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Benefits for trade, investment outweigh $755-M cost, city says

Peguis extension pricey but worth it: mayor

https://www.winnipegfreepress.com/breakingnews/2025/02/26/mayor-says-skyrocketing-cost-of-extending-chief-peguis-trail-worth-it

THE cost to extend Chief Peguis Trail in north Winnipeg has risen by hundreds of millions of dollars but city officials predict its benefits would still outweigh its price.

Extending the trail from Main Street to Brookside Boulevard would cost $755 million, plus $147 million in interest, if the city funds it solely through debt, a new city report notes. In 2019, the project was expected to cost $449 million, plus $38 million in interest (if funded by debt).

Mayor Scott Gillingham said the project is worth its hefty tab, since it would better connect trade routes.

“Right now, we as a community are facing the threat of tariffs … We need to be investor-ready so that we can pivot and open up the City of Winnipeg’s economy and the provincial economy to new markets,” said Gillingham.

Chief Peguis Trail currently runs from Lagimodiere Boulevard to Main Street.

The mayor said the city would need help from the provincial and federal governments to pay for the extension to Brookside Boulevard. He said he’s confident that funding will be provided.

“This is an important project for all three levels of government … federal and provincial governments have keen interest in this,” said Gillingham.

The mayor credited much of the price hike to construction inflation, while he stressed completing the project would result in a substantial boost to the economy over time.

A financial analysis predicts the project would allow the city to develop 1,200 net acres of residential land and 600 net acres of employment land. Over 75 years, the project should create thousands of jobs and trigger a $1.83-billion revenue boost, after expenses are accounted for, according to the report.

“It will unlock much-needed residential development, up to 15,000 homes, and needed employment lands,” said Gillingham.

The report notes that the financial forecast assumes property tax rates will continue to grow by 3.5 per cent each year, while lower tax hikes would produce far less revenue.

“Between 1991 and 2024, the compound annual growth rate in property taxes for the average homeowner has been 1.9 per cent — at this rate, the development would run a significant deficit for the entire analysis period,” writes Brad Neirinck, the city’s manager of engineering.

The project is expected to start paying off much sooner if provincial and federal governments help fund it.

City staff describe the trail extension as a “major transportation project” that is key to enabling development and supporting Winnipeg’s population growth.

“(Chief Peguis Trail) is intended to provide a continuous east-west link between the east and west section of the Perimeter Highway via CentrePort Canada Way, thereby improving access to industrial parks in the vicinity of the airport and further (developing) the strategic road network,” writes Neirinck.

He suggests Winnipeggers would also benefit from reduced vehicle travel times, new active transportation facilities and decreased greenhouse gas emissions (due to reduced fuel consumption), if the project is built.

Coun. Janice Lukes, chairwoman of public works, said the city’s top infrastructure priority is completing a multibillion- dollar upgrade of the north end sewage treatment plant.

However, Lukes echoed the mayor’s view that Chief Peguis Trail remains a key priority.

“It’s a lot of money. And it’ll probably be more money by the time it gets around to being built. … But now with what’s going on in the world, with potential tariffs … Canada needs to think (about) how we move goods internally,” said Lukes.

If threatened tariffs become a reality and deliver a substantial blow to the economy, Lukes said that could trigger stimulus spending that helps pay for the project.

However, some councillors aren’t convinced the extension is worth its price.

Coun. Matt Allard (St. Boniface) said a new road project that could cost more than $900 million

is tough to justify while the city struggles with a multibillion- dollar infrastructure deficit.

Allard said tax-increment financing grants that trigger the construction of new city buildings would likely create a much bigger return on investment than major road projects.

“I do acknowledge there is some economic benefit (to the trail extension) but it also comes with a liability of having to maintain the road,” said Allard.

If city council approves, staff will complete an independent “value for money” assessment of the project. The city could explore traditional construction, a public-private partnership and other options to build the extension, the report notes.

joyanne.pursaga@freepress.mb.ca X: @joyanne_pursaga

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