Gas prices, low transit ridership and overtime costs all factors in projected deficit: city report

The City of Winnipeg is expecting a deficit by the end of the year for the General Revenue Fund according to a new report.

The Financial Status and Forecast Report is now available with information up to March 31.

It shows that the forecasted deficit for the general revenue fund is at $20.4 million and the special operation agencies has an expected shortfall of $2.5 million. However, the utilities portfolio is expected to have a surplus of $8.9 million—bringing the total to $14 million.

The biggest money losers so far according to the report are the Winnipeg Fire and Paramedic Service (WFPS) at $7.2 million, the Public Works Department at $6.8 million and the Winnipeg Police Service at $4.6 million.

The WFPS is seeing the deficit mainly due to overtime hours, as there are “increased vacancies.”

The WPS is down because it was unable to meet its expenditure management target that has been set in the budget.

Meanwhile, Public Works has been impacted by the high cost to remove snow and ice in January and February.

Looking at the utilities, water and waste is up in the first quarter, with a surplus of $26.7 million expected. But Winnipeg Transit will bring that down, as a $17.8 million shortfall is anticipated, with low ridership being one of the reasons for this dip.

“Volatility in commodity prices because of the war in Iran has impacted the cost of fuel for City departments. As of March 31, the City’s fuel costs are trending higher than budget and the City is expecting to exceed expected fuel costs in 2026 by approximately $4.2 million. The most significant impact is on Transit, which is forecasting an over-expenditure in fuel of $3.4 million,” the report reads.

If the city is unable to correct the General Revenue Fund deficit by the end of the year, the report recommends dipping into the Financial Stabilization Reserve Fund to offset the deficit.

There is currently $44.5 million in the reserve fund and if the entire $20.4 million were needed to be covered, the reserve fund would drop to $24.2 million.

The report notes the council-approved minimum for the reserve fund for this year is supposed to be $89.6 million.

While a deficit is forecasted for the general revenue fund, the report notes amounts for the capital fund, revenues, reporting entities, partnerships, elimination of inter-company transactions, and any other adjusting entries are not calculated in the quarterly financial report.

The next quarterly report is expected to be calculated up to the end of June.

The entire report will be read at the Finance and Economic Development Committee meeting on June 12.