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Winnipeg Transit projecting $29M shortfall due to coronavirus: city report

A city report is forecasting Winnipeg Transit will face a $29.1 million deficit by the end of 2020.
A city report is forecasting Winnipeg Transit will face a $29.1 million deficit by the end of 2020. Shane Gibson/Global News

Winnipeg Transit expects to end the year with a $29.1-million deficit due to the ongoing COVID-19 pandemic, according a new city report.

The city’s latest financial status and forecast report, which looks at the state of city coffers up to June 30, projects a year-end deficit in the city’s tax-supported operating budget of $700,000 and a total shortfall for all city departments of $29.9 million.

Read more: City of Winnipeg projecting more than $50M deficit due to coronavirus

Transit’s projected $29.1-million deficit is up from the $26.1 million forecast in the city’s last quarterly report.

Despite the grim projections, the report says measures taken to tighten spending during the pandemic have kept city departments from ending the year in a worse position. The report says the projected shortfall for all city departments would have been $67.5 million otherwise.

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“We can see through the second quarter of 2020 that the City’s COVID-19 Crisis Cash Flow Management Plan has been effective at stabilizing the City’s operations during this pandemic,” said Coun. Scott Gillingham, chair of the city’s finance committee in a release.

“However, we also know the pandemic has caused a significant drop in transit ridership and revenues for Winnipeg Transit. The financial situation for Winnipeg Transit will be an ongoing concern as we continue to assess the long term impact the pandemic may have on transit ridership levels.”

Read more: City of Winnipeg could be losing $12M monthly due to COVID-19: report

Winnipeg Transit saw a massive drop in ridership at the onset of the pandemic, which arrived in Manitoba in March. In April the city decided to temporarily lay off drivers and reduce bus service in an effort to save money.

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Regular service transit service resumed in August.

According to the report, which will be presented to the finance committee at a Sept. 15 meeting, the city plans to make up the shortfalls at Transit through transfers from the city’s Financial Stabilization Reserve Fund via the General Revenue Fund as necessary.

The report projects the fund’s balance to sit at $89 million by the year’s end.

Read more: Coronavirus: Winnipeg Transit Union calls for return to full service

The report also notes money promised for municipalities and cities through the federal government’s Safe Restart program has yet to be included in the city’s forecasts, as discussions with the province are ongoing about the pot of money.

In July, Prime Minister Justin Trudeau said the federal government will contribute $19 billion under the Safe Restart Agreement to help provinces fund things such as child care, contact tracing and personal protective equipment.

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There is also money to bail out municipal governments.

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Manitoba Premier Brian Pallister has said Manitoba’s share works out to roughly $380 million, but there’s been no word yet on how much would go to the city.

Read more: Manitoba premier says provinces stuck together to get federal coronavirus help

City officials will also present councillors on the finance committee with an updated analysis of the effects COVID-19 has had on the city at the upcoming meeting.

A release from the city says the analysis uses new economic data to report on the early impacts of the pandemic on business, employment, housing, and other areas and proposes “forecasted scenarios” for unemployment rates and GDP growth in a range of outcomes during the ongoing pandemic.

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“The data we have today shows that the initial impact of the pandemic on lives and livelihood in Winnipeg is real and quite substantial,” said city economist, Tyler Markowsky, in the city’s release.

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“Overall, the economy has seen a historic shock, and specific citizens and industries have been hit at a historic rate.”

Read more: Hundreds of City of Winnipeg employees temporarily laid off due to coronavirus

The analysis shows significant job losses across most industries, but especially in accommodation, food services and transportation. It finds there’s been “harsh impacts” for Winnipeg, especially among young, female, and those who are most financially vulnerable.

It also says data shows the pandemic has led to a drop in immigration into Winnipeg, and amends the city’s projected population growth expected this year. It now forecasts Winnipeg’s population to be 771,400 by the end of 2020, down 3,000 people from the previous population forecasts.

— With files from The Canadian Press

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