Less than half of the cash the province expects to raise from a sales-tax hike this year will be spent on infrastructure, despite a pledge that every dollar will be spent on buildings, bridges and roads.
The 2013 budget calls for the province to spend $1.799 billion on infrastructure, up $80 million from $1.719 billion last year.
This increased spending represents only 40.3 per cent of the expected $198.5-million haul from a one-per-cent provincial sales tax hike justified on the basis of repairing Manitoba’s infrastructure. The hike is slated to go into effect July 1.
Finance Minister Stan Struthers said the tax hike is needed to take advantage of the Building Canada Plan, a federal infrastructure-funding program that requires matching commitments from other levels of government. Flood protection and infrastructure demands require more money now, he said.
"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," Struthers said.
He claimed the province is spending an additional $400 million more on infrastructure this year. But a comparison of year-to-year budget numbers reveals the increase is, in fact, just $80 million.
Those numbers also reveal the province does intend to spend more on health, housing and highway instructure this year. But it will spend less on universities, parks and floodway-and-water infrastructure.
Health infrastructure is the big winner, as spending on health facilities will rise $100 million to $350 million.
Spending on highways and winter roads will rise $42 million to $622 million. That rise is tempered by a reduced commitment to provincial highway maintenance, a budget item that will drop $5 million to $145 million.
Move similar to other recent revenue-generating moves
The claim that all the nex tax revenue will fund infrastructure is reminiscent of the province’s 2012 claim that new vehicle-licensing revenues would fund highway improvements. In fact, highway spending went down last year.
The City of Winnipeg pulled a similar move in 2011, when councillors claimed a frontage-levy hike would be dedicated to roads. In fact, spending on road maintenance actually dropped slightly.
The city and other Manitoba municipalities will receive $32 million in additional infrastructure transfers, far shy of the $300 million mayors and reeves had sought.
Many of the projects cited by Struthers had already been announced. He said the province will build a new recreational centre at Peguis First Nation and spend cash on upgrading northern airports, Brandon’s Keystone Centre, Churchill’s town centre and various provincial parks.
Other specific infrastructure investments planned for 2013 include improvements to the short stretch of the TransCanada Highway between Portage la Prairie and Highway 6, the TransCanada-Perimeter interchange east of Winnipeg, Victoria Avenue in Brandon, new passing lanes on Highway 10 between Brandon and Minnedosa, sections of Highway 6 and Provincial Road 373 and the ongoing construction to serve CentrePort.
Work will also continue on the road on the east side of Lake Winnipeg and flood-repair projects near the Souris River, Portage Diversion and Dauphin River, Struthers said.