Manitoba’s largest municipalities continue to overspend unnecessarily on their operations according to the Canadian Federation of Independent Business’s Manitoba Municipal Spending Watch, 2nd edition.

Between 2008 and 2013, Manitoba’s 26 largest municipalities charged Manitobans $606 million more than needed to cover sky-rocketing operating costs, the equivalent of more than $2,500 in extra taxes for a family of four.

"Small businesses understand local governments need to slightly increase operating spending each year to account for inflation and population growth, but the growth rates we’re seeing are far from reasonable and exceed any sustainability benchmark," said Elliot Sims, CFIB’s Manitoba Director of Provincial Affairs.

Over the six year study period, municipalities saw their populations grow by 7 per cent, yet inflation-adjusted operating spending grew by 20 per cent, almost 3 times the sustainable spending benchmark. The study covered the 2008-2013 fiscal years and reviewed consolidated operating spending per capita, excluding amortization.

To help municipal governments identify their cost drivers CFIB conducted extensive cost analysis of spending, which revealed that growing labour costs – including municipal salaries, benefits and employer contributions to payroll taxes - are the primary driver of operating spending growth. Over the study period, $319 million of spending above the sustainability benchmark, or 53 per cent, was due to labour cost overruns. These costs stem from the fact that municipal workers receive 14 per cent more in pay and benefits than an individual doing the same job in the private sector.

"Until labour costs are brought back into line with private sector norms, taxpayers will continue to see potential infrastructure dollars siphoned off to pay for gold-plated pensions and benefits municipalities clearly cannot afford," said Sims. "The only alternative to raiding capital projects to pay for labour costs is higher taxes, which isn’t feasible given Manitoba’s uncompetitive tax environment."