4 THURSDAY, NOVEMBER 16, 2017
A SUPPLEMENT TO THE WINNIPEG FREE PRESS
Celebrating 75 GROUNDBREAKING years in 2018
PUTTING MUNICIPALITIES ON THE ROAD TO NEW REVENUE SOURCES
A city’s development plan is supposed to be about vision, forging a path to a brighter future to capitalize on demographic changes and economic possibilities. But a discussion paper issued recently by the City of Winnipeg as it prepares to update OurWinnipeg might leave us all a little fearful of what’s around the corner. The capital region is expected grow to more than one million people by 2035. That presents definable challenges, but real opportunities as well for the city and it’s a good time to plan to meet them. It is about moving people to jobs and goods to markets efficiently, and providing the amenities — libraries, public facilities and green spaces — that residents in a world-class city deserve. It is about making Winnipeg a “must visit” location for site selectors scoping out markets when corporations expand or relocate (hello, Amazon). A development plan sets out where a city wants to be in 20 years, and how it will get there. Yet, on that point, the OurWinnipeg discussion paper recently distributed appears to dampen expectations, underscoring city council’s budget pressures. Infrastructure challenges are singled out. “We have a $2.2+ billion infrastructure deficit over the next 10 years, mostly related to road projects,” it said. “Using current funding sources, a significant additional amount per capita in tax support would be required to fully absorb the projected transportation-related infrastructure deficit over the next 10 years.” Increase property taxes? City taxpayers already pay an annual two per cent tax increase dedicated to local and regional streets — it shows Winnipeggers
and city council are doing their share. But revenues are constrained, the city document noted. “Therefore, moving forward, the City faces a number of critical decisions with respect to the ongoing transportation needs, choices, and costs for a growing population.” Infrastructure is an investment — the revenues dedicated to streets, roads and water and sewer fuel the economy, attracting new businesses and greasing the wheels of commerce. This is true of all municipalities and the revenue problem is not just a big-city issue. All Manitoba towns and cities face the same budgeting struggle. Municipalities own 60 per cent of infrastructure assets, yet reap only eight cents of every tax dollar collected. That is why transfers from higher levels of government have always been key to this annual budget line, and to infrastructure investment planning, which involves capital financing over multiple years. But transfers have tightened up. The Pallister government is holding down expenditures across departments, including transfers to municipalities, as it wrestles with deficits. Gone is the Building Manitoba Fund, which tied increases in transfers directly to PST revenues (ie. a growth tax). That makes it tough for municipalities to plan infrastructure projects, especially major projects that require significant financing arrangements. Being forced to go cap in hand to Broadway every year, as budgets are planned, is not productive. Aside from the horse trading that inevitably goes on (provincial vs. municipal priorities), when finances tighten up cities and towns inevitably must make do with less, or with smaller increases to transfers.
The provincial focus on expenditure control is understandable, but that can’t delay the development of an infrastructure investment strategy to plan the future of a modern metropolis. Overall, Winnipeg’s infrastructure investment deficit was pegged, in 2011, 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. THE PROVINCIAL FOCUS ON EXPENDITURE CONTROL IS UNDERSTANDABLE, BUT THAT CAN’T DELAY THE DEVELOPMENT OF AN INFRASTRUCTURE INVESTMENT STRATEGY TO
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. These options were recommended by the Infrastructure Funding Council, in its 2011 report to the City of Winnipeg, which urged: • Municipalities work to maximize own-source revenues, introduce organizational efficiency changes, adjust delivery models, and implement related best practices; • The province allocate growth taxes and vacate a further portion of education property taxes dedicated through legislation to municipal infrastructure; and • The province, the AMM and Winnipeg jointly pursue a national strategy, petitioning Ottawa to take an enhanced, permanent role in municipal infrastructure funding 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 a new relationship that lets the province focus on fighting the deficit, and municipalities to meet their own challenges and goals. Winnipeg appears to agree, noting in its discussion paper that it is “exploring new sources of revenue to address service costs and the infrastructure deficit.” Manitoba’s municipalities need a long-term solution to an old revenue problem arising from an antiquated, dysfunctional governing relationship. We need the province, our cities and towns to collaborate to find a better way. ❱❱❱
PLAN THE FUTURE OF A MODERN METROPOLIS.
Municipalities, of provincial governments, have limited access to revenue sources. What’s the fix? being creatures What municipalities need is a new fiscal arrangement, one that balances responsibilities, roles and resources better, and frees them from the Oliver-Twist reprise, every year at budget time. A possibility of a new fiscal arrangement would see
Top: Flin Flon’s iconic Flinty statue overlooks Hwy 10A at the entrance to the town. Photo by RUTH BONNEVILLE/WINNIPEG FREE PRESS Bottom: A surveyor’s view from the top of North Hill on Brandon’s First Street. Photo by MATT GOERZEN/BRANDON SUN
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