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The cost of road expansion — permanent tax increases

MICHEL DURAND-WOOD

https://www.winnipegfreepress.com/opinion/analysis/2025/03/15/the-cost-of-ro...

THE city recently released an economic impact analysis on the extension of Chief Peguis Trail, a project slated to cost over $900 million including interest. We’re told it’s needed in order to unlock land for new development, to accommodate the city’s growth and to generate new revenue for the city.

But here’s the thing: the analysis calculates that for this project, and all the development it will enable, to just break even on its infrastructure investment, the city needs to levy above-inflation tax increases every year going forward.

In other words, the rest of the city will be subsidizing this development forever.

It’s often hard to grasp the significance of the city spending dollar amounts in the millions, or even billions, to our own lives.

So let me spell it out for you: extending Chief Peguis Trail will force your taxes to go up by more than inflation every year for the rest of eternity.

Why would we ever agree to that? If we decide not to increase our taxes by that rate, then it’ll just show up as a sewer rate increase, or a garbage fee increase, or some other fee increase down the line. Sound familiar?

And if we choose not to increase our taxes or our fees, then there won’t be enough money to fund the services we currently enjoy, or maintain the infrastructure we already own. So we’ll have to make cuts to library hours, close pools and rec centres, abandon bridges and leave potholes unfilled.

This isn’t theoretical, the money is real. And we’re the ones who pay.

And yet, this is how we’ve grown our city for nearly 80 years. Extend a road, build out a whole new development to a finished state with no possibility of change, then start again. That it costs more than it returns is the grand bargain we’ve accepted in exchange for the ability to keep our own neighbourhoods from changing.

But as we’re seeing, that grand bargain has a compounding financial cost.

At the end of 2023, the city’s net financial position was negative $1.2 billion. That’s how much we’ve already spent subsidizing current developments that we’ll need to make up in future budget years, either with above-inflation tax increases, fee increases, service cuts or neglecting existing infrastructure. Our 2024 and 2025 budgets project that to worsen to $1.8 billion by the end of this year.

Assuming the province or the feds will help us is forgetting that there’s only one taxpayer. The money is coming from us no matter what. It’s also forgetting that Winnipeg isn’t the only city that has grown this way. There isn’t enough money to go around, and it’s not even close.

But there’s a big messy gap between being against an insolvent development pattern that costs more to service than it returns in economic benefits, and being for the things that will help improve our collective fate.

From a financial perspective, given that 88 per cent of our infrastructure is just the roads and pipes, our biggest gains will come from making more efficient use of those that are already built.

But making better use of those pipes means every neighbourhood in the city will have to accept the possibility of having two, three or four homes where there used to only be one. After all, Canadians use half as much water per person as they did in the 1970s, and many of our older neighbourhoods have half the population today as in the 1970s, meaning some of those pipes are carrying as little as 25 per cent of their capacity compared to 50 years ago.

Making better use of our existing road capacity means having more trips taken on foot, on bike and on transit, moving more people in the same amount of space, while leaving more room for commercial traffic. That will only happen by reallocating some of the space to those other modes with wider sidewalks, bike or transit-only lanes and reducing vehicle speeds in some areas.

After all, we won’t get more people opting for walking, biking and transit if those choices aren’t safe, convenient and reliable.

After eight decades of having our neighbourhoods not change, it is certainly reasonable to expect that to continue. But that has a cost. Choosing to continue with the same approach means we have to accept more above-inflation tax increases, fee increases, service cuts and neglect of our infrastructure. Forever.

Ultimately, what we “want” and what we’re willing and able to pay for may not be the same thing.

Yes, transitioning to a city that allows a fourplex next door, reduces vehicle speeds and prioritizes active transportation over more road infrastructure is going to be an uncomfortable, awkward and messy process. But looking at the city’s finances, the alternative is certainly much, much worse. Tell your councillor.

Michel Durand-Wood writes about municipal issues at DearWinnipeg. com, and is the author of the upcoming book, You’ll Pay for This.