The implication in your wording is that a lot of people who live outside the flood plain are compensating people living in Winnipeg for their flood damage, but

The implication in your wording is that a lot of people who live outside the flood plain are compensating people living in Winnipeg for their flood damage, but the way I read it, the citizens of the province of Manitoba are doing the compensating. Since over half the population of Manitoba lives in Winnipeg, it's not quite the black-and-white "taxes are theft!" scenario your wording makes it sound like.