One per cent solution is 100 per cent lazy

Hey there, time traveller!
This article was published 02/06/2012 (5195 days ago), so information in it may no longer be current.

It’s true. Drive down almost any street or highway in our province and you know first-hand our infrastructure is abysmal, cracks abound, potholes threaten and unpaved shoulders loom. The cost to address this infrastructure deficit is estimated to exceed $10 billion and our failure to take immediate action undermines our future growth and prosperity, according to the Conference Board of Canada.

While the consensus may exist on the need for urgent and immediate action on our infrastructure deficit, increasing the PST one point is a lazy approach destined to become another burden for Manitobans to bear while little is accomplished

Like the rhythmic beating of a drum, the calls for increasing Manitoba’s retail sales tax or PST appear to grow louder every day, first from big business and now from organized labour. The problem, it’s claimed, is a lack of revenue and the solution, it’s claimed, is a one-point increase to the PST.

This is a simple solution to an obviously complicated problem that involves all three levels of government, tax collection, revenue redistribution and effort.

But let us forget the complexities and take it at face value, that a one per cent increase to the PST, from seven to eight per cent, would at least be a start to fixing our crumbling roads and bridges. In essence, we need to come up with approximately $262 million (the amount one per cent of PST equals) annually in new revenues for the government of Manitoba that they will, in theory, allocate to the infrastructure budget.

What if I told you that by the time you read to the end of this article I will have found $304 million of the required $262 million? In other words, I can find every single dollar asked for plus an extra $42 million. Would the drumbeats die down?

Because we are looking for “new” revenue we will ignore the previous expansion of the PST to include legal, accounting, and other services, which generated $24 million. Instead let’s focus on just four of the new revenue streams found exclusively in Budget 2012, released less than eight weeks ago:

— The motor-vehicle registration fee increased $35 yields $20 million.

— Fuel tax increased 2.5 cents per litre yields $49 million.

— The PST expanded to insurance premiums, haircuts and more yields $107 million.

— The promise to “reduce the cost of government” to yield $128 million.

Altogether $304 million.

We clearly have the additional revenue equivalent to one per cent of the PST, but what we lack is the political will to allocate it. It’s just easier to throw up one’s hands and increase the PST again (quick history lesson, but the last time the NDP were in office they increased the PST from five to six and then to seven per cent all the while claiming its necessity and benefits).

Instead of increasing tax rates, how about we increase tax revenues by: a) growing the economy and b) bringing sanity to our spending levels.

Simply put, until every rock is lifted to search for savings, until every effort is expended creating a business-friendly environment, until pro-union legislation such as automatic certification is tossed, then a one per cent increase to the PST will remain 100 per cent lazy.

 

Shannon Martin is a Winnipeg

political commentator.