Financial outlook for Winnipeg worsens as snow clearing, COVID-19 continue to hammer budget

The outlook for Winnipeg's budget shortfall is worse in the city's latest financial status update.

The operating budget deficit forecast increased to $69.6 million, up from $56.8 million in the city's last financial update, released in November, an increase of 22.5 per cent.

The latest update is based on projections up to Nov. 30. The previous update gave projected costs as of Sept. 30.

The primary driver of the increased deficit forecast appears to be costs related to snow removal. Snow removal and ice control are now expected to cost $52.6 million more than what the city had budgeted for 2022, up from $40.9 million in the last update.

The forecast deficit for snow removal includes an over-expenditure request for December operations, which could end up being higher once the final numbers are tabulated in February.

Fuel costs are now expected to reach $11 million, up from $10.7 million.

Costs related to COVID-19 are expected to be $12 million higher than the $41.3 million the city budgeted for 2022, which is the same as the forecast in the previous financial update.

Winnipeg Transit's estimated deficit has gone down from $17.4 million to $13.7 million. 

Transit ridership remained about 32 per cent lower than normal at the end of November.

The city will need to draw more money from its rainy-day fund to make up for the increased deficit. After taking out the money to make up for the shortfall, there will be $10.8 million at the end of 2022, $60.9 million lower than the council-mandated minimum. 

In its last update, the city had expected to have $14.5 million left.

The forecast doesn't take into account an expected $19.4-million transfer from the federal government as part of a $750-million assistance package to municipalities facing transit losses.

That will improve the city's financial outlook somewhat, but the financial stabilization fund will still be significantly depleted, finance committee chair Coun. Jeff Browaty said in a news release.