The City of Winnipeg says it could be losing as much as $12 million a month due to the COVID-19 outbreak.
The city gave the estimate of lost revenue in a report analyzing and planning for how the pandemic could impact Winnipeg’s economy.
“A crisis cash flow management plan has been developed in an effort to navigate the city’s finances through the economic storm created by COVID-19,” Coun. Scott Gillingham, chair of the city’s finance committee, said in a release on Tuesday.
“The plan is informed by economic information, analysis and projections and may need to be adjusted in the future as the financial impact of the pandemic is constantly evolving.”
The city looked at a range of plausible outcomes for the course of the pandemic in its plan and used economic markers to estimate three levels of economic impact on unemployment and gross domestic product: best case, worst case and somewhere in between.
Even under better circumstances, the city’s unemployment rate spikes to 12.1 per cent and the number of people without a job at the end of the year surpasses 57,000.
However, in that scenario, Winnipeg’s GDP growth rebounds to higher levels in 2021 than what was originally predicted.
If the impact of the pandemic is high, the city could have more than 75,000 people out of work by the next year, resulting in an unemployment rate of 15.6 per cent, and GDP would shrink again.
The calculations in the plan, which can be found here, don’t account for new government policies or employment that may be announced going forward.
“The economic landscape is constantly changing during the pandemic and the data in the analysis may change in the coming weeks and months,” city economist Tyler Markowsky said in a release.
“In our analysis, we found that the financial impact of COVID-19 on Winnipeg is real and likely quite substantial.
“Once economic data is released from Statistics Canada and other official outlets, we can begin to assess the various impacts COVID-19 has had on Winnipeg’s economy in greater detail.”
The city said its 2020-23 multi-year budget, passed earlier this year, leaves Winnipeg’s financial future better planned than other jurisdictions.
In the short term, the city said it can rely on its nearly $108-million rainy day fund to deliver all primary city services while strategies are devised to make up for the estimated $12 million in lost monthly income during COVID-19.
“The Crisis Cash Flow Management Plan maintains the city’s recently adopted 2020 capital program which is set to invest $369 million in important capital projects,” said Gillingham.
“This investment will assist to stimulate the struggling local economy and is estimated to provide over 2,300 jobs. To make significant cuts to the 2020 capital budget would further exacerbate the challenges our local economy is currently facing.”
The city says the plan recommends sustaining employment and working with federal and provincial governments to gradually reopen closed sectors in the local economy.
Over the long term, it says capital investment programs will play an important part in economic recovery, something all three levels of government will need to be a part of.
According to the report, the city is considering a number of measures to reduce spending if the situation gets really bad.
That could include temporary wage reductions for all employees, service reductions and even layoffs.
Earlier this month city councillors voted to defer property and business taxes for Winnipeggers during the outbreak, a move estimated to cost the city $5.2 million in revenue.
At the time, a city report projected a budget shortfall of $32.7 million if the pandemic continues to impact city finances until the end of April, increasing to $73.2 million if the impacts carry on until the end of July.
Last week, the city announced that 674 non-permanent staff working at city-owned and -operated rec centres, pools, arenas and libraries closed during the pandemic would be temporarily laid off.
The analysis released Tuesday will be presented to council’s finance committee at its April 27 meeting.
Questions about COVID-19? Here are some things you need to know:
Health officials caution against all international travel. Returning travellers are legally obligated to self-isolate for 14 days, beginning March 26, in case they develop symptoms and to prevent spreading the virus to others. Some provinces and territories have also implemented additional recommendations or enforcement measures to ensure those returning to the area self-isolate.
Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.
To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out.
For full COVID-19 coverage from Global News, click here.
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