Responding to a new report posted to the Water, Waste & Environment agenda this morning, Mayor Scott Gillingham said he cannot support the proposed sewer rate increases, calling them too high for Winnipeg residents and businesses.
The report states that Project 3 of the new North End Water Pollution Control Centre (NEWPCC) will cost $1.5 billion to complete. To avoid exceeding the City’s debt limit, the proposal recommends paying for the project in cash through rate increases that would add $1,000 to the annual bill of a typical household by 2027.
“That’s a hard ‘no’ for me,” said Gillingham. “This proposal asks Winnipeggers to pay cash for a multi-billion-dollar sewage treatment plant that will serve the city for the next century. It’s like paying cash for a new house you expect to live in for the rest of your life. We need a better approach, one that gets this project done while protecting affordability.”
Councillor Ross Eadie, Chair of Water, Waste & Environment, also opposes the report as drafted. “We need to stop the clock and find another way to finance this project,” Eadie said, noting that wastewater rates do not account for a resident’s ability to pay. “For most major projects, we spread out costs over time — surely we should do the same for a multi-billion-dollar, intergenerational facility.”
The alternate plan
Instead of the proposed hikes, Gillingham and Eadie are recommending:
- A more modest single increase in 2025 — equivalent to $18.67 per month for the average household — to continue early-stage work on Project 3.
- Deferring larger rate hikes while the City pursues alternative financing options, including discussions with the federal and provincial governments and the Canada Infrastructure Bank.
- Referring the new $1.5 billion estimate for Project 3 to the City’s new Chief Construction Officer for review for potential savings.
Delays drove up costs
Gillingham emphasized the Public Service is not to blame for the proposed funding model. The project was mandated by the Province in 2003, and successive city, provincial, and federal governments did not move it forward quickly enough to contain costs.
“Our Public Service did what it is supposed to do – draft recommendations under the existing debt management policy,” he added. “But we believe senior levels of government want to support this project, and they also want to keep rates affordable. More innovative financing models could spread out these costs and dramatically reduce rate hikes while still ensuring the project is completed.”
The City has already secured additional funding for Project 2, including $166 million in federal government support announced yesterday, and $30 million from the provincial government announced last fall. However, this support cannot be reflected in any proposed rates until final funding agreements are secured.
The new NEWPCC is the most expensive capital project in Winnipeg’s history at $3 billion, and is required by law under the City’s provincial environmental license. Without these upgrades, Winnipeg will have to stop approving most major housing and industrial projects within the next several years.
Council’s first chance to formally review the Public Service recommendations will be at the Standing Policy Committee on Water, Waste & Environment on March 10, 2025.