1. Two Budgets, Two Visions, Two Cities Winnipeg

Contributors This Guide is the second step in a four-part Betty Braaksma Manitoba Library Association Canadian Centre for Policy Marianne Cerilli Alternatives-Manitoba Social Planning Council of Winnipeg Lynne Fernandez (CCPA-Mb) project to Canadian Centre for Policy Alternatives, Manitoba engage Winnipeggers in Jesse Hajer Canadian Community Economic Development municipal decision-making. Network Step One was a guide to George Harris the municipal budget Ian Hudson Department of Economics (which is available on University of Manitoba the CCPA website), Step Bob Kury Three will be an in-depth Dennis Lewycky response to this spring’s CCPA Board Member Lindsey McBain 2008 Operating Budget, Canadian Community Economic Development and Step Four will be our Network Alternative City Budget, to Tom Simms be released in the fall of Many thanks to Liz Carlye of the 2008. Canadian Federation of Students (Manitoba) and Doug Smith for their CANADIAN CENTRE FOR POLICY help with production. ALTERNATIVES-MB 309-323 Portage Ave. Winnipeg, MB Canada R3B 2C1 ph: (204) 927-3200 fax: (204) 927-3201 [email protected] www.policyalternatives.ca A Citizens’ Guide to Understanding Winnipeg’s City Budgets 1. Two budgets, two visions, two cities innipeg Mayor Sam Katz and his supporters on Winnipeg City Council have a vision for the city. They say that they wish to make the City attractive to Winvestors by eliminating the business tax and reducing the costs associated with running the City. Slowly, but surely, they are bringing their vision to life. The Mayor abandoned a planned rapid transit system for the City, turned garbage collection over to private corporations, and closed a community centre in a low-income community. It is a narrow vision, which views the citizens of a city as simply a group of individual taxpayers, rather than a community. This spring, the Mayor will present City Council with a proposed Operating Budget that will likely be influenced by the recommendations of his Economic Opportunity Commission. That Commission was charged with finding ways to pay for the $57-million in revenue that the City will lose through a phased-in elimination of the business tax. 1 A Citizens’ Guide to Understanding Winnipeg’s City Budgets The Mayor began reducing the business • Library improvements (which, in fact, tax in 2007, with the intention of decreasing involves cutting spending on libraries) it every year until it was eliminated. While the Mayor has recently announced that • Pilot projects with BIZs and there will be no decrease in the business neighbourhood associations. tax in 2008, he remains committed to It is a long list, but with a consistent eliminating the tax in the long run. vision: the private sector provides services The CCPA believes that there is no strong more efficiently than the public sector. case for eliminating the tax (although Secondly, it suggests that many public it might be appropriate to amend it). services are frills that can be provided In its publication A Citizen’s Guide to through private fundraising. It is a private Understanding Winnipeg’s City Budgets, vision—one that works well only for those the CCPA outlined the weakness with the who have the private resources to buy all case for eliminating the tax and provided the goods and services that they need. an analysis of several of the EOC proposals This vision needs to be countered with for increasing revenue. It also outlines the a broader community-based vision, one that weaknesses of public-private partnerships recognizes that the public sector plays an (sometimes referred to as P3s), a type of important and positive role in Canadian funding arrangement in which, instead of life. Unfortunately, critics would have you borrowing money and building and operating believe that the public sector is costly a project, the City enters into a long-term and inefficient. They usually propose two contract with a private corporation to build solutions to these so-called problems: the and operate a public facility or service. government should either reduce services or This document takes a closer look at it should pay private companies to deliver key services that are funded by the City, those services. including some that could be affected by In the face of these arguments it is EOC cost-cutting measures. In its 2006 useful to bear a few points in mind. The report the EOC made the following cost- first is that most public services came into cutting recommendations, which it said being because private businesses were would reduce City costs by $25 million. unable to provide needed services for a • Tender/contracting and partnerships reasonable price. Clean water and adequate with the private sector and non- sewage treatment are two high-ticket items profit organizations of select non-core services. • Sell off or tender management of some of the City’s exercise and pool facilities, and golf courses. Public services came into • Partnership and tender out animal services and park security services. being because private • Holding overall labour costs to inflation. businesses were unable to • Employee feedback program and a fraud and waste hotline. provide needed services for • More volunteering. a reasonable price. 2 A Citizens’ Guide to Understanding Winnipeg’s City Budgets in the City of Winnipeg’s budget. These are of salaries, pensions, interests on debt, heat necessary services—yet in no city has the and lighting of city buildings, rent, and private sector been able to provide them to payments for services provided to the City. all citizens at a cost that all can afford. The Operating Budget not only sets out how Public services are often more efficient much the Council intends on spending in a than private services. When the first given year, it includes a plan as to how the public electric company was established in City will pay for its operations. The revenue Manitoba in the early 20th century the price comes from a combination of taxes, fees of electricity fell dramatically. Often the that the City charges for services, licence only way that private companies can make fees, and money received from other levels a profit delivering what was once a public of government. service is to either cut the quality of the service or cut wages—a move that often The Capital Budget causes the best employees to quit and which The Capital Budget is reserved for the compromises environmental standards. funding of costly purchases or projects that The more the private sector is involved in will be used for at least five years. Capital providing services, the less control the City investments can be made in buildings and has over quality control and cost overruns. equipment that support the City’s operations (a municipal office building or a major piece Looking at the City through the of equipment) or in projects that are used by budget the public at large (for example, a bridge, a road, or the water and sewage systems). The There are many ways to gather capital budget includes the amount needed information about how Winnipeg is evolving to acquire or construct each of the works as a city. We can follow media stories, attend proposed in the budget and the anticipated council meetings and have discussions with sources of the amount needed for each our families and friends. But the lack of of those works. The Capital Budget also openness at City Hall makes it very difficult includes a five-year forecast that is updated to develop an informed perspective on civic every December. government. When we at the Canadian Both budgets reveal a strong tendency to Centre for Policy Alternatives thought about transfer control of public assets into private how to disentangle the mixed messages hands. Whether it is through public-private coming out from both the media and City partnerships (P3s) or contracting out, this Hall, we decided to go directly to the most administration is determined to erode access reliable source of information we had access to and quality of our public services and to: the city budgets. amenities. We learnt that not only is our The City adopts two budgets every city being run like a business, it is being year: the Capital Budget and the Operating run for business. Many big businesses are Budget. Analysing the budgets reveals basic profiting from questionable policy decisions information such as who pays for what, such as approval of Waverley West and the and more subtle, but equally important use of P3s to maintain our infrastructure. information concerning who influences those decisions and why. A careful reading Services under attack of the budgets tells us what kind of city our In coming weeks, Winnipeg City councillors and Mayor envision. Council will be debating the 2008 Operating The Operating Budget Budget. One can expect that the Mayor and his supporters on Council will try to As its name suggests, the Operating turn their vision into reality through the Budget deals with the cost of running the spending decisions that they will make in City on an annual basis. It includes the cost 3 A Citizens’ Guide to Understanding Winnipeg’s City Budgets that budget. To aid citizens in following the budget debate, we have prepared this overview of key city services and the impact that the EOC and the Mayor’s policies are likely to have on those services. The services are organized under the following headings: Leisure and wellness services Environmental services Policing Planning and transit We believe that we need to consider much more than the costs involved in providing these amenities: we have to acknowledge the considerable benefits they bestow on all of us, including business.

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