Hey there, time traveller!
This article was published 12/12/2018 (715 days ago), so information in it may no longer be current.
Manitobans are hearing a lot of talk lately about taxes. How they’re collected, expended or the way they’re reported in financial records.
And now, they’ll see their rights to a referendum any time the province proposes a major tax hike clearly spelled out in legislation.
The Manitoba Heavy Construction Association (MHCA) thinks there is a role for a referendum. But it has to do with a certain tax-cut proposal.
The Pallister government promised in the 2016 election campaign to cut the provincial sales tax to seven per cent, from the current eight per cent, before its first term ended.
But why not consider giving Manitobans a real choice? Why not ask them if they want to roll back the PST to seven per cent, or leave it at eight per cent and dedicate the revenues of that one percentage point to an investment strategy that will grow the economy?
Last week, Premier Brian Pallister released the government’s economic growth action plan. That plan was based on recommendations by an external consultation, provincewide, over many months.
A key recommendation in the Growing Manitoba’s Economy report is that government "strategically invest in trade-enabling infrastructure, to advance growth and support competitiveness." The Angus/Gamey report noted that highways and roads are foundational to ensuring Manitoba can meet the challenges — and capitalize on opportunities — in a shifting global landscape in trade. Old deals get rewritten, new deals open doors.
We agree. The MHCA has been making this very case for many years now on Broadway. Our advocacy for sustained, strategic core infrastructure investment is tied to the principle that our investment priorities must be keyed to economic growth.
The premise of the Angus/Gamey report is that it’s time to shift our thinking on, and the way government approaches, economic development.
Again, we agree — Manitoba needs to think broadly about the drivers of growth.
So, we need to openly discuss what might be viewed as provocative solutions to the challenges — and opportunities — we face, even if there is political discomfort in the process.
In a pre-budget 2019 submission to the premier this fall, the MHCA proposed that trade and infrastructure be merged into a single ministry. That recognizes the shared ground of the portfolios.
The MHCA also recommended a rethink of the way the province currently invests in and funds infrastructure. We suggested it appoint an expert third-party panel to review all funding streams for the variety of infrastructure programs and craft a strategy that elevates those priorities with the greatest return to the economy.
Maybe the provincial investment strategy could be managed by an external utility of sorts, at arm’s length to government. That strategy needs to be anchored by a transportation asset-management plan that assesses the condition of our roads and highways to know what it will cost to bring the system up to good condition.
We know that Manitoba’s highways and roads need around $6 billion in repairs.
With an asset-management plan in hand, the province could then craft annual and multi-year budget strategies — targeting a date to bring our whole transportation system up to good condition — that match revenues.
But how can Manitoba find that kind of revenue?
Let’s ask the expert review panel to look at current revenue streams — dedicating the revenues from all taxes and fees currently levied on transportation to infrastructure renewal? — and potential new funding streams (mobility pricing?).
And talking about revenue streams brings us back to the PST.
One point of PST brings in almost $300 million annually to provincial coffers. Why give up access to that revenue stream when the province is struggling to keep its highways in good repair? That magnitude of investment will give back immediately, by boosting the provincial GDP: a 2015 Conference Board of Canada report for Manitoba verified that for every $1 the province invested in core infrastructure in 2014, $1.30 was returned to the economy.
Investment in transportation infrastructure is a driver of economic growth because it puts trade on the road, efficiently. That underpins future prosperity.
So, let’s have a referendum on the PST-rollback proposal. Let’s ask Manitobans if they want to save one percentage point on their purchases, or keep the PST at eight per cent and dedicate $300 million raised annually to boosting current funding for transportation infrastructure.
That, in our view, is a vote for economic growth.
Chris Lorenc is the president of the Manitoba Heavy Construction Association.