There’s Only One Taxpayer

There is only one taxpayer, and it’s important to understand how your tax dollar is invested. I’ve attached some great reports* that go into how your tax dollar is spent in more detail – but will summarize the general concept

Whether its roads, bridges, sewer systems, community centre’s and more – Winnipeg’s infrastructure is aging and is under significant pressure.  Council is working through the final meetings of preparing and presenting a four year budget (2024-2028) and even though the budget is proposing a tax rate of 3.5% increase per year, there are still significant challenges we are facing.

Winnipeg is a ‘municipality’ in the Province of Manitoba. Municipal governments in Canada rely primarily on three fiscal tools as a source of funding – Winnipeg relies on :

  • property taxes,
  • user fees and
  • federal and provincial transfers

It is estimated* for EVERY tax dollar a resident pays (to City, Province & Federal government) :

  • ~ 10  cents  goes to the City
  • ~ 40 cents goes to the Province
  • ~ 50 cents goes to the Federal government

FACT: Municipalities manage and maintain approximately 60 percent of the public infrastructure and amenities that drive our economy and quality of life in Canada. Local governments make people’s lives better, and local solutions have significant regional, provincial and national impact.

But the reality is that municipalities are constantly doing more with less, and unsustainable fiscal tools make it hard to plan for the longer term.

  • City governments can only raise taxes so much
  • City governments can only increase user fees so much
  • Cities do not have the final say in the amount of transfer funding the provincial and federal governments decide to transfer from their taxation revenues. (recall the Province of Manitoba froze the value of the provincial transfer for the past 7 years)

Receiving only 10 cents on every tax dollar, local governments face huge challenges in maintaining current infrastructure—and not to mention supporting growing needs. While it is always wonderful when Provincial or Federal governments help fund NEW infrastructure, for decades to come there is the ongoing cost of maintaining that infrastructure which cities must bear.

  • Property taxes, which account 38% of Winnipeg’s revenues, are not a viable source of increased revenues given the challenges many households face with stagnating wages and increased costs in a range of other areas such as transportation, energy, food and childcare.
  • Moreover, commercial and business tax revenues are starting to decrease as more people work from home vs in the office, and more retail is going online vs retail commercial space – resulting in less tax revenue for cities.
  • Same for user fees and licenses for goods and services which account for 35% of Winnipeg’s revenues. There is a limit in a struggling economy as to how much cities can raise these fees and licenses.

All of this is meant to highlight, Winnipeg is a city with old infrastructure;  old sewer and water pipes, old roads, and limited revenue generating opportunities. Yes, City Council does make decisions on how to invest your City tax dollars – and to be frank, Council aims to stretch investments as far as possible.

So, in closing, what is the solution? Municipalities must, and are having regular conversations with the Provincial and Federal governments to deal with growing populations .

The Federation of Canadian Municipalities and Canada’s Mayors are working with Provincial and Federal governments to secure more funding for municipalities.  They meet regularly and recently issued this new release : Mayors across Canada call on federal government for urgent investment in infrastructure to support the quality of life of Canadians

*Excellent reading material on this issue: