City of Winnipeg’s projected deficit continues to grow in latest financial forecast

The ongoing economic impacts of COVID-19, high fuel costs and bad weather are to blame for a growing projected budget shortfall forecasted for Winnipeg, according to a new city report.

The city’s latest financial status and forecast report, which looks at the city’s finances up to the end of November 2022, shows a projected operating budget deficit of $69.6 million and an additional shortfall of $13.7 million for Winnipeg Transit.

The projected deficit is up from the $56.8 million forecast in the city’s third-quarter financial report released in November. That report forecast a $17.2-million shortfall for Winnipeg Transit.

“The continued impacts of COVID-19 and significant over-expenditures in snow and ice operations are the main reasons for the City’s forecasted financial shortfalls this year,” Coun. Jeff Browaty, chair of the city’s finance committee, said in a release.

0:58 Snow, COVID-19 continue to hurt Winnipeg’s bottom line: report

According to the report, COVID-19 has led to an estimated $12 million in costs over and above the $41.3 million the city had anticipated the pandemic would have in its budget.

Then there was all the snow the city saw in the 2021-22 winter, which was made worse by the cost of fuelling snow-clearing equipment, the report says.

“The total over-expenditure relating to snow removal and ice control is forecasted to be $52.6 million for the year, which includes an over-expenditure request for December operations,” the city said in a release Friday.

“The report also notes fuel prices have escalated beyond what was anticipated in the 2022 budget update, which is largely impacting the operating budgets of Transit and the General Revenue Fund.

“The estimated financial impact in this forecast for fuel for the year is $11 million.”

Browaty noted that the latest update does not include the positive impact expected from recently announced federal money for municipalities, like Winnipeg, facing transit shortfalls.

0:28 COVID-19 continues to eat into Winnipeg’s budget, finance report shows

The province and Ottawa have reached an agreement that will see federal funding of $19.4 million come to Winnipeg.

“Even with this support, the City’s Financial Stabilization Reserve Fund may be left significantly depleted if it’s drawn upon to avoid a deficit in the General Revenue Fund,” Browaty said in the release.

“The limited resources left remaining in the Fiscal Stabilization Fund will need to be considered in the 2023 annual budget update.”

The financial status and forecast report will be presented to the finance committee Jan. 12.