Mayor Sam Katz has accused the Selinger government of engaging in "the biggest tax grab in Manitoba history" by raising $277 million a year though a provincial sales-tax hike he says will not benefit Winnipeg.
The province refused to return fire, insisting only that it is increasing financial support for the city at a time when many municipalities are seeing reduced funding from provinces.
Katz held a press conference after Wednesday’s council meeting to decry the province’s commitment to the city’s infrastructure. This was his second such move in a week.
The mayor used storyboards to suggest Winnipeg residents generate 61 per cent of the PST, but will only receive $7 million of the $277-million proceeds of the PST hike.
He said the province is devoting most of the funds on infrastructure needs that already fell under provincial responsibility, such as hospital and university facilities. He described the allocation of the PST-hike funds as a slap in the face to the city and other municipalities, who have been asking for proceeds from a PST hike for five years.
Such a hike for municipalities is no longer possible, Katz said, now that the province has taken up "tax room" with a PST for its priorities, Katz said.
When asked what he could do about the situation aside from holding press conferences, Katz said it is up to residents of Winnipeg — where the province has most of its electoral support — to let the Selinger government know how they feel.
On the floor of council, Katz said chaos will ensue within 10 years because of the province’s lack of commitment to municipal infrastructure. He said the province has ignored every city request for new funding mechanisms.
Local Government Minister Ron Lemieux said while he and the mayor "disagree on a lot of things," Katz’s priorities and the province’s are very similar.
"If you take a look at what he wants, he wants better streets. There are going to be better streets. He wants to take a look at rapid transit; we hope they get moving on it and they don’t redirect the money, as it was once. We’ve budgeted for that going forward," Lemieux said.
He said the decision to increase the PST was a difficult one, but once Manitobans see the results they will agree it was necessary. Funding for street repairs will increase $7 million, he said, "apologizing" in advance to Winnipeggers for the traffic delays this will cause them this summer.
Katz said that $7 million is all the city will receive from the PST hike, while a 61-per-cent share of the total take would be worth $169 million.