MHCA supports Bowman’s push for new funding deal from province
Mayor Brian Bowman has signaled that demands upon municipalities for services, including new infrastructure, will be hard to meet without a new funding model from the province that recognizes the city’s limited capacity to raise revenue.
Bowman noted in his year-end interview with the Winnipeg Free Press, that this is an issue for all municipalities, although especially important to Winnipeg, as Manitoba’s economic engine.
“The short answer is council hasn’t prioritized the next major infrastructure project. There are a number of competing priorities. The ability of council to move forward with any of them is increasingly difficult with the revenue challenges we have as a city,” he said in a Free Press story December 31.
“That’s why a new funding model for municipalities has never been more important. That’s increasingly going to be part of the private and public dialogue that we’re having with the province: If we’re going to be building the economic engine of this province, which is the City of Winnipeg, we need to have the revenue models that support a growing city, and we simply don’t have that right now.”
MHCA President Chris Lorenc said the MHCA supports the mayor’s raising the need to discuss a new funding arrangement for municipalities. “We have supported that direction for the better part of a decade,” said Lorenc. Heading into the 2016 provincial election, the MHCA and 5 Manitoba business groups identified the need for a ‘new fiscal deal’ for municipalities as one of their 7 pillars for economic growth in the province.
“This is not a political blame issue. The mayor and premier inherited what they face, including revenue-generating and sharing structures that may have served well when adopted at the turn of the century, but now require a re-organization,” said Lorenc.
MHCA has spoken to the need for such a new deal for years. Lorenc noted that the Infrastructure Funding Council in 2011 described the fiscal challenges of municipalities in Manitoba and across Canada in meeting demands for new or repair of existing infrastructure. While municipalities own 50-60% of public infrastructure assets, they raise only eight cents of every tax dollar collected by governments. Tri-governmental funding agreements for major infrastructure projects expect all levels of government to contribute equal dollars to the projects, despite the inequality in revenue resource and capacity.
“We see that the demands for service on municipalities are so much greater than their capacity to raise revenue,” Lorenc said. “A new fiscal deal could adopt ways to balance these realities, such as reflecting the life-cycle costs in project funding – the costs of maintaining new assets, for example.”
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