Municipalities call for growth revenue source for infrastructure

“It’s a little more clear now. We are not asking for a new tax.”

– Doug Dobrowolski, Incoming AMM President

It sparked long debate and at times threatened to divide delegates, but in the end Manitoba’s reeves, councillors and mayors overwhelmingly mandated their association to begin lobbying for more cash to flow to local government through a sales tax.

At issue was whether a resolution put forward to the AMM was asking for a new tax, or a portion of existing provincial sales taxes. The original resolution put forward for debate had called for “a one cent municipal sales tax to be put toward municipalities for infrastructure renewal.”

Retiring AMM president Ron Bell tried to clarify matters. “This resolution does not necessarily call for a new tax,” he told delegates. “Whether it’s a new tax, an old tax, part of an income tax or whatever, the point is that this resolution… gives your association the ability to lobby for new money for infrastructure,” he said.

An impasse was avoided when two councillors proposed changes to the wording of the original resolution.

Thus, AMM goes forward supporting a resolution that now asks the province “to allocate the equivalent of a one per cent provincial sales tax to municipalities for municipal infrastructure.”

The money would be distributed to municipalities on a per capita basis and used strictly for infrastructure repairs and upgrades.

Not a new tax

“It’s a little more clear now,” said incoming AMM president Doug Dobrowolski in an interview after the vote. “We are not asking for a new tax.”

But what they are asking for is a sustained source of revenue to pay for infrastructure, he said. Municipalities simply can’t continue to rely on its current sources – property taxes and grants from the other two levels of government, he said.

“We need money to help fix this and we cannot keep continuing to fix this out of our current tax base,” said Dobrowolski. “This gives the AMM board a clear mandate to try and find a way to get more money for municipality infrastructure.”

Through nearly two hours of debate, municipal officials lined up behind the microphones to state the need.

Water and sewer plants, roads, bridges and other municipal infrastructure are deteriorating at a rate that far exceeds ability to upgrade or repair them, officials said.

$7 billion

The bill for needed repairs across Manitoba amounts to about $7 billion, said Steve Strang, mayor of the R. M. of St. Clements. “Where is the money going to come from?”

“We cannot begin to build and maintain our infrastructure with what we have,” said Jeff McConnell, a councillor with the Town of Virden. “The gas tax is just a fund. It can be clawed back. A tax is more permanent,” he said.

Steinbach Mayor Chris Goertzen said municipalities must have a sustained source of cash to invest in infrastructure. They are in the best position to decide where the greatest needs are, he said.

“We know how to spend this money. It’s time for us not to be perpetual beggars, but doers.”

Others were uneasy with the proposal, however, fearing municipalities will end up being responsible to pay for more if more cash comes their way. Others questioned whether small municipalities would see benefit from an allocation on a per capita basis.

The AMM faces a long lobbying road ahead on this one.

Intergovernmental Affairs Minister Steve Ashton, who spoke to the convention prior to the debate, told delegates that while his government looks forward to further discussion with municipalities on how to pay for infrastructure, both municipal and provincial governments must stay focused on getting through tough economic times right now.

“The focus should be on fiscal stimulus,” he said. “And fiscal stimulus comes by investing in infrastructure, but not by adding additional taxation on people who are going to be potentially losing their farms, losing their jobs…”

PST point

Opposition Leader Hugh McFadyen said a Progressive Conservative government would dedicate a half of one per cent of existing PST, shared annually with municipalities, generating $90 million in additional revenues. One percentage point phased in over four years could be justified, he added.

“We believe that your request for a point of existing PST which represents $200 million in new revenue is a reasonable request,” said McFadyen.

Liberal Leader Jon Gerrard also supported the municipalities’ plea for growth revenue sources. “We need to change the way things work so that municipalities have more opportunities and more powers,” Gerrard said. “We don’t believe we have to be the ones deciding everything for the whole province like the NDP.”

An Omnibus survey done by Probe Research in September 2008 showed rural Manitobans are most aware of municipal budget shortfalls when it comes to repairing roads, bridges, water and sewer plants and other infrastructure.

Sixty-two per cent of rural residents said they did not think municipalities could raise the money they need without getting these funds through raising taxes, or other sources. In Winnipeg only 50 per cent said so.

That research also indicated a slim majority – 54 per cent – in favour of a dedicated sales tax for infrastructure renewal. Twentyeight per cent polled were strongly opposed to the idea.

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About the author

Reporter

Lorraine Stevenson

Lorraine Stevenson is a reporter and photographer for the Manitoba Co-operator with 25 years experience writing news and features. She was previously a reporter with the Farmers Independent Weekly and has also written for community newspapers in Winnipeg and Manitoba's Interlake.

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