Winnipeggers will pay another loonie an hour to park on city streets and 25 cents more to take the bus next year to help the city cover all of its costs in 2018.

Heading into the final year of his rookie term as mayor, Brian Bowman unveiled a $1.08-billion city budget that limits city spending to the smallest increase in recent memory, slashes infrastructure funding and also reduces Winnipeg Transit Service, all the while relying on motorists and transit passengers to generate additional revenue.

The budget calls for the city to spend only $1.5 million more on services in 2018 than it planned to spend in 2017. That amounts to a 0.1-per-cent increase from the 2017 budget.

"This does not represent your typical pre-election spending budget," Bowman told reporters during a news conference during a budget lockup at city hall, during which he complained about the province's decision to end a long-standing deal to fund half of Winnipeg Transit's costs that are not covered by bus fares.

"This has been a very challenging process," added council finance chair Scott Gillingham (St. James-Brooklands-Weston).

The transit-fare hikes planned to take effect on Jan. 1 will generate an additional $5.7 million for the city next year. They will take a full cash fare on a Winnipeg Transit bus up 25 cents to $2.95, while a full-fare monthly bus pass will rise by about $10 to $100.10.

Winnipeg Transit also expects to reduce service on 23 bus routes in June, after transit managers determine which routes are utilized the least. This would also follow the tabling of the provincial budget and enable Bowman to continue lobbying the Progressive Conservative government to restore its old transit-funding commitment.

Municipalities Minister Jeff Wharton would not confirm nor deny whether the previous commitment with the city could be restored before the next provincial budget.

"The City of Winnipeg has every opportunity to direct funding and if they feel [it's] in their purview to raise rates, then that's a decision that the mayor makes, not the province of Manitoba," Wharton said.

The service reductions would take place during off-peak hours, Bowman said.

The Winnipeg Parking Authority expects to rake in an additional $3.5 million by raising the hourly parking rate by a loonie on city streets serviced by pay stations. The parking authority also expects to raise an additional $750,000 by reducing the discount for early payment of parking fines to 25 per cent from 50 per cent.

The city is raising rates from 2 dollars an hour to three in prime parking areas downtown. It says even with the dollar increase, its rates are still comparable to other major cities. It also argues the hike will increase parking spot turnover, and help downtown businesses. 1:19 All of the additional parking revenue will be devoted to balancing the city's budget.

Road-renewal spending hike

On the bright side for drivers, the city plans to spend a record amount on road renewals in 2018: $116 million, an increase of $11 million over this year.

This road-renewal spending hike represents all of the additional money the city will take in from the property-tax hike planned for 2018. It will also be spent on a single project: rebuilding Empress Street between St. Matthews Avenue and Portage Avenue.

Despite the increased spending on roads, overall infrastructure spending is down dramatically. This is the main reason the city is able to rein in spending.

The tax-supported portion of the city's capital budget — that is, the money the city spends on all new roads and bridges, major repairs and equipment purchases — will drop $74 million in 2018, to $246 million.

As well, the amount of actual cash the city plans to transfer over to the infrastructure-spending side of the budget is down $31 million, to $23 million.

This is the second straight year the city plans to slash its infrastructure budget, which is down by about a third since 2016. The transfer of hard cash to infrastructure is down two thirds in two years.

This dramatic drop in infrastructure spending is taking place at a time when borrowing costs are low. City finance officials say this does create a risk in the future, when borrowing costs are expected to increase.

$22M in savings through 'vacancy management'

The city also expects to save $22 million in 2018 through so-called "vacancy management," the practice of declining to fill vacant positions at city hall.

Collective bargaining agreements reached between the city and three of its largest unions this year will also help limit labour costs. The Winnipeg Police Service budget is up $4 million, while the Winnipeg Fire Paramedic Service budget is down $5 million, albeit only because of reductions in spending on fire-paramedic buildings and equipment.​

The city also expects to collect $11 million from growth fees next year, but has no plans to spend the money until a legal challenge from developers is resolved.

The spending plan also calls for the diversion of some accommodation taxes, which are collected from hotels, to downtown safety programs.

The city budget makes no mention of any costs for regulating taxis and other vehicles for hire, a task downloaded on to the city by the province. The cost of vehicle-for-hire regulation, which could begin as soon as March 1, will be determined by a report expected early next year.

The 2018 budget will be debated over the next three weeks. Council will vote on the spending plans during a special meeting slated for Dec. 12.

South Winnipeg-St. Norbert Coun. Janice Lukes, who used to chair council's public works committee, said she's concerned about the reduction in infrastructure funding, particularly when it comes to recreation facilities. She said her ward is in desperate need of a new community centre and she was disappointed to see no commitment to that in the budget.

Unions slam budget

Outside council, reaction to the budget was mixed.

Winnipeg Chamber of Commerce president Loren Remillard praised the city for reining in spending, while Chris Lorenc of the Manitoba Heavy Construction Association said he was pleased with the additional spending on road renewals.

Gord Delbridge, president of the Canadian Union of Public Employees Local 500, said the city's plans to expand vacancy management will mean fewer employees and a reduction in service quality.

The Winnipeg Police Association was also harshly critical of the budget, saying it "will leave the Winnipeg Police Service short-handed yet again."

And John Callahan of the Amalgamated Transit union blasted the city's plans for Winnipeg Transit.

"They're sure beating up on the poor," he said of the 25-cent fare hike and planned reductions in the frequency of bus service along 23 routes.

"Off-peak service, that's when most of the low-income folks are using it."

Jeff Wharton is the provincial minister of municipal relations. (Jeff Stapleton/CBC)

2018 Winnipeg budget highlights

Operating budget (spending on city services): $1.081 billion, up $1.5 million from $1.079 billion in 2017. Smallest spending hike in recent memory.

Capital budget (tax-supported spending on infrastructure and equipment): $246 million, down $74 million from $318 million in 2017.

Cash to capital (transfer from operating to capital budget): $23 million, down $31 million from $54 million in 2017.

Property-tax hike: 2.33 per cent, unchanged from 2017.

Projected property-tax haul in 2018: $586 million, up $17 million from $569 million in 2017. This is the result of the hike and new developments within the city.

Frontage-levy hike: Not happening for the second straight year.

Winnipeg Transit budget: 192.5 million, up $1.2 million from $191.3 million in 2017.

Transit fare hike: 25 cents across the board, effective Jan. 1.

Transit service cuts: Reduced service on 23 routes, beginning in June, after the provincial budget.

On-street parking fees: Going up $1 an hour across the board. Early-payment discount for fines now only 25 per cent, instead of 50 per cent.

Police budget: $292 million, up $4 million from $288 million in 2017.

Fire-paramedic budget: $194 million, down $5 million from $199 million in 2017

​Road-repair budget: $116 million, up $11 million from $105 million in 2017. The entire increase will be devoted to one project, rebuilding Empress Street in Polo Park.

Empress Street reconstruction: $11.4 million to reconstruct street from St. Matthews Avenue to Portage Avenue,

McPhillips Street reconstruction: $6.6 million for a rebuild between Jarvis Avenue and Logan Avenue.

Fermor Avenue Bridge: $4.1 million this year toward an $11-million Seine River crossing that will be completed in 2019.

Growth-fee revenue: $11 million, up from $1 million expected in 2017.

Dutch elm disease fight: $4.6 million to remove trees, a record amount.

​Taxi/vehicle-for-hire regulation: Cost unknown.