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Thompson municipal spending growth outpaced population growth nine to one from 2008 to 2014: CFIB

Thompson is the middle of the pack compared to the province’s other largest towns and cities apart from Winnipeg when it comes to municipal spending growth, says a report from the Canadian Federation of Independent Business (CFIB).
cfib 2016 municipal spendign watch
The CFIB’s 2016 Manitoba Municipal Spending Watch report, released Nov. 15, says that spending on municipal operations in Thompson increased by nine per cent over the period of 2008 to 2014, during which time the population only grew one per cent.

Thompson is the middle of the pack compared to the province’s other largest towns and cities apart from Winnipeg when it comes to municipal spending growth, says a report from the Canadian Federation of Independent Business (CFIB).

The CFIB’s 2016 Manitoba Municipal Spending Watch report, released Nov. 15, says that spending on municipal operations in Thompson increased by nine per cent over the period of 2008 to 2014, during which time the population only grew one per cent.

“Small business owners understand their local governments need to slightly increase operating spending each year to account for inflation and population growth, but entrepreneurs can’t accept the excessive increases that we are seeing year over year,” said Jonathan Alward, CFIB director of provincial affairs for Manitoba, said in a news release. “We keep hearing about municipalities having a ‘revenue problem,’ but our report clearly shows that it’s a ‘spending problem’ they are dealing with.”

Labour costs are the biggest driver of increased spending in Thompson over that timeframe, having increased 25 per cent and accounting for 54 per cent of the municipal budget.

“It’s easy to see that labour costs are the root of the municipal spending problem. It’s time to reduce the pay gap between public and private sectors workers,” said Alward.

Mayor Dennis Fenske said that the city’s property tax rate increase for 2016 was 1.5 per cent higher than the previous year and that a recent wage increase negotiated with the city’s unionized employees was for 1.25 per cent over the first three years and 1.5 per cent in the fourth year, also less than inflation.

“I think in general terms we’re meeting what our constituents are looking for,” Fenske said. “Nobody likes to pay an increase in taxes but you only have to look to the City of Winnipeg back in the days of Mayor [Susan] Thompson who had a 10-year freeze on rates paid and now they are in a major deficit for infrastructure funding to repair their roads and works. From our perspective the minimum that you would have to maintain is inflation as per this report outlines. In some cases we’re higher than that and there’s circumstances that can be explained. Basically overall I’m satisfied with where we are in the big picture of the report but again it is a snapshot in time of municipalities across Manitoba.”

Like most municipalities, Fenske says, about two-thirds of Thompsons’ budget goes towards salaries and benefits and policing costs.

“We have the largest [RCMP] contract of all municipalities in the province of Manitoba and so it is 17 to 18 per cent of our operating costs and in Northern Manitoba salaries are an issue with everybody,” Fenske says. “You have to pay a competitive wage to attract people to the north so almost 50 per cent – 47 per cent –of our expenses are tied to salaries and benefits.”

 

Based on the CFIB’S definition of sustainable spending growth as being equal to the rate of inflation and population growth, from 2008 to 2014 Thompson had $13.6 million in excess spending and, if the city had kept spending to the rate of inflation and population growth, it would have saved $1,000 for every resident of Thompson.

Thompson ranks fifth among the largest cities and towns of Manitoba excluding Winnipeg for spending increase from 2008 to 2014, with a real operating spending growth per capita increase of eight per cent, more than Dauphin (3 per cent), Morden (5 per cent), Winkler (7 per cent) and Selkirk (6 per cent).  It ranks ahead of Brandon (8 per cent), Portage la Prairie (11 per cent), Steinbach (18 per cent), The Pas (19 per cent) and Flin Flon (14 per cent).

Four of the other top 10 cities and towns – Brandon, Portage la Prairie, The Pas and Flin Flon – spent more per capita in 2014 than Thompson’s $1,541, with Flin Flon spending the most at $2,566 per person. The lowest-spending community on the list was Steinbach, which spend $1,077 per capita in 2014, though its spending had increased 18 per cent from 2008 to 2014.

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