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2004 News Releases

City’s New Deal proposes a 2 per cent solution

WINNIPEG - April 6, 2004 - Two per cent more. That’s all that separates Winnipeg from being a city with crumbling infrastructure, to one that has the financial resources to not only repair existing assets but also invest in becoming a creative and vibrant city.

“This version of the New Deal is entirely based on citizen feedback,” said Mayor Glen Murray. “Our consultation process in the fall of 2003 was intensive and inclusive. Loud and clear the message was, broaden the tax base, don’t broaden the tax burden. Share more of the wealth that we’re already giving to governments.”

Indeed polls taken following the New Deal consultation period supported the need to address Winnipeg’s infrastructure problems through intergovernmental tax shifting.

Based on that feedback, here’s what the City’s revised New Deal proposes:

  • Transferring 2/3 of 1% of the GST that’s collected in Winnipeg to the city to fund infrastructure investments. A portion of GST tax revenue is considered better growth revenue for the City over the long term.
    Estimated new revenue - $62 million
    December 2003 poll – 85% of Winnipeggers support “a portion of federal sales tax being used to support city services.
  • Converting all existing provincial grants entirely to formula-based income tax sharing. This would build on the Provincial Municipal Tax Sharing Agreement, PMTS. All other grants would be eliminated.
    Estimated new revenue – $0 million, but will increase over time with economic growth
    December 2003 poll – 82% of Winnipeggers support “a portion of current provincial income tax being used to support city services.
  • Increasing revenue through fuel tax.
    Option A - Transferring 3 cents of existing provincial fuel revenue collected in Winnipeg and increasing fuel prices 3 cents per litre province wide and transferring the new tax collected in Winnipeg to the city
    Option B – Transferring 6 cents of existing provincial fuel tax collected in Winnipeg.
    Estimated new revenue - $66 million (either option)
    December 2003 poll – 83% of Winnipeggers support “a portion of current gasoline tax to help pay for maintaining and repairing roads, and 63% support an increase in gasoline tax of 3 cents a litre if the revenue was dedicated to roads.
  • Providing citizens with a 4% property tax reduction in the first year followed by an additional five years of tax freezes.
    Estimated tax savings $15 million initially; tax savings increase over time due to tax freeze.
    December 2003 poll – 59% of Winnipeggers support “reducing property taxes and shifting to other forms of taxation and fees.”
  • Efficiencies from reorganizing City facilities
    Estimated savings - $10 million
    Total impact, additional revenue - $123 million.

“We’re calling this the 2% solution,” added the Mayor. The city currently collects 7% of all taxes generated in Winnipeg. With our New Deal proposal, we’re asking the other levels of government to invest in our city. We are asking for 2% more of the total tax pie. This proposal reflects what Winnipeg citizens have asked for”

In mid March, the New Deal proposal was forwarded to the Provincial government for their consideration and review. The Federal, provincial and city governments will now collectively forge the New Deal.

“This New Deal provides a pretty simple solution to a pretty big problem,” said Councillor Bill Clement. “Citizens have helped us craft this New Deal, now all levels of government need to find the resolve to follow through to assist our city to grow and prosper.”

This simpler New Deal package has dropped several of the consumer-based tax shifting ideas. These have not been included, in some cases because of public feedback, and also to assure that several of the basic principles of any New Deal proposal were maintained: equity, efficiency, ease of administration, environment and the economy.

This latest New Deal has undergone analysis by The Conference Board of Canada, one of the foremost independent, not-for-profit applied research organizations in Canada.

The Conference Board concludes that, the overall impact on the City’s finances due to the proposed new fiscal arrangement results in the City being able to meet its infrastructure needs and also be in a financially sustainable position over the long run.

The Conference Board also concludes the New Deal would have significant positive economic impact on the Winnipeg economy due to the increased infrastructure spending. Employment is forecast to rise by 1,000 jobs in 2005 and increase steadily to 2,300 new jobs by 2020. Real GDP (Gross Domestic Product) is expected to be approximately 1% above current projections.

For more information on:
The 2% solution see, winnipeg.ca/newdeal
For a copy of the December 2003 polling see, winnipeg.ca/cao/prairieresearchpol.pdf


Last update: 06.04.2004

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