Dear Winnipeg

Dear Winnipeg,

It’s no secret that the City of Winnipeg is struggling financially. If you’ve been reading here a while, you also know this isn’t unique to Winnipeg. It’s a problem for municipal governments across North America due to decades of unproductive development. There are times when I’m hopeful at the progress we’re making. At other times, I’m stunned at the mental gymnastics we will do to keep living in a financial fantasy world.

Take for example the issue of our combined sewers, which service about a third of the city. Neighbourhoods built after about the 1960s have separated sewers: one pipe for sewage, and one pipe that collects rain water through storm drains in the streets. Older neighbourhoods, on the other hand, have only a single (combined) pipe, about 1,000 km worth in all, that collects both sewage from homes and businesses, as well as rain water through storm drains.

The problem is when we get a heavy rainfall, which we have been getting more and more of over the years, that single pipe gets overloaded, and to prevent all of its contents from overflowing into people’s basements, the system is designed to overflow into the river. And that’s how we have billions of liters of raw sewage dumped into the river every year (12.2 billion liters in 2024, actually).

That’s obviously in violation of the City’s environmental license, and why the Province is having the City clean up its act, which the City plans to do by converting its combined sewers into separated sewers.

Here are the numbers: the cost of doing this work has so far been estimated to be $2.2 billion dollars. The City is setting aside as much money as it can for it, currently at a pace of about $30 to $45 million per year, meaning the work should be complete by 2095, or 70 years from now.

That’s a really long time. It’s as long as some of those pipes have already been in the ground. Like, my school-aged children could have great-grandchildren by then.

With that kind of timeline, we should probably just be honest with ourselves and admit that we’re not doing it. And yet, we continue to pretend that we are.

But then, a glimmer of hope from the City this week! Because, the cost was suddenly cut in half, and the timeline for completion moved up to 2047!

So what changed?

In a word, nothing.

In two words, absolutely nothing.

In three words, well, you get the picture.

Let me explain. When large projects are costed out, it can be done with varying levels of accuracy, depending on how far into the planning stages the project is. They call these different levels of estimates “classes”. If you’re just starting out defining your project, and you just want a ballpark “order of magnitude” number to work with, you start with a Class 5 estimate. As you move forward in the design process and refine more elements of it, your cost estimate can get more accurate, and you may get to a Class 3 estimate. Eventually, you can get to a Class 1 estimate, which is the most accurate.

That’s why we often hear in the news of the cost of a project going up. Sometimes it is because of cost overruns, but sometimes, it’s just because we went from a lower class estimate, say a Class 5, to a more accurate, higher class of estimate, like a Class 3. The cost didn’t actually go up, we just got a more accurate estimate.

Here is the level of accuracy of each class used by the City of Winnipeg:

• Class 5 – Concept screening, rough order of magnitude (least accurate): -50% to +100%. This means that whatever the estimate is, the final cost could be as much as 50% lower (half) or 100% higher (double).
• Class 4 – Feasibility study: -30% to +60%
• Class 3 – Preliminary design (for budget approval): -20% to +30%
• Class 2 – Design development in progress: -10% to +20%
• Class 1 – Detail design drawing and specification complete, pre-tender estimate (most accurate): -5% to +10%

The $1.1 Billion projected cost of the combined sewer separation we have is a Class 5 estimate, which means it could be anywhere from -50% of that amount, all the way up to +100% of it. Recognizing that predicting the price of bread three weeks from now is hard enough, much less the price of concrete, steel and construction wages three generations from now, City staff were rightly using the top end of the estimate in their calculations. That’s $1.1 billion +100% = $2.2 billion.

But now, after much pressure from council, the public service has started using $1.1 billion as their cost estimate, eliminating the +100% contingency. Has anything changed for funding? Work schedules? Materials cost? Inflation?

Nope. Nope. Nope. And nope. We just started telling ourselves that we’re able to predict, with perfect accuracy, the cost of doing this sewer separation an entire generation from now (yeah, even 2047 is a really long ways away).

I mean, while we’re at it, why don’t we reduce the costs further by using the bottom end of the estimate? Let’s throw in that -50%! Now, the project “only” costs $550 million, and we could probably get it done this decade! Man, running a city is easy!

Except, we won’t. Because at some level, we do recognize that this is an insanely expensive project that will take us an insanely long time to do with what money we do have. In other words, we can’t really afford it.

Which makes any talk of an expansion of Kenaston Boulevard, or an extension of Chief Peguis Trail, at nearly $1 billion each, an absolute fantasy within a fantasy.

Meanwhile, the 115-year-old Louise Bridge has been closed since May. It was supposed to be closed for a weekend for repairs, but the closure was extended a few days, then extended again until June 1st, until it was extended to the end of July after corrosion was found. We’re about a week away from the end of the month, and it’s still unknown whether the bridge will reopen, or if its closure will be extended indefinitely, like we did with the Arlington Bridge, which closed in 2023 and just never reopened.

We’re told that this is not “an Arlington scenario” because we’ve already budgeted $40 million to do repairs that would extend its life by 30 years, so we could just do those repairs. Except that $40 million rehab is a Class 4 estimate. Where does the money come from if the later, more accurate, estimates come back as much as 60% higher? There’s no plan for that, except to keep the bridge closed.

And even that $40 million is actually spending money we don’t have. After all, the City’s Net Financial Position has continued its decades-long decline to nearly negative $1.3 billion in 2024 (page 70). And this year’s budget predicts it’ll drop by another $432 million by the end of 2025 (page 368). Those are real dollars that we’re spending that we don’t have, dollars that will have to come out of future operating budgets, either as tax increases or service cuts.

The cold, hard reality is this: there isn’t enough money to maintain everything our city owns, not even close. And there never will be. Not as long as we keep pretending there is.

And that’s because it’s not that our governments, at all levels, don’t have the money. It’s that we, the people who fund those governments, don’t have the money. Yes, even if we “tax the rich”. The gap really is that wide.

So what can we do?

Well, first of all, we have to stop living in a fantasy and accept the fact that we have no money. That means we forget about the megaprojects. Yes, even ones like the $133-million Moving on Marion, which aims to add bike lanes to Marion St, among other things. The fact that “it may take decades to fund” is a pretty strong signal that it’s not happening. We clearly can’t afford it, and so we shouldn’t do it.

But that doesn’t mean we can’t improve our city. To paraphrase Winston Churchill (or Ernest Rutherford, depending who you ask), when you’re out of money, it’s time to start thinking. And boy, have some people been thinking!

This is where I get truly hopeful about the progress we’re making, because there is a lot! Here’s a list of my favourite recent low-cost, high-impact projects (in no particular order) that will help our city become more financially resilient.

Hat tip to the new Neighbourhood Action Teams, which was a campaign promise by Mayor Gillingham (credit where it’s due). These cross-trained teams of workers travel from neighbourhood to neighbourhood, and are responsible for addressing multiple issues at once, including potholes, broken signs, sidewalk repairs, tree debris, and boulevard maintenance. Solving everyday maintenance issues in one fell swoop, they address maintenance from the neighbourhood up, rather than from the department down. Love. It.

Second are the recently-approved zoning changes, aiming to allow neighbourhoods to gently evolve by allowing up to a fourplex by right. There are a lot of needless restrictions that make these changes less effective than they could be, but every improvement matters, so bravo anyways!

Next on my list is the trial reimagining of Graham Avenue. At a cost of only $250,000, the project aims to test out making the street a “vibrant people-first destination”. My favourite part is this quote by the Mayor: “We have permission to fail here. This is almost a blank canvas and we’re gonna try some things, and if they don’t work we’ll move on to the next thing.” Beautiful!

And let’s not forget the recent installation of over a dozen temporary concrete curbs to calm traffic throughout the city. As the Chair of the Public Works Committee describes it: “This is an interim solution. Put them in, trial them, then when the road comes up for renewal — if the trial proves to be effective — put them in permanently.” Music to my ears!

This is how we move forward. Small-scale, even temporary interventions so that if we fail, we fail small. And if we succeed, the returns are huge. And then when we’re ready to make things permanent, we already know what works, and we’re able to implement as we go, within existing maintenance budgets.

We’re already spending $160 million per year maintaining our roads — add in even a part of the $30 to $45 million we’re setting aside for combined sewer separation, and we could be putting in bioswales during street renewal, making our sewers more resilient to overflows, while narrowing streets to make them safer and more comfortable to walk, bike and take transit, encouraging more people to do so, saving us road renewal money in the long run, all while costing less to get more, because it all requires less pavement.

Spending money that does more than one thing. That’s how we get to a better Winnipeg.

But to do that, we have to recognize that continuing to focus on megaprojects that probably will never happen is doing actual harm to our city — every study we do, every report we commission, commits human resources and money that could be better used elsewhere.

And as we’ve seen, even small amounts can have big impacts. We have to expand that approach to everything we do.

Love,

Elmwood Guy

P.S. In case you hadn’t heard, I have a book out which demystifies municipal finance for everyday people. It’s a quick, easy (and fun!) read, and it’s been getting great reviews, so thank you to everyone who’s read it, and shared it! And if you had heard, but were waiting for an electronic version to come out, today is your lucky day, because the eBook edition is now available! Get it on your favourite platform!