Governments in Manitoba feeling fiscal pinch

The City of Brandon is considering tax increases. (File)

Homeowners in Brandon could be paying a lot more in taxes, as the city's council wrestles with a long term funding crunch.

“It’s a tough time to be in municipal politics.” said Brandon Mayor Jeff Fawcett.

Citing aging infrastructure and a history of low tax rates, a Meyers Norris Penny report commissioned by the city recommends two tax scenarios with significant increases over the decade.

"We run a very, very thin ship here.” said Mayor Fawcett. ”It is well managed but we're probably a little tighter than we should have been."

The report is intended to form a long term strategy for Brandon.

Scenario one shows 13 per cent tax hikes annually for the first four years, and around three per cent increases for the term. The second scenario is a flat rate of nine percent per year over the decade.

Mayor Jeff Fawcett stresses this is not the budget and does not reflect the final numbers, but he is clear on where taxes are going.

"I can assure you it's not going to be as low as it's been in the past," said Fawcett

Brandon is not alone; other municipal governments are also eyeing larger than normal tax hikes and feeling the fiscal pinch. John McCallum from the Asper School of Business says interest rates are putting pressure on all governments.

"The problem is a slowing economy, the problem is high interest rates, and the problem is a lot of government promises,” said McCallum

Winnipeg Mayor Scott Gillingham is pledging to stay the course with his 3.5 per cent tax hike promise. But he has said to temper expectations with the upcoming four-year budget.

"We're working really hard to also control our costs in this budget, but yes, difficult choices will have to be made in the budget process." Said Gillingham

All of this comes as Premier Wab Kinew and his new NDP government deal with a projected $1.6 billion dollar deficit, in part, because of falling Manitoba Hydro and income tax revenues.

"Whenever you find yourself in this deep of a financial hole, the first thing you have to do is stop digging,” said Kinew.

Mayor Fawcett says his city needs help from the province to grow the local economy.

"Part of it is putting together this longer term plan, and the other level of government can work with us,” said Fawcett

Kinew said Wednesday he wants to work with municipalities to find creative and innovative approaches.

“(Approaches) that are operable and that we can stand up in the current financial environment,” said Kinew