Dear Winnipeg

Dear Winnipeg,

This will come as a surprise to literally no one, but I really enjoy robust discussions on municipal finance and infrastructure issues. That, and the completely unrelated Adam Sandler classic, Billy Madison.

What fewer people might know, is that I also enjoy robust discussions on ethics and moral dilemmas, both those in private life as well as those in public policy choices. It’s why I consider myself particularly fortunate to have had the opportunity over the last several years to act as a judge in both the regional and national Ethics Bowl Canada competitions.

Quick aside in case you don’t know it. Ethics Bowl is an annual high school competition where teams debate the most pressing ethical issues of the day. But, unlike a traditional debate, the goal isn’t for each team to pick a side on an issue and fight it out to the death, as it were.

Rather, the goal is for both teams to help each other fully explore the ethical dilemmas present in any given case in order to arrive at the best possible resolution, imperfect as it may be. In an Ethics Bowl competition, it’s okay, even encouraged, for a team to change their position when presented with new information or a new view on a topic. Because in real life, things are rarely cut-and-dry. It can be debatable which outcome is better: going on first and cleaning the hair, or making the hair all silky and smooth.

So when it comes to the ethics of a particular policy or action, the answer is often: it depends. Or, as Ethics Bowl Canada describes it:

“As the world becomes more complex, black and white must be traded in for finer shades of nuance. The Ethics Bowl challenges students to approach difficult, often divisive topics with nuance and empathy, confidence and humility.”

The overarching goal is to “let disagreement be the beginning of discussion, not the end” and to “turn ideas into action”.

As a competition judge, I’ve been able to witness high school students from all over the province and the country discuss complex social issues with an inspiring level of respect, critical thought and leadership.

I’m a huge fan.

And so, naturally, I’m especially a fan of robust discussions covering both ethics and infrastructure. And one issue that I notice seems to come back fairly regularly is the question of using debt for infrastructure, which sounds dull, but is actually a much more interesting topic than the photosynthetic cycle of chlorophyll. More like bore-ophyll! Am I right?

While it may have been discussed for a long time before that, I first noticed the concept of “intergenerational equity” in a 2016 report to the City. It explained that equity, or fairness, required that those who use services should be the ones to pay for them. And that intergenerational inequity arises when “one generation contributes to costs while another enjoys the benefits” (page 12).

It’s pretty straightforward when we’re talking about in-year expenses like snow clearing or fire protection. Your taxes that year go directly to providing those services in the same year, so the people who benefit are clearly the same people who are paying.

Where it gets a bit foggier is with infrastructure. After all, the lifespan of most infrastructure is measured in decades, sometimes as long as 50, 80 or even 100 years. If a generation of taxpayers has to save up all the money to build a piece of infrastructure that could last a century before needing replacement, like a bridge for example, is it really fair for that first generation to bear the entire cost of construction, if they won’t be able to benefit from its entire lifespan, while others do?

On the surface, the answer would seem to be no. But one way to address that is with debt. By using debt, we can build today using dollars from the future. And as those dollars are paid back in the future, it will be the future generations who are benefiting from the infrastructure that end up paying for it.

It’s why study after study has argued that public debt should never be used to cover expenses in the operating budget. It should only be used for expenses in the capital budget. In other words, on infrastructure.

How neat and tidy.

Except it ignores the fact that money is fungible. Fungible means completely interchangeable — whether you have this $10 bill or that one doesn’t matter. In contrast, when leaving the mall, you can’t just hop into any Toyota Tercel — they’re not fungible. So, the fungibility of money means that it doesn’t matter if you spent your last $1,000 in cash on Taylor Swift tickets and borrowed the $1,000 for the roof repair on your credit card, or if you did the opposite. The end result to your finances is exactly identical in both cases.

It’s the same for cities.

But that’s not the worst of it, because somewhere along the line, we’ve gone from “it’s ok to use debt for infrastructure” to “it’s crazy to use anything but debt for infrastructure“.

Unfortunately, that’s falling into what I’m going to call the O’Doyle fallacy. The O’Doyle fallacy is the belief that all infrastructure, like O’Doyle, rules.

Under the O’Doyle fallacy, all infrastructure is unquestionably good because the benefits always outweigh, or at least equal, the costs.

But if the cost-benefit analyses of the city’s last two major proposed infrastructure projects have showed us anything, it’s that that’s not necessarily the case. Infrastructure is an investment, and, as with all investments, there are good investments and there are bad investments.

And on the face of it, making future generations pay for your bad investments doesn’t sound too ethical, does it?

That reminds me of a story I know called “The Pony Who Lost His Way”…

Let’s say I got you a horse as a gift. Not being much of a horse dentist, you graciously accept it without a further look into whatever part of the horse will tell you if it’s a good horse. Not that you have much of a choice, because the horse is already asleep on your lawn and I’m long gone.

My gift is ethical, since you now enjoy all the benefits of owning a horse. You can earn income by racing it, giving hay rides to kids, or having it pull a plow through your fields. Or whatever else qualifies as horse benefits nowadays, I don’t know.

Of course, horses have expenses: feeding, grooming, stabling, vet bills, horseshoes (and horse socks). Not to mention, when the horse ultimately dies, you’re on the hook for buying a replacement horse, since your family has become accustomed to all the benefits that horse ownership entails. As long as those benefits outweigh the costs, there’s still no issue with my gift.

But what if one day, you opened up your mailbox to find an invoice from me? After all, you’re the one benefitting from all this horse-owning. It’s only fair that you pay for the purchase of it, not me. I never got to ride it even once. Well, okay, maybe once or twice. But that’s it.

As long as adding the debt repayment costs still leaves you with more benefits than expenses, I guess that could still be considered an ethical gift from me. After all, my actions have left you better off overall.

Although, here’s the thing about owning a horse: you, and all your future descendants, are now committed to care for, maintain and ultimately replace that horse. For every generation, forever. And that will be the case no matter whether you or I pay for the initial horse. I mean, this probably applies more to infrastructure than horses, but you get what I’m saying.

That said, if you chose that for yourself, that would be one thing. But in making the choice for you, I’ve taken your agency away to make that choice for yourself. Is that ethical? And if I’m going to take that control of your destiny away from you, should I not at least have some skin in the game, in the form of the purchase price of the initial horse?

Maybe, or maybe not.

But what if the price of oats went up such that the horse now costs more to own than it returns in benefits? Now how about instead of one of the money-losing horses, I gifted you thousands? Oh, and now I want you to pay for their purchase cost as well.

Instead of basking in horse-benefits, future generations are stuck putting out the thousands of flaming bags of horse dung left on their stoops. While also paying for the bags. And ruining a pair of perfectly good boots. With absolutely no recourse to prior generations.

So is using debt for infrastructure ethical? Ultimately, the answer is, it depends.

That’s why whenever someone states that borrowing for infrastructure is an unqualified good idea, we should ask ourselves, have they come to that conclusion after a robust examination of all the facts and ethical considerations?

Or have they come to it simply to justify what they were planning to do in the first place?

Winnipeg, like most cities throughout North America, is in financial crisis. While not all cities are equally as deep into it, they’re all more or less headed in the same direction. And it’s not hard to see, if you know what you’re looking at.

A city that’s getting real about that would never justify using debt to spend in the same way as it always has. Instead, it would make sure the $170 million it spent on road renewal each year would leave no road rebuilt the same as it was before, ever. Rebuilt streets would have narrower lanes, wider sidewalks, Silva cells for new street trees, and where appropriate, bike- and transit-only lanes, so they could move more people at a much lower cost going forward, in order to improve the returns on past investments. They would also build in bioswales to calm traffic, encourage more housing, and help solve the multi-billion dollar combined sewer separation problem the city is facing (at 10% of the cost). And that’s just the beginning.

Yes, the financial future of our cities looks pretty scary. But if citizens, local media and councilmembers everywhere take steps to better understand city finance, things will be less scary. And I know a really fun book that can help.

So you see, the pony was like infrastructure, in that they were both lost in the woods. And nobody, especially the little boy — “society” — knew where to find ’em. Except that the pony was a horse. But the infrastructure, my friends, that was a revolution… Knibb High football rules!

Love,

Elmwood Guy

P.S. We’re only four weeks away from the official launch of my book in Canada (and nine weeks from its launch in the U.S. and the rest of the world!). To celebrate, I’m having a book launch party at McNally Robinson Booksellers on Grant on May 31st, 2025 at 7pm. If you’ll be in Winnipeg on that day, I hope to see you there — it’ll be lots of fun, with games and prizes! Check out the full details here. And, if you won’t be in Winnipeg that day, don’t despair, the event will also be streaming live on YouTube!

P.P.S. You knew it was coming: a free draw for all you faithful readers everywhere! To qualify, just send me an email telling me that you already pre-ordered a copy of the book, or reserved it at your local library, or told a friend (or seven) about it. If you didn’t actually do any of those things, that’s fine, I won’t be checking up on you, and you still qualify. On May 19th, 2025, I’ll draw three names to win an autographed copy of my book and a nifty, totally super limited edition T-shirt! Still finalizing the design, but it will be the coolest. So cool, in fact, that people will consider you Miles Davis. (Don’t forget to specify the size you want when you email me to enter the draw).