Premier needs to open up coffers

Hey there, time traveller!
This article was published 25/09/2017 (3075 days ago), so information in it may no longer be current.

At a time when the need to improve infrastructure and prime the economy has never been greater, the Progressive Conservative government of Manitoba is coming perilously close to squandering hundreds of millions of dollars in federal infrastructure funding.

Ottawa has $300 million in unallocated funding for Manitoba infrastructure projects that cannot be accessed without contributions from the provincial and municipal governments. And for the moment, Premier Brian Pallister is playing hard to get when it comes to ponying up his share.

Federal infrastructure funds come from two main sources: the New Building Canada Fund, introduced in 2014 by the former Conservative government, and the Investing in Canada Plan, unveiled by the Liberal government following its win in the 2015 election.

For the New Building Canada Fund, Ottawa, the province and a municipality each provide one-third of total project funding. The Investing in Canada Plan provides 50 per cent federal funding for water, waste-water and transit projects, with the remaining money coming from either a province, a municipality or both.

On both streams of funding, Manitoba appears to be behind on submitting its requests.

All projects to be considered for funding under the New Building Canada Fund must be submitted to Ottawa by March 2018.

Although there is no deadline for completion of those projects, Manitoba has received only $212 million of its $467-million allocation, according to federal officials. That leaves $245 million — or 58 per cent of the total available — in limbo, with an application deadline looming in just over six months.

Will Manitoba bundle together enough projects to fully exhaust the remaining money? Most municipalities, including Winnipeg, have already provided a list of projects to the province, but have not yet received word back on how many will receive provincial funding support. They may need to wait until next spring’s provincial budget to get the final word.

Uptake on the Investing in Canada Plan, which requires projects to be completed by 2018, has been a bit better. Manitoba has already received $122 million of its $176-million total federal allocation. Still, seven of 10 provinces have applied for and received 90 per cent or more of available money under this program. Four provinces are already at 100 per cent.

There is still time, although questions have arisen lately about whether the province is going to provide the support necessary to trigger the release of the remaining $54.5 million.

This past week, the City of Winnipeg announced it was forced to withdraw applications for federal funding for eight projects worth $18 million because the Pallister government wouldn’t provide a contribution. These projects included a much-anticipated $12.5-million pedestrian-bike bridge over Pembina Highway near the University of Manitoba.

The city did proceed on its own with applications for federal funding for seven other projects worth $35 million. If approved, the city will pay 50 per cent of total costs.

Civic officials were coy about their decision, but did reference “uncertain provincial incremental funding” as one of the main reasons why it was abandoning those eight other projects.

Why has Pallister become so reluctant to get involved in cost-sharing infrastructure? Largely, this is a byproduct of his government’s decision to cap the total annual expenditure on infrastructure at $1 billion.

With many more demands for money than available dollars, this has prompted the Pallister government to cut back in some areas of infrastructure investment. That, in turn, has meant less money for some cost-shared programs where federal money is available.

If Pallister continues to demonstrate a reluctance to contribute a share of total costs, he runs the risk of starving Manitoba of hundreds of millions of dollars in economic activity.

Consider the $245 million in unallocated federal money from the New Building Canada Fund. That funding represents one-third of total projects costs. If Manitoba does not find a way to access that federal money, the provincial economy will be denied many worthy infrastructure upgrades and $735 million in economic activity.

A similar crunch awaits the provincial economy with the Investing in Canada Plan. The remaining $54.5 million would translate into $109 million of economic activity. However, if Winnipeg’s recent decision to withdraw funding applications is any indication, Pallister is prepared to let the municipalities go it alone on this program.

As fiscal policy, this has to be one of the most powerful examples of a premier being “penny wise and pound foolish.”

Pallister desperately needs a significant boost to government revenues if he is going to have any chance of achieving his two top fiscal goals: balancing the budget and cutting the PST back to seven per cent. The premier has recently admitted that despite pledges to the contrary, he will not be able to meet these goals solely through expenditure control.

The premier knows there is no better way of boosting the economy — and driving increases in own-source revenue — than infrastructure investments. Even so, he remains ambivalent about putting provincial dollars on the table.

This miserly approach to infrastructure spending has rankled municipal leaders, the construction industry, and many in the province’s business and philanthropic communities, some of whom have put their own financial resources behind proposed public amenities that remain, along with many other core projects, in limbo.

The province still refuses to confirm its participation in the Winnipeg Art Gallery’s $65-million Inuit Art Centre. The previous NDP government pledged $15 million to the project, matching grants provided by the city and federal government. Private donors have committed to covering the remaining $20 million. If the province pulls out, the project could be delayed or significantly downsized.

It is unclear why Pallister isn’t more enthusiastic about this project. For every dollar the province provides, it would get four dollars in funding from other sources. By any measurement, public or private sector, that is an effective investment.

Pallister may meet all the deadlines and access all the federal money, although the timing will be tight. More curious is the premier’s decision to procrastinate on cost-shared projects when he could be accessing hundreds of millions of dollars from other sources, thus putting a charge into the economy now.

Pallister needs to look around him. There is a ton of free money out there that could be used to prime the economy and drive revenues.

All the premier needs to do now is reach out and grab it.

dan.lett@freepress.mb.ca