Gas-tax index great, but more needed for infrastructure backlog: Katz

Enlarge Image

Winnipeg Mayor Sam Katz (MIKE DEAL / WINNIPEG FREE PRESS ARCHIVES) Photo Store

Budget

• Complete coverage of the 2013 provincial budget

• Budget highlights

• What's your reaction to Tuesday's provincial budget?

• The Great Manitoba Budget Quiz

Mayor Sam Katz called a federal plan to index the gas tax a "win" for Winnipeg, but said the city still needs more revenue or taxation power to tackle its growing infrastructure deficit.

This afternoon, Finance Minister Jim Flaherty announced $47 billion in funding in support of local and economic infrastructure projects over the next decade under a new Building Canada plan starting next year. The budget includes $32.2 billion in the next 10 years under a Community Improvement Fund to build roads, public transit, recreational facilities, $14 billion for a new Building Canada Fund to support major economic projects of national, regional and local significance, and $1.25 billion for the renewal of the P3 Canada Fund.

The previous Building Canada Fund was established in 2007 and will expire in 2014. The fund saw the federal government share a portion of the cost of projects such as the expansion of the Winnipeg Convention Centre.

Katz said the federal budget includes a commitment to index the gas tax at two per cent a year, which means Winnipeg will receive $43.7 million this year, up from $39.6 million. He called the plan "a win" for Winnipeg since the move will keep funding closer to the rate of inflation.

"It's a significant amount of money and gives you that added revenue to deal with inflation, and that's what's really important," Katz said.

Katz had expected the federal government to include municipal infrastructure in its budget given the problems facing Canadian cities. Earlier this week, the mayor said "there's no end" to the priorities in Winnipeg, noting the city's aging infrastructure includes everything from roads, bridges and back lanes, to community centres, libraries, police and fire stations.

He said the 10-year plan to continue funding local infrastructure is helpful and he's pleased by the longer-term commitment. However, he said cities need a bigger share of revenues or taxation powers in order to tackle Winnipeg's $3.8 billion infrastructure backlog.

By 2018 Katz said the infrastructure deficit is expected to reach more than $7 billion.

"There's no doubt in my mind we still need to take some serious steps to address our growing infrastructure deficit," Katz said.

Katz said the city has the power to decide how to spend the gas tax funds, and Winnipeg works with the province and federal government to decide which projects are a priority under the Building Canada Fund.

He said civic officials are still calculating how much Winnipeg will receive under the new federal infrastructure plan.

'Pressure on our budget': province

Finance Minister Stan Struthers said he welcomed federal commitments to infrastructure spending and skills development — two priorities for Manitoba.

But he warned that participating in such cost-shared programs will place a strain on the province’s finances.

"It’s a pressure on our budget that we’ll be needing to deal with," Struthers told reporters outside his office.

On the other hand, Manitoba won’t leave any federal money on the table, the minister said. "We’re going to work with the federal government to address these needs."

Struthers noted that Manitoba’s finances will take a hit in future years as Ottawa slows the rate of increases to the provinces in the area of health transfer payments.

'Devil in the details': construction industry

The Manitoba Heavy Construction Association also welcomed the new long-term infrastructure program announced in the budget. Some $47 billion of the 10-year Building Canada fund, worth $53.5 billion, is new money not previously announced.

"The fact that we have a decade of commitment is a very good and progressive first step," said Chris Lorenc, the association’s president. "But as is always the case with budget speeches, the devil is in the details."

"We don’t know, for example, if the GST rebates that are referred to as part of the package are dedicated to infrastructure. If they are not then that is not an advancement," he said.

Also unknown yet are the primary purposes of the new program. "We think that investments which fuel economic growth in new areas of economic activity or investments which help productivity and competitiveness in existing areas of economic activity need to be a priority," Lorenc said.

'Everything we’ve been asking for': municipalities

Doug Dobrowolski, president of Association of Manitoba Municipalities, was thrilled with the federal infrastructure commitment.

"I think it’s just about everything we’ve been asking for," he said. "We got a 10-year program. We’ll obviously have to wait and see what the details are. But they really expanded on infrastructure."

Dobrowolski was also pleased to see that municipalities’ share of federal gas tax revenues will now be indexed to inflation.

"That’s something we’ve been asking for and pushing for for a long time."

And he liked the fact Ottawa allocated money for affordable housing — something that is in short supply in many communities.

The federal government will spend $253 million on housing over five years, after failing to earmark any money to it in last year’s budget.

'Budget... to keep the rich rich and the poor poor: Assembly of Manitoba Chiefs

Manitoba’s top First Nations leader was dismissive of Finance Minister Jim Flaherty’s financial blueprint on Thursday.

"It’s a status quo budget that’s been designed to keep the rich rich and the poor poor," said Assembly of Manitoba Chiefs Grand Chief Derek Nepinak.

The status quo for indigenous people in Manitoba means increased poverty and a deteriorating housing stock, he said. "The 17,000 homes that are needed don’t get built."

Not that Nepinak is looking for handouts in any case.

What he would have really liked to have seen is some signal from Ottawa that the federal government was willing to sit down with First Nations and the provinces to discuss resource revenue sharing.

"What I want to see is government to government (negotiations) established on a tripartite level so we can get access to our resources," he said.

Once  First Nations gain access to such resources, they will have the money to create their own social programs, and young aboriginal people will gain some hope for a better future, he added.