Thank you for the opportunity to speak to you today, and for opening up the budget consulting process to the public.
Two years ago a group of community members were working on the 2018 Alternative Municipal Budget. This was the fourth time over a 12-year period that the Canadian Centre for Policy Alternative’s Manitoba office did an alternative municipal budget. In the 2018 version, “Imagine a Winnipeg . . .” https://www.policyalternatives.ca/publications/reports/imagine-winnipeg, we dared to imagine a city that used the budget to deal with our two most pressing issues: climate change and income inequality.
We know that these alternative budgets are aspirational documents, but we don’t think that the ideas contained in them are beyond the pale. We do our best to respect the City’s fiscal framework, and contrast our revenues and expenditures with yours.
We like to think that we do the budget you wish you could do. We can say, OK, what would it take to really deal with the infrastructure deficit? What would it take to really start making up for the 14-year tax freeze? What would it take to really provide community services that make our city more livable, that prepare us for climate change? We think we provide some doable strategies that end up not really being that radical. We open up some space for you to take leadership on the most pressing issues of the day.
We understand that it’s a lot easier to criticize from the sideline than it is to be on the frontline. We know that politicians don’t get elected by promising to raise taxes; if we learn anything from the 1990s, we see that you have a better chance of being elected if you freeze taxes.
But what if you also win elections by being strong leaders; leaders who do not allow the city to slide backwards? Alternative budgets open up some space for you to take leadership on controversial issues, and the ideas we have presented over the years, such as the impact fee, remain valid. In fact, our analysis of the City’s fiscal situation is very similar to your own experts’.
The council briefing presented in October this year highlights the problems we faced in the 1990s, and how the city tried to reverse the decline by reducing taxes and deferring operating and capital expenditures. But at the same time, infrastructure was deteriorating and urban sprawl marched on, so it wasn’t really an effective strategy. All it did is differ the difficult decisions so that you have bigger problems to deal with today. Did we reduce debt too much, thereby allowing the infrastructure deficit to grow to a point where it’s hard to contain? Should we not have at least increased taxes to keep up with inflation?
The council briefing doesn’t pose these questions, but it does point out that we’re facing a budgetary structural deficit that could “impede on future growth and the desirability of Winnipeg as a destination for prospective residents and businesses”; and “low property tax revenue has led to deferred capital investment and constrained service delivery.”
The council briefing acknowledges that the City has HARD fiscal choices to make. Those who worked on the AMB, many of whom have presented at committees this week, agree. But the difficult decisions we have taken are different from yours: we increase revenues rather than cutting services.
When you increase taxes by a mere 2.33%, and dedicate it all to roads and rapid transit, you’re effectively reducing spending in other tax-supported areas by the rate of inflation and population growth. And when you cut spending in community services, in urban forest maintenance, in transit, you weaken community responses to income inequality, environmental protection and in providing 21st century solutions to urban sprawl and equitable access to essential services.
In 2018, the AMB increased property taxes by 7.33%: 5% more than you did. We recommend that level of increase again.
A rough calculation shows that the additional 5% we would raise property taxes would bring in around $30M in 2020. That would surely allow you to at least maintain spending in community programming, our urban forest, and public transit. The average property tax in Winnipeg is $1,774: increasing the tax rate by 7.33% would add around $150/year, or $12.50/month to the tax bill. At $1924, the new average tax bill would still be the lowest in Canada.
And because these increase hit low-income people hard, we acknowledge that some sort of rebate program should be implemented to mediate the impact.
We also recommend that you begin to reverse the business tax cuts. Winnipeg is amongst the lowest-cost cities in NA in which to do business: business needs proper community services and a healthy workforce and should not expect ever decreasing taxes. A 5% increase would put the business tax at 5.2% and generate approximately $3M in taxes. That money could be dedicated to library services to help ensure a well-educated workforce that businesses could benefit from.
The AMB recognizes that the City relies too heavily on property taxes. It has recommendations for different funding sources – ideas that would alter behaviour at the same time as they raise money.
Some of those ideas are ground shifting and would require planning and provincial cooperation to implement. We hope you are planning for these sorts of policy changes as they are required if we are going to slow down climate change. An example is using mobility pricing to shift the cost of infrastructure maintenance to those who drive instead of using public transit, rather than using property taxes. Simply using one tool of mobility pricing, an ex-urban commuter fee, could raise $40M/year for the City (see The High Cost of Free Riding and How We Fix It available at https://www.policyalternatives.ca/publications/reports/high-cost-free-riding-and-how-we-fix-it ).
Other ideas would be easier to implement and could provide more immediate relief to our revenue dilemma: charging a tax on surface parking lots could bring in around $34M a year which could be used to maintain bus service so more people would be willing to use transit.
The October council briefing noted that “deferral of capital investment means the infrastructure gap will grow and key community needs won’t be met”. The AMB recommended that the City borrow more money on the capital budget so we could begin to deal with our $7B infrastructure deficit. We all know that the longer we let things deteriorate, the more it costs to fix them. Now is the time to borrow, while interest rates remain low. We estimated that if we borrowed $690M/year, it would cost $37.6M in debt servicing. I know, that’s a lot, but it would allow us to deal with our infrastructure deficit in 10 years.
In sum, I can’t agree enough with the conclusions presented in the October 2019 briefing to council. The 1990s were indeed challenging with high taxes, high debt and low population growth; the city hoped to stop the decline with tax cuts and operating/capital expenditure deferrals: but we know all this did was make things worse. Now, our situation is reversed: exceptional population growth (which is putting more pressure on services and infrastructure), combined with the lowest property taxes and spending per capita in the country has created a perfect storm of deteriorating services and infrastructure.
We respectfully propose that you take a more aggressive approach at dealing with this dire revenue situation by increasing property taxes to 7.33%, reversing the business tax cuts, borrowing more money for capital projects that are not related to NEW roads, and look at other ways of raising revenues while encouraging Winnipeggers to use public transportation.
If you do, you will put Winnipeg back in the ranks of Canadian cities that are not afraid to take decisive action, and you will win the support of thoughtful Winnipeggers who understand that there is a very high cost to low taxes. And I assure you that you will have the support of everyone who works in the community and environmental sectors.
Lynne Fernandez holds the Errol Black Chair in Labour Issues at the Canadian Centre for Policy Alternatives, MB.
US Democrat Bernie Sanders recently put forward a proposal to nationalize US electricity utilities. He sees nationalization of electricity production as a way to ensure that everyone can afford this essential service and he – and others, see it as a crucial means of addressing the climate crisis.
By Michael Barkman
Make Poverty History Response to 2019 Manitoba Throne Speech
Yesterday, Manitoba released its Speech from the Throne – the provincial government’s plan for the next couple of months while they’re in the Legislature making decisions.
Ending Poverty in Manitoba is a collective responsibility – one that deserves to be on the top of the priority list for any government plans. Poverty hurts communities.
We know that many instances of violence, theft, and crime in Winnipeg recently, and in the past, stem from the root cause of poverty and social exclusion. We will not stop crime without addressing the root causes. To address crime, we have to address poverty.
We know that for many, poverty is a cycle, emanating from the intergenerational traumas of colonization and the genocide of Indigenous peoples, which can be passed down between generations unless there is adequate support for basic needs, healing, and a hand up out of poverty. Poverty is a pervasive reality in our province – one that that impacts us all, whether first hand or because we share this community called Manitoba.
We know that austerity (cuts, cancellations, and favouring the rich & powerful) has made income inequality in Canada and Manitoba grow rapidly over the last three decades. And, while cuts have served to reduce budget expenditures in the very short term, poverty is costly – putting a burden on health, policing, justice, and families budgets. Austerity costs, poverty costs.
We know that the impact of climate change will disproportionately affect low-income and Indigenous communities in our province, and will greatly alter our economy impacting urban, rural, and Northern Manitobans.
We also know that our communities are resilient, strong, and resourceful. But, to really make a dent in the cycle of poverty in this province: we need the provincial government.
We need our provincial government to prioritize ending poverty with key investments, programs, proactive solutions and tackling root causes, and addressing the climate crisis head on through a just transition.
We need to see this plan as a keystone of any Manitoba throne speech.
It’s the only way we can make sure that everyone in our communities are included.
What We Really Needed from the Throne Speech
In the upcoming legislative session, Manitoba should immediately revise its poverty reduction strategy, committing to a bold target and timeline within a comprehensive poverty reduction strategy to reduce poverty and social exclusion in Manitoba. Addressing poverty through a comprehensive strategy is a key pillar to reducing crime, tackling the climate crisis, and strengthening Manitoba’s economy.
We can’t end poverty in Manitoba without a whole-of-government plan, connected to key economic, social, and environmental goals. Bold targets and timelines focus attention on what is to be achieved and by when. By setting goals, targets and timelines, there is a better chance that a policy will succeed and meet established outcome targets.
We believe Manitoba should commit to action on the following five priorities that are based on broad community consultations and stemming from the community-written poverty reduction plan, The View from Here. These key policies will have the greatest impact on both addressing the depth and root causes of poverty, and in affecting the widest number of people experiencing poverty. Manitoba should look to all the recommendations in the View From Here to implement as part of a renewed poverty reduction strategy.
We have reviewed our five priorities against the Throne Speech, knowing that we await many more details from the upcoming Legislative session and spring budget.
- Social Housing:
What We Need: Build at least 300 new social housing units annually for five years.
What We Got: Housing was only mentioned once in the Throne Speech, in relation to helping seniors age-in-place. While this is absolutely an important part of affordable and social housing in Manitoba, it is disappointing to not see a greater emphasis placed on housing, particularly reducing wait list for social housing units in Manitoba – a cost-effective method of reducing poverty and homelessness.
2. Livable Basic Needs Benefit:
What We Need: Increase the basic needs allowance for Employment and Income Assistance recipients to a level that will satisfy basic needs and support human dignity by creating a portable Livable Basic Needs Benefit.
What We Got: Manitoba has committed to creating a new income program for Manitobans with long-term disabilities, in response to calls from the highly successful community mobilization through the Disability Matters Vote campaign. We will continue to monitor the consultation and design process of this policy area as consultation begins this week.
Employment & Income Assistance (EIA) rates for all Manitobans are too low, and remain much lower than what’s needed to make sure everyone, including people with disabilities, single adults, seniors, and/or parents/families, can meet their basic needs. The welfare wall, a term that refers to the barriers that folks face transitioning from EIA into meaningful employment, remains insurmountable without rates that allow people to meet their basic needs, and supports for those who are willing to transition to the labour market.
3. Mental Health:
What We Need: Double the funding allotted to community-based mental health services for low income Manitobans.
What We Got: The provincial government promises to improve and enhance mental health and addictions services based on the recommendations of the Virgo report, and by the Illicit Drug Task Force and the Community Wellness and Public Safety Alliance. New programs include an acute medical sobering facility staffed by mental health professionals, supportive recovery and a 24/7 drop-in centre, and 12 new treatment & waiting spaces at HSC in Winnipeg for those suffering meth psychosis and other serious addiction and mental health issues. To address the needs of mental health and addictions throughout the entire province, we need to greatly increase the funding allotted to community-based mental health services and programs, particularly for low-income Manitobans.
3. Child Care:
What We Need: Create at least 17,000 subsidized, not-for-profit childcare spaces with priority in low-income neighbourhoods
What We Got: Capital grants will be extended now to the private sector, however the fees for these spaces are not regulated and so will be too high for low & moderate income parents. Additionally unless more capital funding is available, then this will stretch an already limited budget to the private sector as well. There was no announcement of an end to the freeze on operating funding for non-proft child care centres, the majority of child care providers. The province announced a new Portable Child Care Benefit for lower income families, if they can find a spot. It is unclear if this will mean subsidized child care for low income families will be clawed back.
5. Minimum Wage:
What We Need: Raise the minimum wage to a poverty line wage of $15.53 per hour.
What We Got: Minimum wage was not mentioned in the Throne Speech. While the throne speech maintains the government’s commitment to creating 40,000 jobs, the plan to help transition adults who are willing to work into meaningful employment remains unclear, as well as supports for employment intermediaries, training opportunities, community economic development, and cultural supports so that folks are able to maintain and thrive in a working environment.
Michael Barkman is the Chair of Make Poverty History Manitoba. www.knowpoverty.ca
Presentation to the City of Winnipeg Council
Molly McCracken, Director, Canadian Centre for Policy Alternatives – Manitoba
October 24, 2019
The Canadian Centre for Policy Alternatives is a non-profit charitable research institute active Nationally since 1980 and in Manitoba since 1997. Our research is peer reviewed and adheres to the Government of Canada Tri-Council Human Research Ethical Standards.
Every year we work with over thirty community-based organizations and front line groups on the State of the Inner City Report. Last December we launched “Green Light Go: Improving Transportation Equity” by Ellen Smirl to hundreds at the Circle of Life Thunderbird House. Smirl interviewed people lived experiences and found severe transportation disadvantage in Winnipeg’s inner city. Low income transit options are a central solution to this problem.
We applaud Mayor Bowman, Councillor Gilroy and Council for moving forward on a Low Income Bus Pass and your leadership in working towards social inclusion for those in our community who are economically marginalized. This is key to the City Charter Act’s mandate to maintain the health, safety, and welfare of the inhabitants. It is a key plank in Our Winnipeg, the vision and guiding policy framework for the City of Winnipeg. Sustainable Transportation envisions a safe, efficient and equitable transportation system.
I am a member of Make Poverty History Manitoba’s Steering Committee, and we are pleased Council is working on a City poverty reduction strategy in response to thousands of Winnipeggers who stood together for the call of Winnipeg Without Poverty.
A low-income bus pass is a key, game-changing idea within an overall poverty reduction strategy. I also should note the idea has been around for many years from anti-poverty advocates and the Alternative Municipal Budget published by our office. We are very pleased you are moving forward today.
The increase to the cost of bus fares in 2018 made the bus too expensive for some low income Winnipeggers, who have to choose between food and other basic necessities of life and getting where they need to go. Today the reality in Winnipeg is that there’s a single mom who has to push her stroller with her small kids for blocks and blocks through the cold wind to the grocery store and home to save the $6 round trip for bus fare for milk. There’s a teenager who can’t go to school because his parents can’t afford the bus fare. There’s a worker who can’t get to a temporary day labour job because he can’t afford the bus fare to get there. Look around our streets – Winnipeggers are suffering from poverty and low income options for transit are needed today, right now, to alleviate suffering in our City.
We recommend Winnipeg City Council:
- Implementing the LIBP faster than the current schedule, at 50% in 2020 – 2021.
- We need a single fare option: 50% off on a $100 bus pass helps, but it is still too high. Many low income people don’t buy a pass but do single trips. We encourage single fares at a discounted rate as soon as possible. There should be an option for bus tokens be provided pro bono to community-based organizations who serve low income people and the homeless.
- The best practice is a sliding scale low income bus pass program as is the case in Calgary. We encourage the City to look further into this model ASAP.
- Free transit for children to age 11 is also being considered by City Council, we encourage you to raise the age to include youth up to age 18. The Manitoba Teacher’s Society named free transit as their second highest priority to support improved educational outcomes for low income children after in school breakfast programs.
- Improve access to transit by improving Transit Plus, prioritizing snow plowing around bus stops and improving service overall.
- None of the above should be done by cutting service, salaries or benefits of bus drivers and City of Winnipeg support staff.
- The current proposal has a requirement to reapply every year. We encourage the City to use an approach that is easy for households to requalify for a low income bus pass. Low income people have to jump through many hoops, as we found in our report “It Takes All Day to be Poor”.
- Currently the evaluation process as stated in the Stakeholder Engagement Process is with users of the LIBP only. A thorough process to evaluate the LIBP by talking to both those who use it, and those who are low income and aren’t using it should be adopted.
CCPA Manitoba and Make Poverty History Manitoba, along with our allies Functional Transit Winnipeg continue to call on the Province of Manitoba to do its part and restore the 50/50 funding agreement for Winnipeg Transit. We are pleased to see you will be approaching the province to contribute its part of the EIA portion of the low income bus pass costs.
The reduced-fare pass currently proposed is a good first step to help some people with low incomes get around Winnipeg to participate in the life of the community. I offer the above points as constructive feedback to improve upon it. Thank you for your attention.
For Immediate Release (Winnipeg):
People who work at minimum wage jobs are being sought for a new study about the lived experience of earning a minimum wage. The Canadian Centre for Policy Alternatives – Manitoba office is launching a new research project today to focus on the human experience of earning a minimum wage.
“We want to learn what people working for minimum wage think about their wage – is it at the appropriate level? What effect does working for minimum wage have on their lives” says researcher Ellen Smirl. Participation is confidential and anonymous. Participants receive a $25 cash honourarium for their participation. Interested participants are asked to contact the study via email this confidential email address: firstname.lastname@example.org
This study will also document aspirations of minimum wage workers, level of satisfaction with their current job and level of interest in further education and / or different work. The study will probe for match of current job with level of education to test what’s found in the literature – many workers cannot find decent work that matches their education. The study will include a literature review and a review of trends in minimum wage compared to the cost of living and the poverty line in Manitoba. The study has received ethics approval from the University of Winnipeg’s Human Research Ethics Board.
This study seeks to talk with racialized workers in particular. We will also focus on gathering data from workers in Winnipeg, Brandon and Thompson. The study will interview 50 workers, the findings will be analyzed, summarized and compiled in a peer reviewed final report for public launch and presentation to government and civil society in Spring 2020. The qualitative aspect of the study is being conducted by Ellen Smirl, Community Researcher at CCPA Manitoba. Jesse Hajer, faculty at the University of Manitoba in Economics and Labour Studies is leading the quantitative analysis. Student researchers from the University of Manitoba are also involved in the research project.
In 2017 the province of Manitoba passed The Minimum Wage Indexation Act, which indexed the $11/ hour minimum wage to the rate of inflation. The change takes place every October 1st.
About the Canadian Centre for Policy Alternatives
The Canadian Centre for Policy Alternatives (CCPA) is a non-profit charitable research institute active Nationally since 1980 and in Manitoba since 1997. www.policyalternatives.ca
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By Chris Rigaux and Tanya Andrusieczko
First published in the Winnipeg Free Press September 23, 2019
September 10th’s election results were disappointing for progressive Manitobans who were looking for a decisive shift towards economic justice. We face four more years of austerity, cutbacks, and crumbs for the working class. The Progressive Conservatives were clear during the campaign that raising the minimum wage to a living wage is not their priority, and they intend to keep Manitoba in its shameful position of having the second-lowest minimum wage in the country. At a stingy $11.35/hour, due to increase by only 30 cents in October, this is a poverty wage that traps minimum-wage workers in low-wage work.