Does the City of Winnipeg really need more revenue — either through new taxes, beefed up provincial grants or both — or could it find enough savings internally to pay for the growing costs of front-line services and infrastructure renewal?
That’s a question I get asked often. Sometimes I’m lectured on the topic. The city doesn’t have a revenue problem, some argue, it has a spending problem.
There was a time when I agreed with that proposition, when expenditures at city hall had few controls. Salaries and benefits — especially within the police service — were growing in leaps and bounds and spending in many areas was unsustainable and wasteful.
MIKAELA MACKENZIE / FREE PRESS FILES
The city of Winnipeg is under pressure to deal with crime and has spent money to do so, including hiring security personnel on city buses.
That has changed in recent years.
There is still waste at city hall, as there is in any government — indeed in virtually every organization, public or private. However, much has been done in recent years to curb spending at city hall, especially within its workforce.
I am presented with endless ideas from people on how the city can find savings. But those ideas are often uninformed or based on erroneous assumptions.
The list is long: city hall should reduce the number of managers or supervisors it employs, contract out more services, reduce the size of work crews, cut back on policing, improve the tendering process, etc. If it did, it wouldn’t be in the financial pickle it’s in, I’m told.
Maybe, but most of those suggestions are unresearched and not grounded in reality. At the end of the day, city hall does have to employ enough people to run its operations. But it has also reduced spending growth on its workforce in recent years.
Let’s look at the numbers.
From 2008 to 2013 when spending at city hall was poorly managed, salaries and benefits — the city’s single largest expenditure line — soared 29.2 per cent from $565.1 million to $730.1 million.
From 2013 to 2018, salary and benefits climbed only 17.9 per cent ($730.1 million to $860.6 million).
The city continued to curb workforce costs from 2018 to 2023. Salaries and benefits grew by 15.9 per cent during that period to $997.6 million.
It should be noted that during this last period, inflation grew significantly and was 7.8 per cent in Winnipeg in 2022, meaning the city was under pressure to raise salaries higher than normal, yet still saw a decline in workforce spending growth.
Could those costs be whittled down further? Perhaps. But at three per cent a year, on average, in total workforce spending growth over the past five years (not adjusted for inflation or population growth) there’s not much left to cut.
Improvements can be made, such as hiring more firefighters to reduce overtime costs, but it’s not going to solve the city’s larger financial problems.
There are some areas such as policing, for example, where the city has very little flexibility, since wage settlements ultimately go to binding arbitration if a negotiated deal cannot be reached. Despite that, the city has substantially reduced labour costs in policing in recent years, both in salary increases and by cutting the police complement. City hall is now being urged to increase that complement as violent crime and retail theft continue to grow.
The city is also under pressure to solve other crime problems and has spent new money in other areas to do so, including hiring security personnel on city buses.
The shocking growth in homelessness and the need for more affordable housing is also putting significant strain on city finances. Most of those costs should be borne by the province, but at least some of it lands on the city’s lap.
Meanwhile, Winnipeg Transit is facing a chronic shortage of bus operators and may have to increase wages and benefits to recruit and retain more drivers, so the city’s transit system doesn’t deteriorate further. Add in the fact that the city continues to struggle with a massive infrastructure deficit and it’s easy to see how access to more diversified revenues, including growth revenues, is unavoidable.
City hall has nearly drained its financial stabilization fund and is running out of options to pay the bills.
City council should never stop looking for savings and efficiencies within its operations. No organization should. But it’s naive to think the city can solve all of its financial problems simply by cutting spending, unless people are willing to accept substantially fewer city services. The latter is simply not a realistic option.
tom.brodbeck@freepress.mb.ca
Tom Brodbeck
Columnist
Tom Brodbeck is a columnist with the Free Press and has over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.
Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.
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