Winnipeg Free Press - PRINT EDITION

Mayor rails against PST hike

Winnipeg will get only a pittance to fix infrastructure, Katz says

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Winnipeg Mayor Sam Katz has joined the chorus of complaints against the Selinger government's proposed PST hike, calling the one per cent bump "the biggest tax grab in history" and complaining it will do nothing to help the city meet its infrastructure needs.

On Wednesday, Katz held a noon-hour press conference outside his office to complain the city will not benefit from the provincial plan to generate an additional $199 million this year -- and $277 million annually in future years -- by increasing the provincial sales tax to eight per cent.

The province says it's making the move to pay for crucial infrastructure. Standing next to pie charts, Katz said the city will receive only $7 million of this new tax revenue, even though the majority of PST revenues come from the city.

He also accused the province of devoting most of the proceeds of the hike to provincial infrastructure priorities such as hospitals and universities and complained the city will have no say in how it spends the provincial funds that are made available to it.

"Does the provincial government have a spending problem, or are they fixing infrastructure? This is easily the biggest tax grab in the history of Manitoba," Katz told reporters.

He described the PST increase as a slap in the face to the city and other municipalities who have been asking for proceeds from such an increase for five years. The mayor surmised such a PST hike is no longer possible now that the province has taken up "tax room" with the new PST hike.

The province largely resisted the urge to return fire. Local Government Minister Ron Lemieux said the decision to increase the PST was a difficult one, but once Manitobans see the results, they will agree it was necessary.

He repeated the province's budget-day announcement that Winnipeg will receive a total infrastructure-funding increase of $22.3 million this year when an additional $7 million for roads, $5 million for the Southwest Transitway and $9.3 million for Plessis Road are factored in.

"That's nothing to sneeze at, I can tell you," Lemieux said, emphasizing he and Katz share many priorities.

"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."

Premier Greg Selinger said other Canadian municipalities would be happy to see funding increases of this sort.

"At a time when the federal government is giving the Province of Manitoba zero for the last four years, we're increasing support to municipalities eight to nine per cent," Selinger said.

But Katz said the provincial money won't even begin to address the immense size of the city's infrastructure deficit. "Ten years from now, there's going to be chaos as a result of this," he said on the floor of council.

He said Winnipeg faces "tough choices" in coming years, using political shorthand for making unpopular moves such as cutting services or raising property taxes to pay for infrastructure upgrades.

 

-- with a file from Bruce Owen

bartley.kives@freepress.mb.ca larry.kusch@freepress.mb.ca

Republished from the Winnipeg Free Press print edition April 25, 2013 B1

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Updated on Thursday, April 25, 2013 at 6:37 AM CDT: adds photo

7:45 AM: adds fact box

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