City of Winnipeg raids rainy day fund to balance 2022 budget

The City of Winnipeg will dip into its rainy day fund, spend less hard cash on infrastructure and try to claw back on police spending next year in order to balance a budget hit hard by a drastic reduction in Winnipeg Transit ridership.

The preliminary budget released Friday — the eighth and last of Mayor Brian Bowman's two terms as mayor — will once again feature a 2.33 per cent property tax hike and a modest spending increase.

The property tax increase will cost the average homeowner another $43 in 2022.

The city plans to spend $1.195 billion on all services in 2022, an increase of $15 million from last year. That works out to a 1.5 per cent spending hike in a year where Winnipeg's overall inflation rate is 4.5 per cent, according to Statistics Canada.

Spending on infrastructure will rise more dramatically — from $386 million this year to $525 million in 2022 — mainly because of federal and provincial contributions.

The city scrambled to balance its operating budget because the pandemic is still keeping revenues down.

"The year of challenges and difficult decisions we faced through economic uncertainty ... has been like no other," Bowman said during a news conference ahead of the formal tabling of the budget Friday afternoon.

City finance officials are expecting a $41-million revenue drop in 2022.

That's because Winnipeg Transit ridership is still a third of what it was before the pandemic and people still aren't parking as often on downtown streets, paying to swim in city pools, using city recreation centres or spending money on events at IG Field, Canada Life Centre or Shaw Park.

To balance the shortfall, the city is drawing $10 million from its fiscal stabilization reserve and replacing about $5 million of cash spending on infrastructure with debt financing.

For all intents and purposes, the city has been reduced to relying almost entirely on debt and money from other levels of government to pay for infrastructure.

The city only intends to spend $3 million in 2022 in hard cash on roads, bridges, building and equipment, which is a drastic reduction from the $75 million it devoted to "cash to capital" spending in 2016.

Coun. Scott Gillingham (St. James), chair of the city's finance committee, said the four-year 2020-2023 budget plan had forecast $20 million in cash to capital spending each year.

"But the pandemic hit and, quite frankly, we're in an emergency," he said.