Municipalities support PST hike for infrastructure

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This article was published 07/06/2012 (5193 days ago), so information in it may no longer be current.

A provincial sales tax hike to pay for infrastructure improvements would be welcomed by municipal politicians dealing with century-old sewers and crumbling roads, Brandon Mayor Shari Decter Hirst said.

“I am really encouraged that more people are recognizing that this is a critical issue and that we’re going to have to get a solution for it,” Decter Hirst said. “I think one of the challenges we have in the province is that there are many municipalities in the province facing challenges with their infrastructure, but don’t have large population bases. So the PST may be one way to allocate the revenues fairly, rather than by population because roads are expensive in Bradwardine as they are in Brandon.”

Manitoba’s New Democrats were to debate a party resolution at its convention last weekend, in favour of a one per cent hike in the PST, with that tax increase dedicated to fixing roads, sewers and water lines. Saskatchewan is the only province to have dedicated one per cent of its five per cent PST for infrastructure.

“What we have to do first is get some agreement from the province that they are wanting to have a discussion around this and I think (the Association of Manitoba Municipalities) has been very active in lobbying to get this issue in front of government,” Decter Hirst said. “There’s all kinds of models we can look at, and the one per cent is a nice round number that’s thrown out there.”

Decter Hirst said infrastructure spending resembles home maintenance, and that property taxes alone are not enough to fund infrastructure projects, such as Brandon’s $165-million infrastructure deficit.

Association of Manitoba Municipalities president Doug Dobrowolski has advocated that aside from a dedicated percentage point of the PST, the provincial government should rebate PST paid by municipal governments in the same way the GST is rebated by the federal government.

“I think it’s great that another voice is being added to the ones already there,” Dobrowolski said. “I know nobody wants any new taxes, but to raise the kind of money we need to actually fix something is about $216 million. I’m glad they are on board with that.”

Province-wide, Dobrowolski estimated that if existing funding models remain in place, the infrastructure deficit will reach $13.4 billion in 10 years. For that reason, he also advocates for an escalator clause in the federal gas tax fund as a way to generate more cash for infrastructure.

“We need a made-in-Manitoba program,” Dobrowolski said. “Every community needs some infrastructure improvements so we need to work on our provincial government to come through. When (Prime Minister Stephen Harper) took two points off of the GST, to me, that was a lost opportunity. There was a chance to keep one of the points or both of them, and use that for infrastructure.”

While Manitoba has dedicated an equivalent of one per cent of its seven per cent PST, it has not directly linked infrastructure funding to its PST. Dobrowolski called that a “shell game.”

“They have combined all of the existing programs and added $5 million,” Dobrowolski said. “Now that pot is tied to PST, so there is a bit of growth revenue, but really, there was only $5 million in new money last year. Now we are seeing the effects of the budget in Manitoba where programs are being cut and you are hard-pressed to find a grader on a provincial road. Roads are getting pretty bad out there.”

The PST debate has spread to the legislature, where Progressive Conservative MLAs have pressed the New Democrats on whether they will increase the PST.

Yesterday, Progressive Conservative finance critic Heather Stefanson asked whether Finance Minister Stan Struthers would increase the PST, as under Manitoba’s balanced budget law, taxes can only be raised after a provincial referendum.

“One thing is very obvious, and (the NDP) is very clearly stating this, is that the PST is very likely going up and they are not ruling this out,” Stefanson said.

Struthers responded that: “We will do exactly what we told Manitobans we’d do.”

“The equivalency of one per cent is dedicated directly for infrastructure,” Struthers added. “We’ve been up front with that and are following through on it. It was contained in the budget of 2012. …We have been consistent.”

He did not directly answer questions related to raising the PST.

» kborkowsky@brandonsun.com