Construction groups tell City of Winnipeg to boost infrastructure spending

The City of Winnipeg is being lobbied by construction groups to use infrastructure spending as a fiscal stimulus in the wake of the pandemic and a massive slow-down in the economy.

Construction industry says economy shocked by COVID-19 needs boost

Shovel-ready projects need financial support from other levels of government and approval from city council. (Bartley Kives/CBC)

The head of the Manitoba Heavy Construction Association says jobs — not ideology — will help Winnipeg and Manitoba get through the growing economic crisis brought on by the COVID-19 pandemic.

Chris Lorenc warned councillors on the City of Winnipeg's finance committee on Monday there is a "lack of confidence in the economy by all sectors," and that way that could stimulate it would be by spending on infrastructure.

It's an opportune time to make the investments as competition in the the construction market is strong and prices are low, Lorenc said.

"As difficult as it is for the disciples of fiscal balance … this is not the time for rampant austerity," he said. "This is the time for stimulus to ensure or economy doesn't flatline."

His comments come as the provincial Progressive Conservative government tries to cut back spending on services it does not consider essential during the pandemic. Premier Brian Pallister has also proposed reduced work weeks for non-essential workers.

The Manitoba Heavy Construction Association is in discussions with the provincial government to accelerate investments in infrastructure, Lorenc said.

Manitoba Heavy Construction's Chris Lorenc is warning politicians that "this is not the time for rampant austerity." (Tyson Koschik/CBC )

Councillors on the committee were told a key piece in accelerating the city's infrastructure spending is the federal government, with it's expansive financial borrowing power.

Ottawa has already been asked by Canadian municipalities to help subsidize losses from the pandemic and there is hope the federal government will come through with funding for infrastructure to help stimulate the economy.

Paul Olafson, the city's interim chief financial officer, said there are a number of projects that could get put on a list, but they would have to meet financial criteria from the other levels of government and would be subject to city council approval before work could begin. 

"Ultimately any list of projects, whatever they may look like, [would] need to establish capital budgets and get council approval," Olafson said.

Impact of COVID-19 still unknown

The City of Winnipeg has a set of three scenarios that look at the economic impact of the pandemic and how the city could respond and protect its finances.

Those run from a best case, in which physical distancing rules are lifted through the summer and some kind of normal resumes quickly, to a worst case, in which a second wave of COVID-19 spreads, the economic damage deepens, and the city is forced to lay off more staff and dig deeper into its fiscal reserves.

City economist Tyler Markowsky told councillors it was simply too early to tell what impact the shutdowns will have on Winnipeg's economy.

Some of the more significant unknowns are the effect of a major slowdown in the energy sector —  specifically in the oil industry (where Manitoba sells a lot of goods and services) — and the damage that may occur to the city's service industries, Markowsky said.

"There are a lot of uncertainties: the effect on the economy, uncertainty of other government's policies. How will the public react to those?" he said.

Diversity in the provincial and city economies could help, but it may not isolate the city entirely from the effects of the pandemic, Markowsky said.

The economist told councillors Winnipeg's relatively low housing costs and low property taxes could help residents avoid some of the fiscal damage from the crisis.


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