5.95% property tax increase in Winnipeg budget ‘bare minimum’ to deal with revenue woes: prof

The City of Winnipeg plans to spend most of the revenue it raises from a major property tax hike to cover snow clearing, transit fare revenue shortfalls and fire-paramedic injuries.

The city plans to increase property taxes by 5.95 per cent, up from 3.5 per cent last year, according to the first draft of the 2025 budget, unveiled by Mayor Scott Gillingham Wednesday. 

“This is a really, really difficult decision,” Gillingham said during a news conference.

“I don’t take lightly that for the first time in years we have a tax increase of this amount, but I would rather do what I believe the citizens of Winnipeg need for the future than to try to protect myself … from public criticism.”

The hike means the municipal tax bill for a Winnipeg house assessed at $371,000 would rise $121 next year. The 5.95 per cent property tax hike would raise $44 million more for the city.

The budget calls for the additional revenue to help pay for a $5-million increase to the snow-clearing budget, backfill a shortage of expected Winnipeg Transit fare revenue and mitigate Workers Compensation Board expenses related to the Winnipeg Fire-Paramedic Service, among other targeted areas.

At the same time, the budget proposes a citywide pilot project next winter to see whether any cost savings can be achieved by waiting for 15 centimetres of snow to fall on residential streets before plowing begins. The current threshold that triggers snow clearing on residential streets is 10 centimetres.

This pilot project would start in the fall of 2025.

Overall city spending on operations is slated to rise $65 million in 2024, to $1.42 billion. That’s an increase of 4.8 per cent over the budget for 2024.

The budget forecast also calls for the city to hire 36 more police officers, but most would not be hired until 2026 or 2027. The police budget will increase $19 million this year, to $339 million, and will account for 27 per cent of all city spending on operations.

The Social Planning Council of Winnipeg’s Kate Kehler questioned whether that money could be better spent on crime prevention.

“We’re told that the calls for services keep going up, and that’s why they need more police officers,” Kehler told reporters.

“The problem is that a great deal of those non-emergency calls could be offloaded onto community-based organizations.”

15 new community safety officers

The budget also calls for the city to hire 15 new community safety officers over two years, expanding on a Gillingham campaign promise to improve safety on Winnipeg Transit buses. Seven of those officers would also not arrive until 2026 or 2027.

Kehler thinks it’s too soon for an expansion, since there’s been no evaluation yet to show the program — which launched last January — is working.

“It’s not even a year old … but they’re still going to get an expansion. And my question is, based on what evidence?”

Winnipeg’s capital budget — spending on repairs, maintenance, construction and equipment — will rise $48 million to $655 million this year. That includes $167 million budgeted for road repairs, an increase of $29 million over 2024.

Gillingham campaigned for mayor in 2022 on a promise to limit property tax hikes to 3.5 per cent a year, but has said in recent weeks the city finds itself in difficult financial circumstances.

“We have to continue to control costs, and we’re trying to do that,” he said Wednesday.

“But we’re at a point today, with the growth of our city, the demands on our services, the demand on our infrastructure, that we need more revenue, and right now we have to raise it ourselves.”

The city faces the prospect of having to backfill a projected 2024 deficit in next year’s budget, mainly using $7 million in new funding for Winnipeg announced by Premier Wab Kinew in November.

The 5.95 per cent property tax increase, the largest since a council led by then mayor Bill Norrie approved a 8.45 per cent hike in 1990, also comes as the city faces a financial crunch. Past budgets have drained the fiscal stabilization reserve, also known as the city’s rainy-day fund.

The budget calls for city finance experts to consider ways to mitigate future financial risks, now that the city has no rainy day fund.

No money for library’s community space

Aaron Moore, a political science professor at the University of Winnipeg, called the proposed property tax increase the “bare minimum” the city could get away with.

“They realized they had a problem, they need to fix it. And so we have this higher increase, but I’m not confident that this is going to negate the need for higher increases in the future.”

Others also raised concerns about the spending plan.

Mark Cohoe of Bike Winnipeg said he’s concerned about the city’s plans to raise the threshold for snow clearing.

“I think you’re going to find that getting to access to transit, getting to our bike network, is going to be a lot more difficult” if that goes ahead, he said.

The budget allocates $19.1 million for active transportation projects, up from $17.7 million last year — an amount Cohoe called “insignificant” in comparison to the city’s overall road budget.

The budget also calls for $60,000 to pay two seasonal staff for proactive cleanup of needles and weapons in city parks from April to October.

That stems from a motion by Daniel McIntyre Coun. Cindy Gilroy, which led to a report saying it could cost up to $260,000 to do the work.

Gilroy is concerned the difference between the budgeted amount and what the report called for might mean the work won’t continue over the winter.

“A lot of the parks are still used within the midwinter months. So we’re still seeing some of the same activity happening during the winter months that we are seeing in the summer.”

The budget also did not contain any funding to continue operations at the Community Connections space inside the Millennium Library, which is set to close at the end of the year. The space, staffed by librarians and community crisis workers, handled 45 per cent of all service requests at the downtown library, according to a recent report.

But City of Winnipeg finance chair Jeff Browaty doesn’t think the location of the space is the right fit.

It’s outside the metal detectors and security guards at the library’s entrance, “which in my mind is a safety concern for our employees and for the public,” the North Kildonan councillor said.

Kehler said she and others will continue lobbying the city to maintain the service, which she said improved safety.

“They were actually acting as a decompressor point for people entering into that library and making it a safer place for everybody. So to not fund it is somewhat backwards thinking.”

Council will vote on the budget some time early next year.

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2025 Winnipeg budget highlights

• Operating budget (spending on city services): $1.42 billion, up $65 million from 2023. That’s a 4.8 per cent increase.
• Capital budget (tax-supported spending on infrastructure and equipment): $655 million, up $48 million from 2023.
• Property taxes: Property taxes rise 5.95 per cent, up from a 3.5 per cent increase in 2024. The average homeowner will pay $121 more this year. This will raise an additional $44 million for the city. The frontage levy remains unchanged at $6.95 per foot.
• Total projected property tax haul in 2024: $798 million, which covers 56 per cent of city spending.
• Transit fares: Going up 10 cents on Jan 1. Adult fares for 2025 will be $3.35.
• Water and sewer dividend: $17 million diverted from water and sewer revenues to help balance the operating budget.
• Business tax: Rate remains 4.84 per cent.
• General fee increases: Five per cent across the board, with some exceptions.
• Police budget: $339 million, up $19 million from 2024.
• Fire-paramedic budget: $244 million, up $10 million from 2024. 
• ​Road repairs: $167 million, up $29 million from budget 2024.
• Snow-clearing budget: $46 million, up $5 million from 2024. A pilot project will look at saving money by waiting for more snow to fall before clearing begins.
• Pembina Highway overpass at Abinojii Mikanah: 17.4 million rehabilitation this year.
• Wheelchair securements on Winnipeg Transit: $9.6 million to retrofit buses.
• Fort Rouge transit garage: $7.3 million to replace deteriorating hoists.
• City of Winnipeg Archives: $6.6 million to complete renovation started last year.
• Fiscal stabilization reserve (rainy day fund): Will be wiped out this year. City finance experts have been asked to come up with a plan to manage risks.