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Winnipeg, November 15, 2016 – In advance of the Association of Manitoba Municipalities’ (AMM) annual meeting, the Canadian Federation of Independent Business (CFIB) is releasing the third edition of the Manitoba Municipal Spending Watch. The report finds Manitoba’s 26 largest municipalities’ overspending amounted to $848 million from 2008-2014, which is equivalent to $3,500 for a family of four.
“Small business owners understand their local governments need to slightly increase operating spending each year to account for inflation and population growth, but entrepreneurs can’t accept the excessive increases that we are seeing year over year,” said Jonathan Alward, CFIB Director of Provincial Affairs for Manitoba. “We keep hearing about municipalities having a ‘revenue problem’, but our report clearly shows that it’s a ‘spending problem’ they are dealing with.”
Over the seven year study period, municipalities saw their populations grow by 8 per cent, yet inflation-adjusted operating spending increased by 26 per cent; over three times the sustainable benchmark of population growth.
Growing labour costs – including municipal salaries, benefits, and employer contributions to payroll taxes – drove over-spending in most jurisdictions. Labour costs accounted for 57 per cent of total municipal operating spending in 2014 and increased by 25 per cent over the study period. This is driven by Manitoba municipal employees receiving 14 per cent more in pay and benefits than private sector workers doing the same job.
“It’s easy to see that labour costs are the root of the municipal spending problem. It’s time to reduce the pay gap between public and private sectors workers,” said Alward.
The $848 million in excess spending could have been used to fund municipal services across the province or reduce taxes. For example, this amount could have been used to pave approximately 169 kilometers of four lane highway.
While most municipalities saw operating spending grow at unsustainable rates, a few managed to keep spending growth under control.
Rural Municipality of Hanover
City of Dauphin
Rural Municipality of Portage la Prairie*
City of Flin Flon
“It’s great to see that there are some Manitoba municipalities that are working hard to be fiscally responsible. We congratulate Hanover and Dauphin on their rankings in this year’s report, and encourage other municipalities to follow their example,” added Alward.
*The operating spending increase in the Rural Municipality of Portage la Prairie is partly due to a $3.3 million conditional grant received from the province of Manitoba to cover additional costs from flood damages in 2011 and 2013.
**For the purpose of municipal rankings, Winnipeg is considered in its own category due to differences in spending responsibilities.
Read the complete Manitoba Municipal Spending Watch report.
To arrange an interview with Jonathan Alward, Director of Provincial Affairs for Manitoba, please call 1-888-234-2232, 204-982-0817, or e-mail [email protected]. You can also follow CFIB Manitoba on Twitter @cfibMB.
CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members (4,800 in Manitoba) across every sector and region.