Tax Fairness Forum


The Canadian Centre for Policy Alternatives-Manitoba and the Social Planning Council of Winnipeg invite you to attend a forum on tax fairness.

Tax Haven in the Snow:
The demise of Canada’s progressive tax system and how to restore it

June 5, 2012
1-4pm
Carol Shields Auditorium
Millennium Library

With:

  • Linda McQuaig – author and Toronto Star columnist
  • Ian Hudson – University of Manitoba professor and CCPA research associate

Some of the discussion will focus on:

  • What would a fairer tax system look like?
  • Would a fairer tax system undermine Canada’s competitiveness?
  • What should be the priorities in a campaign for tax reform?

Register by June 1, 2012, by calling 204-943-2561 or emailing info@spcw.mb.ca

To download the poster for the event visit the Social Planning Council of Winnipeg.

Tax Fairly, Spend Wisely

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by Ian Hudson

According to CBC news, 45% of Canadians wait until the last week before the deadline to file their tax returns. The mad pencil sharpening, digging through receipts and online filing is unlikely to generate a great deal of goodwill towards the tax collector. Perhaps this is why the Winnipeg Free Press chose April 30th to run two anti-tax View from the West editorials from the Fraser Institute and Canadian Taxpayers Federation. The Fraser Institute claimed that Canadians paid lots of taxes, the Taxpayer Federation argued that the provincial NDP had a bad spending problem and that we should be braced for “more NDP tax increases.”

While these articles are correct in arguing that government should be accountable and that we need to know how much tax we are paying (and just who is paying them) simply totting up taxes paid without also acknowledging what we get for them would be like leaving the grocery store enraged at your bill without noticing that there was a bunch of food in your cart.

The Fraser Institute article was especially misleading on this front. It diligently added up every dime that Canadians paid the government. Yet there was no acknowledgement that the government also transfers income to Canadians. In fact, the redistributive function performed by government ensures that all Canadians meet some sort of basic standard of living.

According to Statistics Canada, in 2009, the average Canadian family of two people or more received a tidy $10,200 in transfers from all levels of government. Importantly, lower income families received more than richer ones. The average family in the bottom 20 percent of Canadian income earners received over $14,000, while the richest 20 percent got a much more modest $5,800 (1). Merely adding up taxes going to government, without including transfers from government, creates a badly misleading picture on the supposed costs of the state.

It is not overly complicated to get a picture of just who benefits from the tax and transfer system. The table below compares the income earned from “market” sources like your job and income from investments and what Statistics Canada calls after tax income, which is your market income plus the transfers that you get from government minus income tax. Note that this does not include all taxes, like sales or property tax for example, so it is not a complete measure of what government puts in, and takes out, of people’s pocket. But it does provide an illustration of how people of different incomes are affected by the government.

In both Manitoba and Canada as a whole, those in the lower income distributions receive far more in transfers than they pay in income taxes. As we go up the income ladder, the government offers less in transfers and takes more in taxes. If the government did not transfer income, or collect income taxes, the average income of the richest 20% of Canadians would have been 25 times the average income of the poorest 20%. After income tax and transfers that number is only 9 times.

The same is true for Manitoba. The average market income of the richest 20% of Manitobans is 19 times that of the poorest 20%. For after tax income, the ratio is a much more modest 7 times. So, examining only what we pay, as the Fraser Institute does, ignores the fact that the government uses some of what it takes to give back to families. Further, in its giving and taking, it creates a much more equal society. Unfortunately, it appears that this crucial role is being compromised and is not helped by editorials like those in the Free Press. One Statistics Canada study in 2009 found that after 1995, the tax and transfer system has become less redistributive, particularly due to changes in social assistance levels (2).

Of course, this calculation only includes one form of government benefit – income transfers. It excludes all of the other benefits that we receive from the government in the form of goods and services, many of which benefit all Canadians. To provide just one example, the average American family paid just over $13,000 for health insurance in 2009 (3). Canadians receive the benefit of health insurance when they pay their taxes.

In fact, government is much better suited to providing some goods and services than the current private sector provision, which would create a case for tax increases. One quick example is tree banding, which used to be provided by the City of Winnipeg. Courtesy of municipal cutbacks, tree banding on Winnipeg boulevards is now left up to the individual homeowner, a ridiculous state of affairs since just one non-banding neighbour can ruin the tree protecting efforts of the rest of the block. The principles underlying the irrationality of private provision in this simple, but familiar, case extend to many other goods and services.

Ignoring what we receive in return for our taxes ignores the fundamental tenet of tax policy, which is to tax fairly and spend wisely.

Notes

1 Statistics Canada. Government Transfers and Income Tax. http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil88a-eng.htm

2 Frenette, M., Green, D. and Milligan, K. “Looking for Smoking Guns: The Impact of Taxes and Transfers on Canadian Income Inequality,” p. 30.

3 Fritze, J. 2009. “Average Family Insurance Policy $13,375” USA Today, September 16. http://www.usatoday.com/money/industries/health/2009-09-15-insurance-costs_N.htm

Celebrating Social Housing!

On Friday, May 25, there will be a Celebration of Social Housing at Lord Selkirk Park.

Everyone is welcome, so please spread the word!

Turtle Island Recreation Centre
510 King Street
May 25, 11:45am

Organized by the Right to Housing Coalition, the Lord Selkirk Park Community Advisory Committee, and the Let’s Defend Our Social Housing campaign.

Operating agreements for social housing: the beginning of the end?

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by Carole O’Brien and Sarah Cooper

Social housing plays an essential role in meeting housing needs for low-income households in Canada. One of the most pressing issues facing social housing providers is the imminent expiry of long-term operating agreements. These subsidies, established by the federal government from the 1950s to early 1990s, were meant to pay the debt on social housing mortgages and assist with operating deficits, covering the difference between rents paid by low-income households and operating expenses. These agreements were struck for periods between 25 and 50 years.

When the agreements were designed, it was presumed that once mortgages matured, cash flow requirements would fall and housing projects would be able to continue offering affordable rent levels without subsidies. However this has not been the case, and in 1993 the federal government began their retrenchment from social housing by transferring financial responsibility for social housing to the Provinces.

As these agreements end they are not being renewed despite increasing costs. Social housing providers have begun to experience the loss of funding as their operating agreements expire, yet poverty continues to deepen and the number of homeless people in Canada is on the rise. Social housing providers find that in the context of rising costs, maintaining low rents is near impossible.

In 2011, Steve Pomeroy prepared a report about the impending end of federal social housing subsidies. The report examined 200 agreements, covering 9000 units of social housing. Since it was not a statistical analysis, it cannot be generalized to all social housing agreements. It nevertheless raises important questions and concerns about the viability of non-profit housing providers once the agreements expire.

Pomeroy found that after the subsidies ended more than half the units reviewed would have sufficient income to cover their operating cost, but 70 percent of units would have insufficient capital reserves. Pomeroy also found that 40 per cent of the agreements (or 31 per cent of the units) would be non-viable without subsidies, while 80 per cent of the agreements would be at risk at the end of their operating agreements. In other words, without enough income to cover operating costs and/or insufficient reserves to cover capital costs, the ability of these housing providers to maintain their properties would be severely at risk.

Pomeroy states that “massive loss of existing stock is unlikely, however there remains considerable uncertainty and a not insignificant degree of risk that some properties will absolutely be lost and in other cases the number of deeply targeted units may be reduced (as providers seek to improve revenues and viability by selecting less needy tenants)” (Pomeroy 2011, 11).

Housing providers whose units are 100 percent rent-geared-to-income (RGI) are especially vulnerable when their operating agreements expire, because the rental revenues they can realistically collect are insufficient to cover the operating costs of the housing projects. This is a particular challenge for urban Aboriginal housing providers, who serve households with very low income levels and that are in need of deep RGI subsidies. The assumption underlying the operating agreements, that once mortgages were paid off projects would become viable, does not account for this reality.

Urban Aboriginal housing providers also face an additional challenge. While public housing is owned by the provinces/territories (municipalities in Ontario), Aboriginal housing is not, and is more dependent on federal subsidies. Without the financial support offered by operating agreements, and with limited rental revenues, some Aboriginal – and other – housing providers are now being forced to look at options such as selling units or moving units to market rent to create more revenue. Although this may preserve many units, it reduces the overall numbers of social housing units available, particularly for the lowest-income households.

An earlier CHRA study (2006) calculated that once all the operating agreements expire, around 2040, federal and provincial/territorial governments would economize about $3.5 billion annually. This raises questions about what to do with the dollars saved through reduced expenditures. Housing activists are also raising questions about the CMHC surplus, which was collected through housing activities in Canada. The 2006 study called for a reinvestment into housing projects experiencing viability issues, or assisting with capital replacements, since these housing assets are paid for and it would be less expensive to reinvest in them than replace them.

Given the current homelessness crisis, another use of the CMHC surplus would be to expand the affordable housing stock, especially where the need is greatest. Sharon Chisholm, former Executive Director of the Canadian Housing and Renewal Association, suggested that “[I]f the federal government were to say that it will hold the line on the existing budget, if not increase it, 80% of that budget could be used to create new housing. By the time mortgages are paid off, that could add 21,000 units of housing a year. If the provinces keep their pedal to the metal and partner, that could double” (Standing Senate Committee, 2009, p.87).

In the current political landscape, housing activists will need to redouble efforts to convince politicians to develop housing policies that reflect the real affordable housing needs of all Canadians. From maintaining units in good condition to subsidizing rents, the subsidies provided through the operating agreements provide housing for thousands of households that cannot afford market housing. Social housing is, and will always be, an essential part of Canadian cities. We must protect it.

Carole O’Brien is a student in the Master of City Planning program at the University of Manitoba and a member of the CCPA-MB board.
Sarah Cooper researches housing and community development at the CCPA-MB.

The Challenges Facing Labour

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By Errol Black and Jim Silver

Formidable challenges face Canada’s labour movement. Meeting these requires organized labour to reclaim its historic role as the progressive voice of all working people, and as an active participant in broader struggles for social justice.

The Challenge

The proportion of working people who are unionized has collapsed in the U.S.A. In 2010, 12% of all U.S. workers and 7% of private sector workers were unionized. These numbers may decline further, because powerful right-wing forces in America have launched a crusade not to weaken, but to obliterate, public sector unions.

In Canada, rates of unionization remain higher than in the U.S.A. (31.2 % overall; 17.4% in the private sector), but anti-union sentiments are rampant. Right-wing governments blame union members for our economic woes, and erode the right to strike. Private sector employers demand concessions and repeatedly resort to lockouts to get them. Unions are scapegoated as outdated institutions whose demands for improved collective agreements and social legislation are an obstacle to the country’s betterment. These pressures are intensified by the erosion of manufacturing in Canada, and growing investment by anti-union entities such as the Koch brothers in oil and resource industries and Target (joining Walmart) in retail trade.

Meanwhile, those orchestrating the attacks on unions grow ever richer, while the incomes of working people decline. Between 1980 and 2009, market incomes (before taxes and transfers) of the top 20 % of income earners in Canada grew by 38.4 %, while incomes of the middle 20 % fell by 0.3 %, and incomes of the bottom 20 % fell by 11.4 %. At the same time the tax revenues needed to support the public goods that enrich working people’s lives have been eroding: in the 1960s people’s federal taxes were 25 % of corporate profits; in 2010-2011 they were 16.6 % of corporate profits. These data make clear where the real economic problem lies. They are the direct result of the neoliberal strategy imposed upon us over the past 30 years.

We Need a Different Frame

Given these economic realities, it is important to re-frame unions in a more accurate light: as leaders in efforts to build a better world for Canadians. It was trade unions and the labour movement that joined with progressive popular groups to fight for and win union and collective bargaining rights for workers, old age pensions, unemployment insurance, Medicare, the Canada Pension Plan, programs to protect the poor, decent minimum wages and employment standards, libraries, expanded access to education at all levels, workers’ compensation and workplace health and safety legislation, and the housing and infrastructure required to build decent communities for working people and their families. Not only does the union advantage produce higher wages and improved benefits for union members, but also unions bring the rule of law to the workplace, placing limits on the arbitrary power of owners and managers–thus enriching democracy and our individual and collective human r ights.

These are enormous achievements from which all Canadians benefit.

We need to be relentless in saying these things.

What is to be Done?

It is equally important for unions to act, as they have done historically, to assert their role as key players in struggles for social change, in the workplace and broader society.

In the present circumstances, these struggles must begin with defending past gains and making new ones in unions’ direct relations with employers. Because labour policy has such an important effect on workplace struggles, unions need to mobilize workers to oppose actions by governments that weaken unions, and support campaigns for legislative changes that would strengthen union rights, on the grounds that improved union rights accrue to the benefit of almost all Canadians.

It is vital also that the labour movement intensify efforts to organize the unorganized. Almost all Canadian have benefited when organizing drives have brought industrial and public sector workers into the union fold. We would all benefit if the vast numbers of precarious workers in retail trade, accommodation and food services, and other industries dependent on cheap labour were to be unionized. At the same time, of course, it is important that unions maintain quality services for members as a means of fending off challenges and raids from organizations promoting acceptance of employer demands.

As if these many challenges were not enough, unions must also expand their presence in broader struggles for social justice. This includes struggles to defeat poverty, to ensure quality housing and childcare for all, to establish a national Aboriginal strategy, and to build a productive economy. Such a presence will strengthen the campaigns for social justice and help to revitalize the labour movement.

These things, it goes without saying, are easier said than done. They require resources, skilled and dedicated organizers, and the political will and courage to act. But there are tens of thousands of young and not-so-young people eager to build a better world. They can be brought into this effort by making unions exciting places to work–places where real change happens, where bright and energetic people use their skills to take this country back from the right-wing ideologues that are destroying it.

Conclusion

To some this may sound naïve, or clichéd. It may seem to be a hollow and ritualistic call to arms, long since outdated, part of the “old thinking.”

But the idea that this is “old thinking” is simply more evidence of the success of right-wing “think tanks” and the Conservative Party and their supporters, in promoting their socially destructive ideas.

The truth is, we need to fight back. But not just that. We need to set out a vision of a better, more just world, and fight for it. Unions–as has been the case historically–have a central role to play in our doing so. To think otherwise, given the relentlessness with which the Right is pushing their regressive vision, is naïve.

Time to Expand the Manitoba Advantage

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by Lynne Fernandez and Errol Black

There has been much discussion about the direction Manitoba Hydro (MH) is heading in and the role it should play in our province. It’s an important discussion to have because MH is one of the most significant drivers of our economy.

As a Crown Corporation, MH wields great potential as a tool for regional development within the province and expanding the role of Manitoba in Western Canada’s economy. Substantial investment has created a competitive public utility with billions of dollars of capital assets – and great capacity for the creation of profit. This capacity makes it a constant target for privatization, a threat that persists despite assurances from those who would privatize that they have no such aspirations. Privatizing MH would have dire consequences for Manitobans, including the removal of the corporation’s ability to steer economic development through its procurement policies and training programs (tools not available to private corporations). Others point to MH’s lower than private-market rates and argue that an increase would boost profitability and convince people to conserve. However, our low rates attract businesses to the province, keep existing businesses competitive and make our province one of the most affordable places to live in Canada (the so-called “Manitoba Advantage”).

MH has played other important roles in our economic development. It has ensured that remote communities – that would not have been serviced by privately-owned power companies – have access to electric energy. Publicly-owned utilities also acted as risk taker or insurer of last resort in the development of large hydro projects – projects the private sector never would have taken on, but which now, ironically, make the corporation a target for privatization. MH also engages in leading-edge research and development. Indeed, Hydro is internationally recognized as a leader in high voltage transmission technology of the DC variety. This ability to advance new technology should drive a comprehensive regional development plan to replace fossil fuel energy.

MH does a good job of educating Manitobans about the virtues of conserving energy through its Power Smart program. In his book Build Prosperity: Energizing Manitoba’s Local Economy (2012), Shaun Loney describes how more can be done to use our energy resources more efficiently. As well, the possibility of implementing a sliding price scale that would increase with high volume use could be considered, but such a scheme would have to consider the overall economic and social objectives of the province.

Recently MH has come under fire for its medium and long-term plans to increase exports to the US. There is concern that demand for hydro power will decrease as lower-cost natural gas from fracking technology (the process of injecting high-pressure water into shale rock to extract natural gas) comes on board. The jury is still out on whether or not this new technology is going to be a major player in the energy market, particularly given environmental concerns. We are also waiting for the US economy to recover from the Great Recession so that demand for energy is restored. These developments demonstrate that future demand is impossible to predict one way or the other, but it is unlikely that demand for our energy is going to disappear. Two foreign customers (Wisconsin and Minnesota) are committed to buying energy classified as sustainable: MH’s product meets their criteria.

Another way that MH could boost demand for its product AND boost local development is to formulate a comprehensive plan for local public transportation using electric vehicles.

The province and the city are currently working on the development of a rapid transportation system for Winnipeg which, as critics have noted, is a laggard in this regard. The Vancouver Sky Train (1986), the Calgary C-Train, the Montreal Metro (1960s) and the Toronto subway are cited as examples of modern transportation systems. All of them are powered by electricity. Why are we not exploiting hydro-electric power to build and run a modern transportation system?

In fact the province is already encouraging the development of an electric bus with a recent $1 million investment in collaboration with locally-run New Flyer Industries, Mitsubishi, Manitoba Hydro and Red River College. Slated to be ready for testing one year from now, this new technology could be the basis of a comprehensive economic development initiative that would allow Winnipeg to finally realize its transportation master plan as it phases in electric buses to an expanded rapid transit system.

A modern rapid-transit system should be at the heart of our vision for future development. Indeed, one could argue that failure to develop such a system will impair, at great cost, the growth potential of both the province and our capital city.

There would be no reason to stop at buses. The province is also partnering with Red River College to develop an “electric vehicle learning and demonstration centre”. It makes perfect sense to encourage technological development in this area and to provide incentives to Manitobans to adopt electric-car technology. This demonstration centre could lead to a new program at Red River that would attract new students to the province. With MH as an active partner, Manitoba could become a hub for the development and use of new electric transportation technology and expanded generation and transmission of wind and solar energy.

Even a divided Winnipeg City Council could not deny the benefits of such a plan. Not only would Rapid Transit get the support of provincial investment in the form of new technology, it would see local industry and employment grow at the same time. By expanding in the value-added manufacturing sector, important backward and forward linkages would be established that would benefit both the private and public sectors. A bi-lateral agreement between the city and province could herald a new era of inter-governmental cooperation that would result in substantial economic, environmental and social improvements in our province. Demand for hydro power would increase, thereby raising Hydro’s profits, allowing it to keep rates low, provincial revenues high and even increase subsidies for municipal public transportation and green technology research.

Our export market will continue to have its ups and downs, whether from new technology, weather variations or the vagaries of our volatile economic system. One way of smoothing out demand is to exploit our own potential here at home: MH gives us the perfect vehicle to do just that.

Lynne Fernandez is a researcher at the CCPA-MB. Errol Black is on the board of the CCPA-MB.

Winnipeg Firefighters Campaign For Fire Insurance For Low-Income Renters

by Errol Black

Residential fires are commonplace in Winnipeg. Often these fires affect low-income people renting accommodations in apartment blocks or other forms of residences. Almost without exception reports on such fires include interviews with tenants who have lost everything they owned and are without insurance.

According to a story in the April 21, 2012, Winnipeg Free Press, prior to Christmas 2011 “United Firefighters of Winnipeg president Alex Forrest pledged to lobby the province, landlords and the insurance industry to solve [this] problem.” When the government announced in the budget that the PST be imposed on, amongst many other things, home and tenant insurance, it was noted that the tax on insurance would not improve the situation. Forrest suggested that part of the revenue from the tax might be used to cover low-income tenants who aren’t able to afford insurance.

The situation of low-income renters is a result of many factors, including the ongoing conversion of rental property to condos and the growth in low-wage, short-hour jobs in the labour markets. However, under no circumstances should people end up losing “everything” they own in a fire and not be able to replace it because they can’t afford insurance. We believe that the Winnipeg firefighters’ demand that the province find a way “to insure the poor” has much merit.

Errol Black is a member of the CCPA-MB Board.

Budget 2012: Deficit Budget Creates Surplus of Spin

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by Lynne Fernandez and Shauna MacKinnon

We went to the provincial legislature yesterday to review the budget and prepare our analysis. Our pre-budget predictions were accurate. We found a little bit of this and that; nothing of significance to address poverty and inequality.

We were mildly encouraged by the 2.5 cent/litre gas tax as well as tax increases on cigarettes and luxury services. We would have liked to have seen more tax increases, especially on large corporations and the very wealthy, but we know that long-overdue move is a work in progress. We couldn’t help but observe that cumulative NDP tax cuts since 1999 will afford a $1.2 billion “saving” to Manitoba tax payers, while the amount of the deficit is $1.12 billion. Does anyone else see the possibility of a surplus here?

We did not expect business groups or the official opposition to share our perspective on raising taxes back to a more reasonable level – after all they’re responsible for the decreases in the first place, but we did hold on to some residual of hope that the media would provide more balanced coverage of the budget.

How naïve we were.

It turns out that analysing the media’s reaction to the budget is more informative than analysing the budget itself. One radio station immediately declared the 2012 Manitoba budget story to be all about tax increases. Really?

That was followed by various media interviews with ‘regular folks ‘concerned about the rising cost of haircuts and pedicures. Other post-budget reaction includes outrage over the gas-tax increase and the $35.00 increase for vehicle registration. While there certainly needs to be some sort of mechanism to rebate these increases back to low-income earners, these are not unreasonable increases. The job of government is to pool our collective resources to maintain public services and infrastructure. This year in particular we need to pool our resources to pay for the unanticipated costs of the 2011 flood.

It’s surprising that there hasn’t been much mention of the $250 increase in the personal income tax exemption. We would have preferred a more targeted approach to increase incomes of low income households. We agree that tax measures are needed to assist lower income earners but the cumulative effect of applying it across the board will end up being a burden to those who need the break the most. High income earners benefit the same as low income earners and the “saving” removes $19.3 million from revenues. It’s interesting that this is almost exactly the amount required to increase the Employment and Income Assistance (EIA) shelter allowance to a mere 75% of median market rent. The current shelter allowance varies between $285 (for a bachelor apartment) to $513 (for a three bedroom apartment). Who can find a decent place to live for those amounts? We believe that most Manitobans would agree that they could live without that negligible difference in their income tax, especially if they knew how much it would benefit very low income families.

To be fair, there were a few small gestures of balanced coverage offered up. One example is the CBC Radio One interview with a representative from the Manitoba Trucking Association. The spokesperson acknowledged that the gas tax increase was long overdue, and connected the dots between the increase and the benefits of investing in infrastructure. He correctly stated that our roads are in great need of repair and they “aren’t going to fix themselves”.

Connecting the dots is precisely the media’s job; it allows the consumers of media to be better informed and make more rational decisions as they participate in the democratic process. Media could for example provide more context about our $1.2 billion deficit and its significance as it relates to the overall budget. They could examine the deficit in the context of unanticipated events such as the global economic recession and the 2011 flood. They could examine our situation in comparison with other provinces and explain that Manitoba is in a relatively good position.

Economist after economist has noted that our total government debt is moderate, reasonable and being handled appropriately. Indeed total debt is forecasted to be 27.4% of GDP, a moderate and perfectly manageable ratio that is far lower than when the NDP took power from the Conservatives in 1999. We also have one of the lowest unemployment rates in the country and some of the lowest living costs.

To suggest, as Shannon Martin does in today’s Winnipeg Free Press, that our tax rates should match Saskatchewan’s is shortsighted at best. Both Saskatchewan and Alberta have access to resource royalties that amply pad government coffers, making it possible for them to spend while keeping taxes low. Just looking at tax levels without considering incentives and rebates makes it impossible to see the net cost to tax payers. It may be Mr. Martin’s job to obfuscate the issue to suit his organization’s interests, but it’s the media’s job to shed some light on these issues, including the benefits of government spending.

In fact when all the dots are connected, not spun, the province doesn’t spend enough. There are many deficits that this budget does not discuss: the housing deficit; the EIA shelter allowance deficit; the childcare deficit; the education and job-training deficit. But when the media spins the dots instead of connecting them, the media hype ends up being all about tax increases and irresponsible spending rather than the need to increase spending to deal with our most pressing problems.

Lynne Fernandez is a research associate with CCPA Mb: Shauna MacKinnon is director.

$7 Million Slip Sliding Away

Last week, Winnipeg city council announced a proposal to build a hotel and waterpark on Parcel 4, at The Forks. This is after years of looking for a private developer to build a water park in exchange for a $7 million dollar subsidy.

Using public money to support private business is not a good deal for Winnipeg. The city would be better off investing the $7 million in recreation for inner city youth who currently have little or no access to sports facilities or programs. This is especially true when the City claims to not have enough money for recreation – or rapid transit, which the money was originally earmarked for.

The fact that it has taken since 2008 for the City to find a developer willing to build a water park, even with this subsidy, should raise red flags about the idea. And at The Forks? Right next to the Human Rights Museum? Maybe the Winnipeg Sun’s April Fool’s joke this year wasn’t that far off.

Our questions remain:

  • Why is this process being rushed through council without adequate time for councilors to consider the issues?
  • Why has there been no discussion of how the public would like to see the Parcel 4 site being used, particularly when public money is on the table?
  • Why has Mayor Sam Katz not recused himself from the discussions and decisions made thus far, as he is the majority owner of the Goldeyes, which will be affected by decisions made by council about Parcel 4?

Next steps

The Executive Policy Committee will be voting on this issue on Wednesday, April 18th. Council is expected to vote on it on April 25th. You can attend or present at the meetings: call 311 for more information.

It’s Budget Time Again: A glimmer of hope and a healthy dose of skepticism

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by Shauna MacKinnon

On April 17th Minister Stan Struthers will release details of how the Province will manage our money this year. Here is how the process will unfold.

A few pre-budget day announcements will be, or have been, made to manage expectations and set the tone for budget day. We’ve been warned for months that the budget will be tight and that “tough decisions” must be made. It’s true that Manitoba is faced with significant unanticipated costs resulting from the 2011 flood and global economic uncertainties to which Manitoba is not immune.

Print and other media will publish some predictable commentaries pre – and post-budget day. We can expect those claiming to represent the business community and ‘taxpayers’ to call upon the government to ‘create an environment for investor confidence’ by “cutting taxes” and “removing red tape”. Organizations pegged as ‘left leaning’, ‘anti-poverty’or ‘special interest’ groups will call upon the government to make significant investments to prevent crime, reduce poverty, better care for the environment, and so on.

In keeping with the theme of ‘predictable’, my colleagues and I will make our pitch for a budget that prioritizes reducing poverty and inequality. Our pitch will be met with a mix of yawns, eyerolls, nods of agreement and indifference. What we say won’t make much difference anyway because the budget is written; spending and revenue decisions have been made. But we will continue to say it anyway in an effort to raise awareness of how critical these problems have become for all Manitobans.

Whether we want to believe it or not, the effects of poverty are very real across our province, and they are taking a social and economic toll on us all. For example, in Winnipeg, pockets of poverty exist throughout the city, but it is most concentrated and deeply entrenched in the inner city and in the North End, and has been for many decades. This persistence of poverty has led many to feel hopeless; to turn to strategies of survival that sometimes include ‘bad choices’. The effects of poverty include hopelessness and despair that often lead to ill health, violence, addictions, suicide, and the list goes on.

The Province and other funders invest in a number of excellent community initiatives that are doing exceptionally important work. These organizations provide opportunities for people, and this helps to minimize the despair and hopelessness. But it is also true that many people do not have the basic foundations to take full advantage of the opportunities that are provided. The poorest Manitobans are often forced to move, sometimes crowding in with family and friends. They often need most if not all of their household income to pay their rent, leaving little for food and other basics.

Poverty will not go away on its own and we cannot escape the damage it leaves behind. Our failure to invest what is required is creating insurmountable problems that affect us all. Most people living in poverty manage to overcome the obstacles but many do not. For example, many kids don’t bother to go to school because they can’t see past the immediate crisis in their lives, and it is hard to think about the future when you don’t know where your next meal will come from or where you will sleep that night. It is not uncommon for these children to drop out of school, turn to drugs, have children when they are still children themselves, or succumb to the pressure and allure of street gang life. Sure, we can blame it on parents or somebody else, but what good does this do?

These problems will not be resolved by the good work of food banks, soup kitchens and after-school programs. These supports are important, but without adequately investing in the basics, we are spinning our wheels. There are many things that government can and must do. They all require considerable public investment and a rethinking of how we redistribute wealth.

Here is one thing that we would like to see in this year’s budget.

Strong foundations begin with having a safe, stable, affordable home. The Province has been making progress in this area by creating more social housing, but they have yet to ensure that the poorest Manitoba households, most of whom live in private sector housing, have sufficient income to pay their rent. People receiving social assistance receive allowances far below the cost of housing. The Province should increase the allowance so that the poorest Manitobans receive a housing allowance at 75% of the median market rent. Recent government estimates show that this would cost the government less than $20 million annually. Sound like a lot? It’s not, it’s far less than 1% (approximately .14%) of the provincial budget and it goes directly back into the economy. The cost to government could be offset by a slight tax increase on the incomes of the highest earning Manitobans–the 1% earning over $150,000 per year.

What can we expect on budget day?

We can expect to see a safe budget that will include a little something for everyone. It will include small measures to appease the middle class–just enough to make us feel that all is good in the world. A few concessions will be made to keep the business community from crying ‘socialist’; and there will be a little bit left over to keep the pesky poor people from revolting. And just to make us all feel really safe, the Minister of Justice has already assured us that the Province will spend a ton on new jails–exactly the wrong kind of housing program.

On budget day we will gather at the Legislative Building, with a glimmer of hope and a healthy dose of skepticism. None of us are likely to be thrilled with what we see, but two things are for certain. We won’t see a budget that will make a significant dent in poverty in 2012. And we’ll be back next year doing this all over again.

Shauna MacKinnon is the Director of the CCPA-MB.