Winnipeg Free Press - PRINT EDITION

Budget contradicts vow on PST hike

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LESS than half the money raised by a provincial sales-tax hike will pay for infrastructure this year, in spite of an "every dollar" pledge by Finance Minister Stan Struthers.

The Selinger government plans to raise the PST by one percentage point July 1. The move will rake in $198.5 million to pay for roads, bridges, buildings and flood mitigation, Struthers said in his budget speech.

The money is needed now in order for Manitoba to take advantage of the Building Canada Plan, a federal infrastructure-funding program that requires matching commitments from other levels of government.

"These imperatives -- the need to protect against future floods and to invest in critical infrastructure -- must not be met at the cost of cutting core services," Struthers said in his budget speech. "So this year, we will introduce a time-limited, one-point increase in the provincial sales tax."

Speaking to reporters, Struthers promised all the money would go into infrastructure. "Every dollar that goes into this plan will be spent on Manitoba's critical infrastructure needs," he said.

Provincial budget papers, however, show the province plans to spend $1.799 billion on infrastructure this fiscal year, a rise of $80 million over the 2012 budget. With the tax hike poised to collect $198.5 million this year -- and $277 million in future years -- the province will actually spend 40.3 cents of every new dollar raised by bumping the PST up to eight per cent.

"It's a shell game," said Mike Mager, president and CEO of CAA Manitoba, which lobbies for road improvements. "The appearance is the money is going to infrastructure, but the reality is not quite the same."

Provincial budget papers show the province plans to spend more on health, housing and highway infrastructure this year, but less on universities, parks and floodway and water infrastructure.

Spending on highways and winter roads is bound to rise $42 million this year to $622 million, though the road-maintenance budget itself is down $5 million to $145 million.

Capital spending on health-care facilities is up $100 million to $350 million, while spending on housing infrastructure is up $49 million to $333 million.

The province will spend $68 million less on university, college and school infrastructure, $25 million less on parks, and $9 million less on flood-mitigation and waterway infrastructure, which are down to $228 million, $24 million and $48 million, respectively.

Specific provincial highway projects planned for 2013 include improvements to the short stretch of the Trans-Canada Highway between Portage la Prairie and Highway 6, the Trans-Canada-Perimeter interchange east of Winnipeg, Victoria Avenue in Brandon, new passing lanes on Highway 10 between Brandon and Minnedosa and sections of both Highway 6 and Provincial Road 373.

Struthers also said the province will build a new recreational centre at Peguis First Nation, upgrade northern airports and continue to extend the road on the east side of Lake Winnipeg.

Republished from the Winnipeg Free Press print edition April 17, 2013 B4

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