Winnipeg forecast deficit shrinks, but could still face bigger shortfall in 2025

January 13, 2025 Canuck

The City of Winnipeg’s financial outlook shows a smaller deficit than it forecast last quarter, but lower-than-expected tax revenue could leave the city with a bigger shortfall to cover in this year’s budget.

The latest budget update shows the city expects to overspend its budget in 2024 by $20.5 million — $2.9 million less than the deficit forecast in the third quarter update released in November, the city announced in a news release Monday.

While the overall deficit has been reduced, the city says it now has less money in its reserve fund to help cover the shortfall.

The city had planned to use more than $14.3 million from its rainy day fund to cover a portion of the deficit, but that number has now fallen to $9.7 million.

That leaves the city with $10.8 million left to cover from other revenue sources or spending cuts.

The city had budgeted $7 million in provincial funding to cover the remaining deficit this year, leaving approximately $3.8 million which the city will need to cover in 2025.

The difference is largely due to less tax money coming in from new building construction and renovations than the city had expected.

Net taxes added — meaning revenue from new buildings, additions and renovations added to the assessment and taxation rolls after annual property tax amounts have been set — fell by approximately $11.3 million. That was partially offset by an increase in property tax revenue of $4.6 million.

Previous budgets have repeatedly drawn down the city’s fiscal stabilization reserve. Finance committee chair Coun. Jeff Browaty told reporters in November this is the first time he can recall the city having to make up a shortfall from a previous year in the following year’s budget.

The city is legally required to table a balanced budget every year, meaning any shortfall at the end of the year must be accounted for in the next year’s budget.

View original article here Source