Hefty Winnipeg property tax increase to pay for snow clearing, cover transit, fire-paramedic shortfalls

Posted on December 11, 2024 by Peggy

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.

A thick coil-bound book sits in the forground, with two men seated at a table in the background — The draft 2025 budget proposes a 5.95 per cent property tax increase, with overall city spending on operations rising $65 million to $1.42 billion, and capital spending going up $48 million, to $655 million this year. (Catherine Moreau/Radio-Canada)

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 $6 million this year, to $339 million, and will account for 27 per cent of all city spending on operations.

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. Most of those officers would also not arrive until 2026 or 2027.

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.

A man sits at a table in front of a microphone. — The city needs more revenue, ‘and right now we have to raise it ourselves,’ Gillingham said Wednesday. (Catherine Moreau/Radio-Canada)

“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.

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 $6 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.