Preamble: Municipalities are playing an ever greater role in the lives of Manitobans. Today’s municipal council has to balance community economic development, land use planning, and infrastructure renewal and development with a limited tax base and an increased reliance on application-based grants.

Federally, municipalities have benefited from a GST rebate, the sharing of the federal gas tax and the new Building Canada Fund. Provincially, municipalities have benefited from the sharing of provincial income tax, the Building Manitoba Fund, and supports in several other areas. While these efforts are welcome, now more than ever municipalities need new tools to deal with new responsibilities and new expectations.

Resolution: That the Government of Manitoba add to its funding streams for municipalities by, on an annual basis, allocating the equivalent of one percent of the provincial sales tax to municipalities for municipal infrastructure. Further, that the distribution of this revenue be on a per capita basis.

 

Resolution Report:  

The Manitoba Chambers of Commerce produces Resolution reports as part of its commitment to be accountable to its members. The reports are updated as matters unfold and have three components:

MCC Advocacy: Specific activities the MCC has done to help make this Resolution a reality. 

Developments:  Events (e.g. government action, media coverage) that relate to Resolution. 

Current Status: The MCC’s current plans to help make this Resolution a reality. 

Advice, comments, and information sharing are welcome; simply enter a reply at the bottom of this post.

 

MCC Advocacy: 

April 16, May 6 and May 7, 2009: The 2009-2010 Resolutions were posted on the MCC website, listed as part of a comprehensive Report on AGM 2009 and then notice of this story was circulated through the MCC e-Omnibus which is sent to all MCC members, Media and Government.

May 19, 2009: Resolution books were sent to every MLA and every Member of Parliament that hails from Manitoba. The following had this Resolution specifically drawn to their attention with a detailed letter setting out the background to this issue, Government initiatives (where applicable), and an argument for the Resolution:

• The Premier
• The Minister of Agriculture, Food and Rural Initiatives
• The Minister of Finance
• The Minister of Water Stewardship
• The Minister of Infrastructure and Transportation
• The Deputy Minister of Aboriginal and Northern Affairs 

June 15, 2009: The Manitoba Chambers of Commerce received a letter from the Minister of Intergovernmental Affairs on this matter. That correspondence included the following:

I can assure you that funding for municipalities is a priority for the Province. Manitoba provides broad and generous funding to municipalities, which has been increasing in recent years. Provincial revenue sharing with municipalities has almost doubled, increasing 98% since 2000.

Manitoba is still the only Province to share income tax revenues with municipalities and expanded its revenue sharing to include new fuel tax sharing through the Building Manitoba Fund (BMF) starting in 2005. Municipalities have benefited from growth in these shared revenues, as BMF funding has grown to $154.1 million in 2009, an increase of 30% since 2005.  

Over half of all provincial funding is provided unconditionally, providing municipalities with flexibility to address grants to address infrastructure and service delivery pressures. The most recent data available indicates that Manitoba provides the highest per capita level of unconditional grants to municipalities among all provinces.  

In addition, the Province also provides significant conditional funding support to address municipalities’ infrastructure priorities. We have committed $150 million for rural water and wastewater treatment upgrades, along with a $9 million expansion to our successful Rural/Northern Municipal Recreation Fund, supporting upgrades to recreation facilities in communities across the province. Provincial investments in infrastructure also include a $4 billion, multi-year Highways Renewal Plan – the largest in Manitoba’s history.

We believe the approach our Government has taken to assist municipalities through broad-based funding goes farther to meet the needs of municipalities than sales tax sharing. Sharing provincial revenues from a variety of funding sources, including income and fuel taxes, provides municipalities with stable and predictable funding each year. Shifting the municipal funding framework to tax sources, such as provincial sales tax, would limit municipal revenue capacity and make it less predictable and subject to fluctuations in market conceptions and consumer spending. 

June 17, 2009: The MCC E-Update provided notice of new developments on this issue. The E-Update was circulated sent to all MCC members, Media and Government.

August 10, 2009: The MCC met with the Association of Manitoba Municipalities (AMM) in relation to this matter. The AMM supported the Resolution and has not found the Government to be particularly responsive.

The MCC and AMM agreed to stay in touch and look at ways to work together on this issue.   

 

Developments:

May 2, 2009: A Winnipeg Free Press article by Larry Kusch entitled “Rural Manitoba gets $116M to build with: Feds, province team up to fund 52 diverse projects” reported that the Selkirk water treatment plant will receive a $9.7-million upgrade to improve water quality and allow Selkirk to supply outlying communities. The project is being cost-shared equally by Ottawa, the province and Selkirk.

As well, 18 Manitoba communities will get improved water-treatment facilities and 16 more will receive funds for waste water treatment.

June 1, 2009: An editorial in the Winnipeg Free Press entitled “Now walk the walk, Mr. Asper” stated as follows:

Heck of a sales pitch: run down a hate list of the city’s most unattractive qualities, then propose raising taxes as a fix for what ails Winnipeg. But the rah-rah rebuke businessman David Asper delivered at the Winnipeg Chamber of Commerce lunch Thursday was, from reports, invigorating. Mr.  Asper said that it will cost, but it will pay to shed the can’t-do attitude that covers Winni­peg like a dreary, old overcoat.

And worn it is. A report to the city earlier this year on its infrastructure deficit showed that the $2.1 billion Winnipeg plans to spend in the next six years to fill potholes and truss up bridges is less than half of what’s needed. The infrastructure deficit sits at about $4.5 billion. The recent flurry of infrastructure announcements by a federal government anxious to take the edge of a recession may have altered the numbers a bit, but the bone-jarring state of city roads this spring reveals an outstanding need.

Mr. Asper’s pitch went beyond the must-dos, into the things a major, modern North American city should do.

The road and exchange that will get highway traffic in and out of an intermodal hub at the airport are critical for this city to join the big players in continental transportation. Just as important to Winnipeg, however, is the rehabilitation of tired attractions — the zoo needs a do-over — and buffing up its urban landscape to reflect something more fitting a city with a future. The drive in from the airport tells visitors Winnipeg cares little for first impressions.

The city’s own revenues, heavily dependent on property taxes, cannot meet the challenge. Mr. Asper added his voice to the argument for giving municipalities access to consumption taxes, such as sales taxes. He proposed that a sales tax of two per cent would raise $300 million annually to fund projects such as refurbishing the zoo.

The idea of sharing sales tax was endorsed late last year by Manitoba municipalities but rejected flat out by the Doer administration. How, then, would cities and towns pay to get their roads and bridges in shape? the premier was asked. Gary Doer replied that he thought infrastructure money would be flowing from Ottawa.

And flow it has. But the necessity of submitting projects to higher levels of government keeps municipalities, hat in hand, at the pleasure of those governments’ whims. A useful illustration of this problem was Mr. Doer’s announcement in the last provincial election campaign that money would flow to a southeast Winnipeg neighbourhood — where his party picked up a seat — for new recreation facilities that were not on the city’s priority list.

The reduction of two percentage points to the federal Goods and Services Tax has opened room for just the kind of proposal Mr. Asper and others have outlined, room to let municipalities move in, or not, giving them the implicit ability to compete against each other just as provinces do now.

This is a worthy political and civic debate. Mr. Asper has done Winnipeg a service — perhaps all Manitoba municipalities — by raising it again, drawing back to the surface a proposal for tapping into consumption taxes for dedicated services that was launched, but then abandoned by former mayor Glen Murray. The Doer administration continues to be deaf to the cogent arguments in support of giving another source of revenue and greater power to address its infrastructure deficit. Those in attendance at the luncheon should join David Asper and other advocates to renew the debate and to force the province to give it the consideration it deserves.

August 7, 2009: The Manitoba Chambers of Commerce received a letter from Manitoba’s Minister of Finance. Unfortunately, that correspondence did not address this Resolution.

The letter does however feature detailed comments from the Minister of Finance on the Payroll Tax; Business Tax Relief; Infrastructure; Human Capital; and Effective, Efficient, Accountable and Transparent Government.

It can be read in its entirety here.     

August 20, 2009:  The Government of Manitoba issues a news release entitled “Province Commits $21.2 Million to Improve Water-control Measures” which states:

“The province is investing in improvements to major culverts, dams, drains, dikes and diversions in all regions,” said Lemieux. “The construction of improvements to provincial drainage works will enable the system to more effectively move water from farmers’ fields, roads and residential areas.”  

The full content of the News Release can be read here. 

September 25, 2009: The government issued a release entitled “Canada-Manitoba Invest In Brandon Wastewater Treatment Plant.”

That release stated as follows: 

BRANDON – The Honourable Gary Doer, Premier of Manitoba, and Merv Tweed, Member of Parliament for Brandon-Souris, today announced that $33 million will be invested into Brandon’s wastewater facility through the Provincial/Territorial Base Fund. 

“Protecting our waterways for future generations of Manitobans while promoting economic development and jobs in Brandon and western Manitoba has been the focus of this government, and today’s announcement builds on that commitment,” said Doer. “We are investing in infrastructure that promotes the economic development of the region and improves Brandon’s water quality.” 

“Our Government is making smart investments that will inject additional capital into our economy and keep people working during these tough economic times, while improving Manitoba’s infrastructure,” said MP Tweed. “Modern and reliable infrastructure investments such as this will provide the City of Brandon with their wastewater requirements for many years to come.” 

“Brandonites realize that protecting our water is a shared responsibility and we are proud to be taking a leadership role with these upgrades that will make Brandon the first municipality in Manitoba to be fully compliant with new standards for nutrient removal,” said Brandon Mayor Dave Burgess. 

Once completed, the $81.4-million facility will make Brandon the first municipality in Manitoba to be fully compliant with the Clean Environment Commission’s recommended standards for nutrient removal. 

For further information visit Infrastructure Canada www.infc.gc.ca.

September 28, 2009:   The Manitoba Government issued a release entitled “Province Announces New Rules for Sewage Disposal in Effect.”

Included in the release:

Effective immediately, the new regulations will:

• prohibit the use of a disposal field for new systems in sensitive areas, Crown land cottage developments, provincial parks and portions of the Red River corridor;
• prohibit the installation of new sewage ejectors and eliminate existing sewage ejectors at the time of any property transfer;
• require a two-acre minimum lot size for the installation of disposal fields;
• require hookup to municipal collection systems in serviced areas; and
• require municipal waste-water management planning.

The full release is available here. 

November 23, 2009: Received a letter from the Minister of Infrastructure and Transportation (MIT) on this issue, stating as follows:

MIT shares your concerns over the infrastructure deficit faced by municipalities. As you know, the historic investment and commitments by the provincial governments to spur priority infrastructure renewal initiatives have been steadily increasing over the past decade. The recent introduction of several federal-provincial infrastructure stimulus programs has significantly advanced our efforts on behalf of all Manitoba communities. MIT is proud of our achievement to date, however we share your recognition that more will need to be done at both municipal and provincial levels. For this reason, Manitoba will maintain all efforts to secure continuing federal support for infrastructure renewal initiatives.

November 27, 2009: The Honourable Greg Selinger, Premier of Manitoba, and the Honourable Vic Toews, President of the Treasury Board, along with his Worship Sam Katz, Mayor of Winnipeg, today announced up to $33 million in support for improvements to the existing South End Water Pollution Control Centre in Winnipeg.

Click here to read the government news release.  

January 25, 2010: The Winnipeg Free Press featured an article by Bartley Kives entitled “Critics slam Katz’s ongoing tax freeze: Mayor planning one more year without a hike” that touched on this issue.

The article stated: 

Since 2006, Katz has come around to the view that cities deserve a larger chunk of the taxes collected by the federal and provincial governments. And since Winnipeg’s economy makes up such a large proportion of Manitoba’s economy, this city deserves an especially large share.

“One (point) of the PST is approximately $118 million. The bottom line is, property taxes are regressive. We need to look at the whole situation,” Katz said.

Access the complete article here.

March 23, 2010: The speech of accompany Manitoba Budget 2010 had this to say about the issue of municipal infrastructure and water quality:

At p. 10:

“Since 1999, the province has invested nearly $200 million to improve drinking and wastewater systems in rural and northern Manitoba. This work will continue with $43 million for new projects across the province.”

At p. 15:

“The protection of our streams, rivers and lakes is important, and so we are increasing funding to help farmers meet water protection objectives. Budget 2010 also continues major investments in drainage capital works and maintenance, such as the North Crooked Lake project in the Interlake, Hatchery Road drain in the Interlake and the St. Elizabeth drains in the Red River corridor.”

 At p. 15:

“We are hiring more inspectors to enforce rules on septic systems, with a focus on the Red River corridor and other environmentally sensitive areas. This year, we will provide more resources to the Office of Drinking Water to implement strengthened drinking water standards across the province.”

Final Report:

The Government refused to consider part of the PST going to municipalities. However, the amount of funding Manitoba provides to the municipalities does compare favourably to the other provinces and the Government does remain committed to continue to work with our municipalities. As a result, this Resolution is a qualified failure.