The extension of Chief Peguis Trail from Main Street to Brookside Boulevard has been in discussion at the City since at least 2014, when a functional design study was done to analyze how people might use a future extension of this roadway. This led to a preliminary design which was approved by Council in June 2019. Building the extension according to the proposed plan would allow for the construction of approximately 15,000 housing units, for 38,000 people in northwest Winnipeg and it is anticipated that development would accommodate 5,600 jobs once completed. In March 2025, a benefit-cost analysis study and an economic and financial impact study were done for the project, and the 2026 budget allocated $5.2 million to begin property acquisitions for it (as well as the Route 90 expansion project).
As there is a lot of conflicting information (and misinformation) circulating about this project, my office has created this primer in order to help residents better understand this proposed project.
What is the cost of the project?
The latest cost estimate for the work is $758.8 million. It is also estimated that there would be an additional $140.3 million in construction period interest, should the city fund the entire project on its own, for a total cost of $899.1 million.
This is a Class 3 estimate. Class 3 estimates are considered accurate within -20% to +30%, meaning the actual cost could fall anywhere between $719.3 million and $1.17 billion, plus interest.
Source: Cost Estimate Classification, Supplement to the 2026 Preliminary Budget, page 295.
For the full project to proceed, funding from the Provincial and Federal governments would be needed. Even shared equally three ways, the City’s share would be at least $252.9 million, plus interest.
It should be noted that the interest figures above are for the construction period only, that is, from 2026-2033. The City’s borrowing costs for 30-year external debt are estimated to be 7.28% (which includes interest+principal), meaning even with Provincial and Federal support, just the long-term debt service on this one segment of road could cost the City over $21.8 million per year for the next 30 years, or over $654.5 million in additional debt service costs overall. Without Provincial and Federal support, those numbers are $65.5 million per year, or $1.96 billion overall. And that’s just to service the debt.
Source: 2026 Preliminary Budget, page 82.
But isn’t this good for the economy? And therefore good for the City?
Actually, the City’s own Financial and Economic Impact study projects that the financial surplus after 75 years is marginal: “this amounts to less than than one-year’s worth of total consolidated revenue the city received in 2023. So, while a surplus is projected, it is likely insufficient to help significantly address infrastructure or servicing needs in other regions of Winnipeg.”
Source: CPT Extension West – Benefit Cost Analysis Fin and Econ Summary, March 2025, page 63.
In fact, even this marginal surplus is dependent on the City levying above-inflation tax increases every single year forever. The analysis assumes 2% operating inflation, and 3.5% annual tax increases. According to the report, an increase to the “average annual tax rate of anything below 2.48 percent leads to a net financial loss by year 75”.
Source: CPT Extension West – Benefit Cost Analysis Fin and Econ Summary, March 2025, pages 60 and 66.
Worse yet, this analysis doesn’t even include the eventual (and inevitable) replacement cost of this new extension, nor of any of the roads in the new developments this will enable. Again, according to the analysis, “properly maintained local and regional roads may only require replacement 75 to 90 years after construction. This analysis only extends 75 years into the future from the present year, and as such, these costs which may be significant are beyond the time horizon analyzed.”
Source: CPT Extension West – Benefit Cost Analysis Fin and Econ Summary, March 2025, page 63.
And even if we ignore all of that, the analysis shows that before it breaks even (if it ever does), it will be negative-returning for two generations! “In sum, the development of these precincts will generate more cost than revenue on a cumulative basis up until 2067, which is 43 years from now and 36 years after development begins.” These are real costs that will need to be subsidized out of current budgets. Given that the City’s next multi-year budget cycle “includes significant tax supported shortfalls starting at around $150 million in 2028 to $174 million in 2031”, which already assumes annual tax increases of 3.5%, what is going to be cut for the next 43 years to carry these costs while we wait for the “payoff”?
Source: CPT Extension West – Benefit Cost Analysis Fin and Econ Summary, March 2025, page 55
and 2026 Preliminary Budget, pages 101-102.
What if the Provincial and Federal governments help? Can we afford it then?
Most tri-partite funding arrangements are split 33/33/33, but even if the Provincial and Federal governments funded 100% of the project, the initial construction cost “only accounts for approximately 20-25% of the lifecycle cost of owning and operating an asset”, meaning the City is still on the hook for 75-80% of the total costs. There is no way to afford this without massive tax hikes, service cuts, or both, every year, forever.
Source: Life Cycle Costing for Infrastructure Investment, December 2020, page 4.
What else could we do instead?
That’s the billion-dollar question that has not yet been asked. Are there other projects that could deliver congestion relief, grow our economy, increase livability, or help us reach any number of other goals, at a much lower cost? Rather than spending hundreds of millions of dollars of borrowed money on extending Chief Peguis to unlock land for development at a net negative return to the City, could we get a better return on our investment by accommodating growth where the infrastructure already exists to service it, and spending instead on transit, active transportation, or recreation? Instead of continuing to spend money on studies and land acquisitions to keep moving this project forward, would we be better off using what little money we do have on maintaining what we already own rather than building new? As the original Benefit-Cost Analysis states: “there may be other projects or proposals that yield better results, but the outcomes of those projects are currently unknown. This limits the usefulness of benefit-cost analysis.”
Source: CPT Extension West – Benefit Cost Analysis Fin and Econ Summary, March 2025, page 38.
Still have questions?
My office would be happy to answer them. Feel free to contact us at:
Councillor Emma Durand-Wood
Elmwood-East Kildonan Ward, City of Winnipeg
510 Main Street
Winnipeg MB R2B 1B9
Send an email here
Or phone (204) 986-5195