Kinew says he's listening, but no commitments on new tax powers for City of Winnipeg

Manitoba Premier Wab Kinew didn't make any commitments Friday on possible new municipal taxes in Winnipeg.

Kinew said he has a good relationship with Mayor Scott Gillingham and will listen to city hall. But he made no promises when asked whether he would approve new taxes being floated by the city as options to solve a revenue crunch.

"We'll definitely be a listening government, as we always are," Kinew said.

Last month, Gillingham told business leaders the city desperately needs a new funding model, saying it's no longer "talking about trying to get funding for bells and whistles of legacy projects," but about "funding for basic services like pipes, pavement and police."

The city has commissioned a polling firm to ask people whether they would prefer to see Winnipeg get more money from the province, cut services, raise property taxes by more than 3.5 per cent or impose new municipal taxes. Any new taxes would require approval from the Manitoba government.

Among the items floated for a possible new municipal tax are liquor sales, vehicle registration, items ordered online for delivery, vacant homes, commercial parking and land transfers with an exemption for first-time homebuyers.

"Our city has grown by 65,000 people in the last three years," Gillingham said Friday.

"There is greater demand for city services across the city. We have not seen a corresponding revenue increase."

Gillingham said the various tax scenarios are hypothetical, and public response to the poll is expected in a week or two.

"Once we have that information, it'll give us a better sense of how to guide our discussions with the province of Manitoba."

The former Progressive Conservative government froze municipal operating grants for several years before boosting them by an average of 28 per cent in 2023. The NDP government, after winning last year's election, has committed to annual increases of two per cent.

That hasn't prevented Winnipeg's fiscal situation from becoming more serious, Gillingham said.

The province has yet to agree to an earlier request from the city for a $1-a-month fee on all phone bills in order to upgrade 911 services. The city had counted on the money for this year's budget.

Kinew was noncommittal on that fee as well on Friday. He said he's open to discussions with the mayor but must also keep people's cost of living in mind.

"The average person is coming out of a period of high inflation. Interest rates are coming down, but they're still high so we've got to keep life affordable for the average person out there," Kinew said.

The province also faces its own cash crunch, after posting a deficit of just under $2 billion — the largest non-pandemic deficit in the province's history — in 2023-24.

"I don't expect the province to start ponying up cash or allowing for … a major new revenue stream for the municipality," said Aaron Moore, a political science professor at the University of Winnipeg.

Part of the reason the city is in such a tough spot now is because past governments didn't raise property taxes enough, he said.

"What people have to realize is that the city hadn't been keeping up with costs for a long time... and as a result, they actually spent a very long time cutting a lot of things," he told CBC.

Municipalities have said for years that they need new funding that better keeps up with the cost of providing services. Municipal property taxes don't automatically increase in line with the economy, unlike so-called growth taxes at higher levels of government such as income and sales taxes.

Moore says it's good for the city to poll people for thoughts on dealing with the problem, but ultimately, there's only so much the city can do.

"The only current revenue stream that they have where they can make a lot more money is the property tax stream," he said.

"I'm not sure if this approach will actually get people on board with the idea that they may have to go up more."