WINNIPEG - Manitoba’s largest municipal governments have overspent $1.17 billion since 2008, finds the Canadian Federation of Independent Business (CFIB)’s latest Manitoba Municipal Spending Watch report. This overspending amounts to $4,696 for a family of four.
This new research studies municipal real operating spending from 2008 to 2015 for Manitoba’s 27 largest municipalities. Findings show that real operating spending declined by three per cent across Manitoba’s municipalities from 2014 to 2015, but has grown at 2.5 times CFIB’s sustainability benchmark over the eight years studied.
“While some municipalities have made progress, overspending remains a serious problem and should be a top priority for candidates in the upcoming municipal elections,” said Jonathan Alward, CFIB Director of Provincial Affairs for Manitoba.
City of Winnipeg making progress
Winnipeg’s efforts to reduce real operating spending drove much of the change in the 4th Edition of the Spending Watch report. Having found savings through vacancy management, service delivery, and collective bargaining, the City of Winnipeg lowered its level of real operating spending growth by five percentage points in 2015. Rural municipalities also improved as a group, while Manitoba’s cities and towns made little progress to reduce their operating spending levels.
“Over the course of this Council’s mandate, we worked hard to find creative and innovative ways to reduce spending and costs while maintaining service levels,” said Winnipeg Mayor Brian Bowman. “This included small steps like prohibiting elected officials from expensing alcohol, cutting the Mayor’s salary, and reducing salary top ups for Executive Policy Committee members. It also meant larger changes like building our city smarter and more efficiently by strengthening procurement processes and making more strategic capital investments.”
“These and other changes enabled the City to limit expenditure increases to 1.2% in the 2018 budget, one of the lowest levels in the City’s history,” added Bowman. “Importantly, negotiating more sustainable collective bargaining agreements last year with 75% of the city’s unionized workforce, is expected to cut labour costs by $21 million in 2018.”
The problem – growing labour costs
Growing labour costs, in particular, make up the bulk of operating spending among Manitoba’s largest municipalities (59%), and continue to increase beyond sustainable levels across many communities.
“Unsustainable labour costs are at the root of the municipal spending problem,” added Alward. “We know that Manitoba’s municipal employees earn higher wages and receive better benefits than their private sector counterparts, so more work is needed to reduce these costs.”
However, CFIB acknowledges that Winnipeg and some other local governments are beginning to address this problem. For example, Macdonald, Headingley, Rosser and St. Francois Xavier are looking at ways to save money by co-ordinating and sharing services, like procurement.
City of Winnipeg*
23% growth in real operating spending per capita since 2008
$1,576 real per capita spending in 2015
City of Morden
5% growth in real operating spending per capita since 2008
$1,126 real per capita spending in 2015
Rural Municipality of Hanover
9% decrease in real operating spending per capita since 2008
$441 real per capita spending in 2015
City of Flin Flon
15% growth in real operating spending per capita since 2008
$2,579 real per capita spending in 2015
Rural Municipality of Macdonald**
65% growth in real operating spending per capita since 2008
$1,283 real per capita spending in 2015
*For the purpose of municipal rankings, Winnipeg is considered in its own category due to differences in spending responsibilities.
**CFIB reached out to the RM of Macdonald for comment, but the municipality declined to respond.