertainty about other support

Winnipeg city council voted for a water rate freeze but Friday's budget could include a big tax hike. (Sean Kavanagh/CBC)

One day before the unveiling of a municipal budget expected to walk a tightrope between big tax hikes and cuts to infrastructure funding, Winnipeg city council offered ratepayers a break on Thursday.

At its monthly meeting, councillors debated and passed a sewer and water rate freeze for 2019, recognizing years of hikes well above the rate of inflation.

Mayor Brian Bowman called the freeze "a pause" as the city seeks agreements from the other levels of government to fund massive upgrades to Winnipeg's sewage plants — a project now moving from planning to construction.

As the regulator for water issues, the province had ordered the upgrades in 2003, under the former NDP government.

As yet there are no firm commitments from either the provincial or federal governments to help fund the estimated $1.4-billion cost to upgrade the North End Water Pollution Control Centre.

Along with the sewer and water freeze, council chugged through an agenda that included new regulations for vehicles for hire and a new relationship with regional First Nations and municipalities.

$40M shortfall

But the biggest cloud looming over Thursday's meeting was a $40-million hole in the city's finances, setting up a municipal budget day on Friday that could see property taxes in Winnipeg rise by more than nine per cent in 2019.

As councilors debated a relatively modest agenda, an update to the city's finance committee was posted, outlining a gap in infrastructure funding from the province of Manitoba.

The provincial grant funding update, written by city chief financial officer Mike Ruta, says the provincial government will not forward $40 million in previously committed funds that were part of the city's 2018 budget.

"The city will incur a $40-million shortfall in anticipated provincial funding relating to roads and streets in 2018 as a result of the province's most recent communication concerning 2018 funding," Ruta wrote.

In addition to the shortfall for capital projects, the province froze transfers for operating expenses in 2016.

'What is clear is how unclear the support is': Bowman

Bowman told reporters Wednesday the gap has forced the city to consider three unpalatable options: cut projects, take on more debt or raise property taxes 7.1 per cent over and above the 2.33 per cent he already said they would increase.

"What is clear is how unclear the support is [from the province] for capital projects," Bowman said at the lunch break during city council's meeting.

The finance update also suggests the province might not provide another $33.6 million in capital grants that the two levels of government are currently discussing.

Bowman said his administration understands and applauds the Progressive Conservative government's efforts to balance its books, but the city needs clear indications from the province of what's coming in order to set its own budget.

"We're not pounding the desk for money, just clarity," Bowman said.

Mayor Bowman has made choices.… We expect taxpayers will hold the mayor and council accountable for their decisions.- Finance Minister Scott Fielding

In January, the provincial government asked the municipality to consider transferring $34.4 million from the water and waste utility to fund roads and other projects. 

The province has now backed away from that request.

Waverley West Coun. Janice Lukes said she hasn't been part of the budget deliberations, but she doubts a tax increase of that size would go anywhere.

"Very few people on council would vote for a 9½ per cent tax increase. I think there is other options we can do, and I think to throw that out there is rather disingenuous," Lukes said.

Manitoba Finance Minister Scott Fielding continued his war of words with Bowman on Thursday, issuing a statement saying the mayor and council are responsible for managing their own budget.

"The decision to increase taxes is their responsibility — and theirs alone," Fielding said in the statement.

"Mayor Bowman has made choices. His council and administration have made choices. We expect taxpayers will hold the mayor and council accountable for their decisions."

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