The city of Winnipeg's Economic Opportunities Commission - which the Canadian Taxpayers Federation was a part of - released its report outlining a long-term, realistic plan to eliminate the city of Winnipeg's business tax over the next six years. It is now incumbent upon the mayor to ensure the recommendations are acted upon.

The Commission came up with a number of recommendations to eliminate the business tax, without residential properties subsidizing the reduction - something other cities have done. Everything from contracting out services, to partnering with the private sector has been presented in an effort to have more businesses paying less tax.

Part of the challenge with finding efficiencies at city hall is the stringent union contracts that have been negotiated. Labour costs are nearly 50 percent of operating costs and salaries have risen well above the rate of inflation. The Commission has recommended all future labour costs can and should be contained through attrition, wage settlements consistent with inflation, and devolution of some select non-core service areas for a potential savings to the taxpayers of $10 million.

As things stand right now, Winnipeggers are not getting the best bang for their high property taxes. For example, the city ratepayers own twelve golf courses. There are varying management arrangements with each of the courses, but most important is how much money they are losing. When the city created a Special Operating Agency (SOA) for golf services in 2002, it has had a loss of $1.7 million to date. "The Commission felt that with 25 golf courses in Winnipeg and with an additional 28 golf courses within 80kms of the city, the city of Winnipeg could look at divesting itself of at least some of its courses. Divesting itself of some golf courses and the SOA's annual deficit means that more time and energy can be spent focusing on the city's priorities."

In 2006 alone, the city lost $5.8 million operating nine recreation facilities. Of the nine facilities, eight ran a deficit and one broke even. But there are also other non-profit organizations, such as the YMCA in the exact same business who are not running a deficit, and are, in fact, mounting surpluses.

Again, labour costs are arguably the biggest factor driving up costs. In 2006 there was one city facility scheduled to break even, the Peguis Trails Health & Fitness Centre was "required to do so as per a 1997 City Council directive. However, following unionization of the facility in 2006, labour costs rose by 32 percent and the facility no longer breaks even." Higher wages for unionized civic employees are adding to the deficits. The city pays $17.50 to 22.24 per hour for its lifeguards while the YMCA pays $9 to 10 per hour. The Commission has recommended the city pursue partnerships with organizations like the YMCA to reduce its annual $10 million recreation facility deficit.

Not surprisingly, most of the pushback on the Commission's report is coming from CUPE who feel this is "a total slap in the face." But they should recognize their members are taxpayers too, and they will be able to bid on civic contracts.

Now that the Commission has reported and the city's Executive Policy Committee has received it, it will be up to the mayor, who has pledged to eliminate the business tax, to put forward a plan to implement some of the recommendations as part of the 2007/08 budget. Any delay in action will send a message to taxpayers and the business community that this will be yet another report sitting on the shelf collecting dust.