Doug Dobrowolski, President of the Association of Manitoba Municipalities (AMM), says increasing the Provincial Sales Tax by one per cent as proposed in Bill 20 will not address the over $11 billion municipal infrastructure deficit in Manitoba. Instead, it appears money that should go to municipalities to address crumbling roads, bridges and community centres will be spent mainly on provincial infrastructure priorities.
The tax increase facing Manitobans will generate another $277 million. Although funding to municipalities through the Building Manitoba Fund grew by a total of $31 million this year, municipalities outside Winnipeg will only receive a fraction – $9.5 million – of this amount to tackle the multi-billion dollar deficit.
“The AMM has been asking for a predictable and long-term source of revenue to fix crumbling municipal infrastructure for years,” said Dobrowolski. “Now, municipalities will pay more while receiving less.”
The Province of Manitoba has repeatedly refused requests from the AMM to provide a greater share of the PST over and above existing levels. And the increase means the Province will collect even more PST from municipalities on any of their purchases or infrastructure projects – from an extra $67 thousand from the RM of Macdonald to $1.4 million more from the City of Winnipeg.
“It is inappropriate for one order of government to tax another, as it essentially amounts to double taxation,” said Dobrowolski. “We believe the Province should exempt municipalities from paying PST or provide a full rebate to municipalities as the federal government does with GST.”
Dobrowolski says the PST increase helps the Province while tying the hands of municipalities. “Municipalities receive only eight cents out of every tax dollar, and as a result already struggle to come up with one-third of the funding required for major infrastructure projects,” he explained. “The PST increase will help the Province take advantage of the federal infrastructure funding program, the Building Canada Fund, but municipalities will still have to raise their share.”
The AMM surveyed Manitobans in late 2011 and found that a majority would support a one per cent PST increase on the condition the funding be dedicated to municipal infrastructure. Instead, says Dobrowolski, “Municipalities will be left with even less money to spend directly on their communities.”
The AMM is making a written submission on Bill 20 today.
