The City of Winnipeg has waived $49.3 million in future taxes to entice new developments since 2022, a strategy it credits with helping to leverage more than $1 billion in capital investments.
Mayor Scott Gillingham believes the results prove the grant program is successful.
“When the city uses (tax-increment financing), it leverages private-sector investment to get investment happening within the City of Winnipeg, multi-family units built and other investments to see growth of our city,” said Gillingham.
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Coun. John Orlikow (River Heights-Fort Garry) said he wants to see a limit imposed on the number of grants the city offers while it’s stretched for revenue.
Two years ago, city council approved its current tax-increment financing policy, which provides grants worth up to 80 per cent of municipal property taxes on a new development. The grants can last 10 to 25 years each, a new report notes.
Since then, 18 tax-increment grants worth $49.3 million were approved. The projects will help leverage more than $1 billion of capital investment and support construction of more than 1,500 new housing units, including about 600 affordable ones, according to the report.
Amid his own recent warnings that the city desperately needs more revenue, Gillingham stressed tax-increment financing grants don’t waive all tax dollars from a new development, and they help attract investment.
“In some cases, we know that the availability of the tax-increment financing grant has made all the difference in getting that project to be built and delivered,” he said.
The mayor said the tax breaks do require oversight.
“The city is forgoing that increased revenue of property taxes, and property taxes remain, disproportionately, the single largest source of revenue for the City of Winnipeg. It’s a reminder we need a new funding model from the Province of Manitoba,” said Gillingham.
Not everyone is convinced the city can afford to sacrifice millions of tax dollars through the grants each year.
“I would say we’re pretty well maxed out right now…. We are in desperate need (of) revenue. And with grants, unfortunately, we’re giving revenue away,” said Coun. John Orlikow (River Heights-Fort Garry).
Orlikow said he’d like the city to set a maximum limit to the amount of money it can devote to tax- grants in the future.
“We should have a cap, just like we have a debt ceiling,” he said.
The city recently provided a $13.6-million tax-increment financing grant for the redevelopment of Portage Place Mall and a $9.7-million TIF for the project to transform the former Hudson’s Bay building, both of which are expected to create some affordable housing.
Since 2022, TIFs supported 12 affordable housing developments, the conversion of a downtown surface parking lot into a mixed-use building, the redevelopment of two heritage buildings and a new downtown hotel, the city report notes.
The incentives include a $5-million TIF for a project slated to create 214 housing units, including 108 affordable ones, at 308 Colony St.
Greg MacPherson, the city’s affordable housing concierge, said TIF grants have helped trigger housing development.
“(There is) very deep affordability in a lot of these projects and they’re working with proponents that are representing (Indigenous and Black-led) organizations primarily…. From a public-service perspective, this is allowing us to make a lot of good things happen,” said MacPherson.
Matt Dryburgh, the city’s senior manager of economic development and policy, said the TIF grants strategically attract new builds without putting pressure on the current city budget.
Dryburgh said the city does explore each project to determine if it requires the tax break or not.
“It’s incumbent upon us to make a determination of need,” he said.
Council’s executive policy committee will discuss the report on Nov. 13.
joyanne.pursaga@freepress.mb.ca
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Joyanne Pursaga
Reporter
Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.
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