‘This time, it’s different,’ Winnipeg mayor says as he makes plea for new funding model from province

Posted on October 22, 2024 by Peggy

Scott Gillingham acknowledges he’s far from the first mayor of Winnipeg to try to squeeze more money out of the provincial government, but he insists the need is only becoming greater.

“I know you’ve heard mayors stand in front of events like this before and in the past and say we need a new funding model,” Gillingham told an audience of business leaders at a breakfast event Tuesday.

“But folks, this time it’s different.”

The city is no longer “talking about trying to get funding for bells and whistles of legacy projects,” he said. “We’re talking about funding for basic services like pipes, pavement and police.”

The experience of trying to build budgets under tight economic circumstances has influenced his approach to lobbying the provincial government, Gillingham told the 2024 Leaders’ Forum on Growing the Economy at Canad Inns Polo Park, organized by several business organizations in the city.

Gillingham said he wants a new financial model that would give the city a form of revenue that grows with the economy. While he didn’t provide examples, some options could include a share of the provincial sales tax or gas tax.

‘Open conversation’ with NDP

He said he’s had an “open conversation” with the NDP government about a new funding model, but he wants to see progress.

“Now is the window of opportunity, but I’ll be frank, the City of Winnipeg and I need your help to continue to advocate for a model that positions Winnipeg for long-term success,” he told the business crowd.

As it stands, the city’s revenue sources are limited — it charges property taxes and some user fees, while receiving grants from senior levels of governments.

Gillingham told the audience that means that unlike cities, provincial and federal governments see the benefits of investing in economic growth relatively quickly.

For example, they can collect taxes from a construction worker filling up on gas or buying supplies, while “the City of Winnipeg has to wait until the pipe’s in the ground, someone comes in to build a widget-making factory, builds their building, and the assessed value of that property goes up and they start paying property taxes,” Gillingham said.

“Our return of investment on an economic investment takes years and years to begin to recoup.”

Province also ‘feeling the strain’: minister

In its first budget this past spring, the provincial NDP government promised to create a new multi-year funding model for municipalities, but so far it hasn’t said how.

Municipal Relations Minister Ian Bushie stressed the province is facing its own fiscal issues.

“We can appreciate the financial challenges that the City of Winnipeg, and many municipalities, are facing from years of frozen municipal funding,” Bushie said in a statement, referring to a period of stagnant funding from the previous Progressive Conservative government that ended in 2023.

“Our government is also feeling the strain,” he added. The province’s deficit was just under $2 billion for the fiscal year that ended in March.

Bushie said the province has responded to municipalities’ calls for “predictable, stable funding” by increasing grant funding according to inflation. As well, some Winnipeg infrastructure projects are being funded beyond the annual grant the province gives the city, he said.

Paul Thomas, a professor emeritus of political studies at the University of Manitoba, said he doesn’t expect the NDP government to grant all of the city’s wishes, even if discussions between the two levels of government have been cordial.

“I think there’s more opportunity, but it’s a marginal gain that’s going to come to the city, if there’s one.”

WATCH | New funding model needed, mayor tells business leaders:

Winnipeg’s mayor pushes for new funding model as city faces fiscal crunch

3 hours ago

Duration 1:53

Scott Gillingham says he’s talking with the province about developing a better funding deal for his city, but the provincial government is so far non-committal.

The provincial government, which has warned of fiscal restraint, will face a difficult task to balance the budget by 2027, as it promised in last year’s election campaign, said Thomas.

Funnelling lots of money to municipalities may put the province farther behind its goal of slaying the deficit, he said.

“If I’m coming closer and closer to my promised balanced budget situation by 2027, is this the time to say, ‘Let’s give a large amount of money to the city government’?

“Knowing that the moment you do, that the other 140 local governments across the province will say, ‘You can’t be a extra generous to them and not treat us fairly.'”