Murray, Motkaluk peddling tax-freeze nonsense to win votes By: Tom Brodbeck Posted: 7:00 PM CDT Thursday, Oct. 20, 2022

Opinion

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This article was published 20/10/2022 (833 days ago), so information in it may no longer be current.

Freezing property taxes at city hall would be the single most destructive step any new mayor of Winnipeg could take. It would result in deep service cuts and a further erosion of the city’s already-crumbling infrastructure.

Yet, mayoral candidate Glen Murray – who has plummeted in public opinion polls after allegations of sexual harassment and dismissal from a former job in Calgary surfaced last month — is now proposing to freeze taxes. It is a desperate and reckless bid to shore up support in the dying days of a campaign that ends Wednesday.

City hall has been running a structural deficit for more than a decade, after property taxes were frozen and reduced between 1998 and 2011, including a six per cent cut under Murray when he was mayor between 1998 and 2004.

To offset the shortfall, the city has increased borrowing, sold off assets and drawn down reserve accounts — steps that are not sustainable. The city has found savings in some areas, including slowing the growth of labour costs. There are opportunities to reduce expenditures further, but nowhere near enough to offset rising cost for core services.

The city has no choice but to raise property taxes, at least modestly (as all major Canadian cities have), to keep up with those costs. Unlike senior levels of government, the city doesn’t have growth revenues, such as sales and income taxes, to pay for rising expenditures. Until it does, it has to make do with property-tax increases.

The COVID-19 pandemic and soaring inflation has further eroded the city’s bottom line. One of the biggest challenges facing council over the next two years will be to figure out how to pay for rising salaries, as unions representing more than 10,000 city staff demand higher wages to offset rising prices.

One of the biggest challenges facing council over the next two years will be to figure out how to pay for rising salaries, as unions representing more than 10,000 city staff demand higher wages to offset rising prices.

CUPE Local 500, which represents close to half of those workers, struck a tentative deal last week for a new contract that’s expected to include inflation-adjusted wage hikes. The police union, whose contract expired Dec. 31, is in negotiations with the city and will undoubtedly win hefty salary increases (through binding arbitration, if necessary). Three other collective agreements expire next year, including the United Firefighters of Winnipeg, who have endorsed Murray and are campaigning on his behalf; they will expect payback. The collective agreements of the Amalgamated Transit Union, which represents bus drivers, and WAPSO Local 162, which has a membership that includes engineers, city planners and programmers, also expire in 2023. All will expect inflation-adjusted salary increases.

Collective agreements aren’t the only city costs impacted by a jump in the consumer price index which, in Manitoba, was 8.1 per cent in September. Fuel and energy, equipment and supplies, insurance premiums and contractor expenses are all going up. The next few years will be the most challenging financial period in recent history for city hall, especially after several years of frozen grants from the provincial government.

Jenny Motkaluk is the only other candidate in the mayoral race calling for a tax freeze. Her platform is even more unrealistic than Murray’s. She wants to abolish photo radar, but hasn’t said how she would replace the approximately $10 million a year it generates in net revenue. She also pledged to freeze the salaries of city staff who earn over $75,000, including cops and firefighters which, in most cases, would be unlawful, as the vast majority of them are employed under collective agreements. Motkaluk has presented no financial projections to show how she would freeze taxes and eliminate photo radar while keeping city hall solvent. Her grasp of city finances is pitifully weak.

If Murray or Motkaluk believe they can freeze taxes while still investing in important city services (including the long list of spending initiatives Murray has proposed during the campaign), they should provide voters with detailed financial projections to support their plan. They won’t, because they can’t. What they’re proposing are fairy tales — preposterously unrealistic sets of promises designed solely to mine votes.

It would be utterly foolish to freeze taxes. Anyone with a cursory understanding of city hall’s finances knows that.

tom.brodbeck@freepress.mb.ca

Tom Brodbeck
Columnist

Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.

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