Winnipeg's mayor said changes to provincial funding transfers will cause the city pain.

The Progressive Conservative government tabled an omnibus budget bill on Thursday that calls for the end of a long-standing provincial commitment to cover half the cost of Winnipeg Transit operations.

Bill 36, formally known as the Budget Implementation and Tax Statutes Amendment Act, would also eliminate the Building Manitoba Fund — an agreement to provide municipalities with one percentage point of provincial sales tax revenue — and replace it with another funding measure that is more fluid.

These changes, along with the province's stated intention not to provide the city with more funding to keep pace with inflation, will hamper the city's ability to deliver services and upgrade infrastructure, Mayor Brian Bowman said Friday.

"Obviously, we're entering a new era of funding for municipalities in Manitoba. What's increasingly clear to me is that there is going to be some pain for Winnipeg's infrastructure and Winnipeg taxpayers. The question is, of course, how much," the mayor said following a Pride flag raising at city hall.

Bowman said that pain will more likely result in service cuts, rather than property-tax hikes, and promised to do his best to convey to Winnipeggers this will be as a result of the province's decision.

"What I have committed to doing and remain committed to doing is having an open and honest discussion with Winnipeggers and Winnipeg taxpayers about the implications of some of the decisions that are being made at the legislature," Bowman said.

The mayor said the city still does not know whether the changes will affect operations or infrastructure this year and added the city is still seeking more information from the PC government, well over a month after provincial budget day.

Clarke: municipal officials 'relieved'

The mayor's comments are in stark contrast with a statement made Thursday by Indigenous and Municipal Relations Minister Eileen Clarke, who claimed municipal officials are happy with the provincial budget.

"They were actually sort of relieved that they weren't cut, dramatically," Clarke said at the Legislative Building. "To them to basically stay status quo for the ongoing year, 2017, was actually good news for them."

Bowman said in spite of the end of the province's pledge to cover half the cost of transit operations, city council still plans to follow through on efforts to improve safety on buses.

The city is contemplating a series of measures to improve transit safety in the wake of the killing this February of driver Irvine Jubal Fraser.

Bowman said in spite of the likelihood of cuts, he understands the province inherited a financial mess and must take steps to reduce its deficit.