Analysis

Winnipeg Free Press - PRINT EDITION

Find courage and bite the bullet

By: Jim Carr

Posted: 04/14/2012 1:00 AM | Comments: 0

This is the second part in a three-part series on the April 17 Manitoba budget.

Budget

What do you do when everyone sees the problem but no one has the tools to fix it?

The problem is crumbling streets, major overhauls of water and sewage systems, funding for rapid transit and coping with mounting infrastructure deficits without the resources to deal with them.

In Winnipeg alone, it is estimated that during the next 10 years we will need more than $7 billion to fix what's broken and build what's needed. Our current revenue base won't do it, not even close.

Everybody agrees, and that includes Premier Greg Selinger, Winnipeg Mayor Sam Katz, Brandon Mayor Shari Decter Hirst, the Association of Manitoba Municipalities and the chambers of commerce.

It's time for solutions.

The Business Council of Manitoba has proposed a one per cent increase in the provincial sales tax dedicated to infrastructure.

One point in the PST generates about $250 million a year in new revenue and would make a significant difference in the fairest, most equitable and least painful way possible.

Just compare that $250 million to a one-point increase in property taxes in Winnipeg ($4.4 million) or a one-cent-a-litre hike in the gas tax ($12 million).

When we offered this possibility last year, the provincial government said no within minutes of hearing the idea. The opposition parties were just as quick to reject it. No politician these days wants to be out front calling for a tax increase, even if mounting evidence suggests the people are ahead of them.

This is a generational issue. We have a duty to fix the problem for our children and grandchildren and to do nothing or to do not enough is an abdication of leadership.

This is not the responsibility of any one government. The federal government should participate in national programs designed to tackle an issue the provinces and municipalities could not possibly handle on their own. The provincial governments, which control revenue sources municipalities are allowed to access, hold most of the cards and municipal governments need to demonstrate they are spending responsibly, borrowing prudently and acting appropriately within their own sphere.

The provincial balanced-budget law, for better or for worse, states any increase in major taxes, including the PST, requires a provincewide referendum.

If the legislature is unwilling to change the law, then the business council says bring on the referendum and let the people decide what kind of legacy they want to leave behind. If the provincewide discussion is led by political and community leaders, then the question, properly put, has a decent chance of attracting enough yes votes to win.

Another possibility is for the provincial government to pass enabling legislation that will free up the municipalities to introduce a municipal infrastructure levy that will generate the same $250 million a year a one per cent hike in the PST would do, if administered and collected provincewide.

There might be better ideas; let's hear them.

There is nothing politically sexy about infrastructure, but there is no more important platform for community development. It's like spending thousands of dollars repairing or replacing a leaky roof, not nearly as much fun as buying new furniture or remodelling the kitchen.

But try to put your house up for sale with pails and buckets on the carpets and floors. The homeowner has no choice but to bite the bullet, and neither do we.

Rather than our political leaders saying it's somebody else's problem, they ought to be saying it's our issue, and we will work together to deal with it. The provincial budget Tuesday is the best opportunity for Finance Minister Stan Struthers to acknowledge the problem, quantify it, accept the province's role and signal to Manitobans his willingness to raise the revenues needed to make a difference.

At a minimum, Struthers should open the door to a tax increase, either through the PST or a municipal infrastructure levy, and call a meeting with other levels of government to get this ball rolling.

It takes courage to ask the people to give government more; it means governments must demonstrate taxpayers are getting value and regular monitoring, measuring and accounting are part of the deal.

Leaders will bring the people with them and, more important, they will be able to say to the next generation of Manitobans we saw the problem and fixed it.

Jim Carr is the president and CEO of the Business Council of Manitoba, a group of CEOs of Manitoba's leading companies.

MONDAY: Cure for health spending

Republished from the Winnipeg Free Press print edition April 14, 2012 A16

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