Snowfall, pandemic add to massive city deficit

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This article was published 05/01/2023 (719 days ago), so information in it may no longer be current.

The City of Winnipeg is expecting a massive deficit after a barrage of snowstorms, soaring inflation rates and sustained pandemic losses.

Based on financial data up to Nov. 30, 2022, the city expects to complete last year with a $69.6-million deficit in its tax-supported operating budget, while Winnipeg Transit forecasts a separate $13.7-million shortfall.

“As far as I know, this is record-setting in terms of the level of deficit. But (it’s) to be expected… In one year, (the) multitude of challenges (we had) is quite shocking, so obviously we’re hoping for more sustainability and predictability in 2023,” said Coun. Jeff Browaty, chairman of council’s finance committee.

Mother Nature played a key role in the shortfall, with Winnipeg’s 2022 snow-clearing budget now projected to hit nearly $79 million, about $44 million beyond the original budget of roughly $35 million, based on data available by the end of November.

“I took a winter holiday (in early 2022) and coming back and seeing the amount of snow on the side of the roads, it was jaw-dropping. I’m a lifelong Winnipegger, I certainly can’t recall seeing anything to that extreme (before),” said Browaty.

The city’s public works department is already warning that snow-clearing costs could climb even higher due to ample precipitation in December, with costs for that month still being tabulated. The department is now asking council’s finance committee to approve another $8.4 million of spending to cover snow and ice control costs, if the December costs exceed the amount set aside for that month.

If that extra cash is needed, as Browaty expects it will be, the city’s overall deficit would grow even higher.

COVID-19 wasn’t kind to city finances either. While the city’s 2022 budget plan anticipated $41.3 million worth of pandemic-related costs and revenue losses, when compared to Winnipeg’s original 2020 to 2023 multi-year budget, that tab is now expected to rise by an additional $12 million.

“Earlier in the year we weren’t maybe forecasting the degree of impact that we’d see from (the) Omicron (variant) at the time. That really required a lot of additional employees to come on in overtime for some of those services that had to keep operating no matter what, such as fire, police (and) transit,” said Browaty.

A city report notes the Winnipeg Fire Paramedic Service, Winnipeg Police Service and several other departments all expect to end 2022 with budget shortfalls. The city did find some savings, partly through reduced staffing costs in the community services department and COVID cost-cutting strategies. Those “financial levers” included new limits on travel and discretionary spending, as well as delayed hiring for some city staff positions.

On the upside, Browaty noted the city expects to soon receive some financial help for Winnipeg Transit. The finance chairman said the federal government has confirmed it will provide $19.4 million to ease the service’s pandemic-related losses. And the city expects about $12.4 million of transit support from the provincial government, pending approval in Manitoba’s 2023 budget, Browaty said.

Since the city does not have the money yet, that senior government assistance has not been factored into the expected deficit.

Winnipeg Transit ridership has yet to rebound to pre-COVID levels.

Meanwhile, the city is expected to take a substantial withdrawal from its financial stabilization reserve to cover the 2022 shortfall, forcing that “rainy day fund” to plummet to $10.8 million, or $60.9 million lower than its council-mandated minimum level.

Browaty said the 2023 budget will weigh in on how best to restore that fund, a recovery that may take multiple years to achieve.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga