North End plant a cautionary tale

Members of the Winnipeg City Council — especially returning members — are probably breathing a sigh of relief for something that happened mere days into their new mandate.

And if there is any fairness in the world of fees and levies, there will be the same relief for taxpayers as well.

On Oct. 30, the federal government announced it would be putting in $500 million to help cover the soaring costs of the North End sewage treatment plant. On the same day, newly re-elected Winnipeg Mayor Scott Gillingham announced that sewer rates for 2027 would be frozen, something that was promised during the election campaign.

The federal spending, along with $500 million in matching funds from the province that was announced earlier this year, is welcome news: both the federal and provincial clearly have a role to play in funding important infrastructure projects that Winnipeg can’t handle on its own.

Water and sewage rates increased last year by 2.8 per cent and were forecast to rise again by 4.6 per cent in 2027.

That’s a far cry from what was recommended by city staff in early 2025, which was that taxpayers should see an increase of 28.5 per cent on water and sewer bills in 2026 and a further 17.3 per cent in 2027.

That hike was rejected by city council, which argued that such a substantial increase could not be absorbed by taxpayers. Council was right: for an average household of four, that would be an increase of $776 over just two years. (The average household did end up seeing a one-year increase of $168 in 2026, however — and since 2020, the average total increase for that test sample household of four has risen by more than $352.)

The massive rate hike suggested to council last year was merely good accounting: the increases would cover what was needed to make up the North End sewage treatment plant construction shortfall if neither the federal government nor the provincial government coughed up money to complete the project.

The truth is, though, that taxpayers are still on the hook for all the massive cost overruns of the North End project, which is now expected to have a total cost of $3.1 billion, making it the most expensive infrastructure project in Winnipeg’s history.

It’s just that the money will be coming out of different pots.

We also shouldn’t lose sight of the fact that the reason Winnipeg taxpayers were threatened with such a massive increase in the first place is that the project is now closing in on being four times as expensive as its original $795-million price tag — and there’s no guarantee there won’t be even more cost surprises.

It’s hard not to become inured to the regular uptick of projected costs for the project. Tens of millions here, hundreds of millions there — the more things change, the more they stay the same.

When a project comes in costing 390 per cent of its original projected cost, there has to be a thorough, in-depth review of how we got to that point — even if, as in the case of the North End plant, the work is absolutely required for pollution control.

Were original estimates overly optimistic? Were there significant cost increases that could have been more accurately modelled before the project began?

Those are questions both the federal and provincial governments should be asking.

After all, there are more major capital projects being proposed by city council.

How do we even begin to decide if those projects are worth undertaking, if council can’t properly estimate what they will cost?

A cost/benefit analysis only works if you plug in an accurate cost.

Otherwise, it’s just random numbers and words, used to justify thin air.