Cities need infrastructure solution

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It is a rare day when a municipality makes a unilateral, public bid to draw cash for “regionally significant” infrastructure funding from the federal government. But that’s what the City of Winnipeg did last week.

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Opinion

Hey there, time traveller!
This article was published 18/07/2017 (1904 days ago), so information in it may no longer be current.

It is a rare day when a municipality makes a unilateral, public bid to draw cash for “regionally significant” infrastructure funding from the federal government. But that’s what the City of Winnipeg did last week.

On Wednesday, city council will be asked to approve the strategy that could put an additional $182 million into its regional street renewal program between 2018 and 2023. The federal cash flow, proposed to come from the New Building Canada Fund (NBCF), would bring total forecast investment in regional streets to $546 million.

The motion is clearly intended to nudge the provincial Tory government’s hand. This application needs a nod from the province, which to date has not yet moved to take up the roughly $527 million that remains unallocated to Manitoba under the NBCF. The federal funding, which falls out of the provincial government’s reach if projects are not jointly approved by next March 31, has to be cost-shared with provincial and municipal dollars.

DAVID LIPNOWSKI / WINNIPEG FREE PRESS Winnipeggers are well aware of their city’s infrastructure challenges.

Winnipeg’s proposal — preceded by a letter seeking support from the province — is timed to coincide with its 2018 budget-preparation schedule, now underway. Regional streets, which enable and sustain existing and new economic growth (thereby qualifying under the NBCF), are effectively “shovel-ready” projects that can be completed within the timeline set out by the federal government.

It is understandable why Winnipeg has gone this route.

First, there’s the infrastructure investment deficit, last pegged at $7.4 billion (in 2009 dollars). We await an update to that figure, but Winnipeggers know intimately the condition of their roads, streets, sidewalks — and the rising need for active transportation facilities, which are becoming increasingly popular. There is only one way to backfill that hole, and that’s through strategic, purpose-driven investment.

Second, the provincial government in Budget 2017 made clear it is constrained in its expenditures across departments, including transfers to municipalities. The funding-transfer formula in the Building Manitoba Fund, which tied municipal infrastructure transfers to PST revenues (i.e. a growth tax) is being repealed. As a result, municipalities are no longer able to forecast with any certainty the level of infrastructure funding transfers from the province.

That forecasting certainty is crucial to municipalities, which shoulder 60 per cent of public infrastructure assets, yet collect just eight cents of every tax dollar. (Similarly, provincial governments look to multi-year funding commitments from Ottawa expressly so they, too, have some forecasting certainty for critical priorities.)

And that brings us to the real problem, and the need for a real, workable solution.

Cities, being creatures of provincial governments, have limited access to revenue sources. The big one is property taxes. Put your hands up, Winnipeggers, if you think your property tax bill holds a lot more room for hikes.

Winnipeg’s city council has already taken a responsible approach to property taxes, with incremental increases that include one per cent each year dedicated by bylaw for local street renewal and another one per cent for regional streets. But Winnipeg, like every other Manitoba municipality, has always relied on predictable provincial help to fix its roads.

The provincial government has correctly signalled loud and clear that its top priority is getting the books back to balance, and doing that demands restraint in all quarters. This means that municipalities are set to shoulder an even greater load to maintain public infrastructure. And that sets them up for every year going, cap in hand, to Broadway to make the case for cost-sharing or transfers.

What this illustrates is that different governments have different and sometimes competing agendas. But on a more basic level, it pulls into focus the dysfunctional relationship that municipalities are caught in with their provincial masters — a relationship the Pallister government has inherited. It explains in part why cities and towns make faint headway against their infrastructure-investment deficits.

What’s the fix?

What municipalities need is a new fiscal arrangement, one that balances responsibilities, roles and resources better, and frees them from the Oliver Twist scenario every year at budget time. A possibility of a new fiscal arrangement would see the provincial government making tax room, and granting new authority for municipalities to levy, for example, their own consumption tax dedicated to public purposes, like strategic investment in infrastructure to grow the economy.

The Pallister government has pledged to roll back the PST by one percentage point in its first term. That makes this an auspicious time for a serious discussion about new relationships that lets the province accomplish its deficit-fighting goal while respecting municipal challenges and goals.

Winnipeg’s regional roads, which carry 80 per cent of all traffic, need investment certainty now — agreed. But Manitoba’s municipalities require a long-term solution to an old revenue problem arising from an antiquated, dysfunctional governing relationship. We need provincial and municipal commitment to collaboratively find a better way to meet that more pressing need.

Chris Lorenc is the president of the Manitoba Heavy Construction Association.

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