Sales-tax increase may draw more federal cash

Hey there, time traveller!
This article was published 24/04/2013 (4578 days ago), so information in it may no longer be current.

The NDP said Tuesday the increase in the provincial sales tax should let Manitoba take advantage of Ottawa’s new version of the Building Canada Fund for infrastructure.

The Selinger government said in last week’s budget it needs to boost the PST by one percentage point to eight per cent, in part to spend some of the additional money on heath-care infrastructure such as expanding hospitals and personal-care home space. The NDP predicts it will earn about $300 million in new revenue in the first full year of implementation of the hike.

Health Minister Theresa Oswald has said one reason the government is under pressure to increase spending on health-care infrastructure is because the previous version of the Harper government’s Building Canada Fund (BCF) excluded health-care facilities.

“Frankly, we’re on our own because the federal government has explicitly excluded including any health capital in any of their stimulus or (other) kind of funding, which we view to be in error,” Oswald said. “We’re on our own.”

Oswald was speaking Monday at a news conference to highlight $2.1 million in funding to create more training positions for nurses.

Premier Greg Selinger said Ottawa will make the rules for a new version of Building Canada known to the provinces shortly.

The Building Canada Fund was launched in 2007 with $8.8 billion. Manitoba’s share was about $500 million and was used for projects including finishing the Red River Floodway expansion and the Waverley West arterial road. The most recent project is the expansion of the Winnipeg Convention Centre. The new $14-billion program is to be in place and ready to go soon so projects can begin in the 2014 construction season.

Selinger has said proceeds from the tax hike will go into the new Manitoba Building and Renewal Fund to spend on what the NDP calls “critical infrastructure” — anything from an expansion of a hospital, university or personal-care home to a repaved highway to massive new flood protection recommended in a recent review on the 2011 flood. The tax increase will be tied to a time limit of 10 years that allows the province to tap dollar for dollar into the BCF.

Under already announced conditions, the 10-year BCF is to support projects of national significance, highways, public transit, local and regional airports, trade corridor-related infrastructure, waste-water treatment and connecting more communities to broadband. Disaster mitigation, such as new flood-prevention projects, might be eligible.

The province is also faced with a declining level of federal transfer payments it can use toward health-care-related projects, such as building more personal-care home spaces.

In 2009-10, the per capita level of major federal transfers was $2,749. The per capita level is forecast to be $2,623 in 2013-14, an overall decline of 4.5 per cent, the province says.

The NDP is also attempting to eliminate its half-billion-dollar deficit by 2016-17.

bruce.owen@freepress.mb.ca

 

Tories offer new questions for PST-hike referendum

THE NDP could get more bang for its buck on a PST-hike referendum by adding two more questions, Progressive Conservative Leader Brian Pallister said Tuesday.

Besides asking whether a majority of Manitobans supported a one-percentage-point increase of the provincial sales tax to eight per cent, Pallister said voters should also be asked whether they support the scrapping of the Taxpayer Protection Act and whether they support Manitoba Hydro being expanded by the NDP to export more electricity to customers in the United States.

“These are major issues that matter greatly to the future of our province,” Pallister said. “I think there’s a lot of merit in letting the people of Manitoba make decisions on issues of this nature.”

Pallister made his comments shortly before his MLAs launched a procedural delay in the legislature that has delayed by one day the vote to accept Finance Minister Stan Struthers’ budget. Nine days are set aside for MLAs to debate the budget and each delay cuts into time required for other legislative matters such as the budget-estimates process in which opposition MLAs quiz government ministers on spending and policy decisions in their departments.

The Tories are angry the NDP’s Bill 20, to green-light the tax hike, will do away with a Tory-inspired provision in the Taxpayer Protection Act to hold a referendum on major tax increases. Pallister was an MLA in the Filmon government 18 years ago when the Balanced Budget, Debt Repayment and Taxpayer Protection Act was introduced.

Pallister said the additional two questions would make a referendum more cost-effective. A ballpark cost of such a referendum is about $10 million to $12 million.

Pallister also said Manitobans should have a say on all three issues instead of being left out of the debate by the NDP.

“I trust the judgment of Manitobans and fundamentally don’t think it’s right to create a false sense of urgency and emergency based on the government’s own lack of preparedness,” Pallister said. “Now they’re telling you they have to raise PST and other taxes for things they ignored for 13 years.”

But the chances of a such a multi-question referendum being held are nil.

The Selinger New Democrats say they need the new tax hike to put about $300 million in full-year revenue into their coffers and they need to have it effective July 1, without a referendum. The NDP says it plans to use the money to boost infrastructure spending at a time when Canada’s economy is starting to slow, and to build new flood-protection projects in western Manitoba. The NDP has also said it wants to erase its half-billion-dollar deficit by 2016-17.

The NDP also supports increasing the generating capacity of Manitoba Hydro over the next decade to increase export sales to the northern U.S. The roughly $20-billion plan includes building the Keeyask and Conawapa dams in northern Manitoba and the Bipole III transmission line down the west side of the province.

 

— Owen