Manitoba budget includes PST increase for infrastructure, flood protection

The Manitoba government has announced a planned increase to the provincial sales tax in its budget for 2013, as part of a plan that would address flood protection and upgrades to infrastructure in the province.

 The proposed increase in PST from 7% to 8% – part of the government’s new Manitoba Building and Renewal plan – is the “fairest way possible” for funding critical infrastructure and flood mitigation projects, the government said. Legislation for the changes will be introduced by the government this spring.

The PST increase would provide a “dependable revenue stream to match federal infrastructure spending, so we do not leave any federal funds on the table,” Stan Struthers, the province’s finance minister said in his budget speech.

The measure would expire in 10 years, when the federal Building Canada Plan would also expire, Struthers said.

Severe flooding in Manitoba in 2011 caused major damage around the province, and potential flood protection investments outlined in recent reports could cost up to $1 billion, Struthers noted.

Read more: Manitoba government says many flood recommendations already underway, costs could reach $1 billion

Two points of PST revenue would now go to infrastructure under the government’s plan, Struthers said. “One seventh of PST is spent on municipal infrastructure through the Building Manitoba Fund,” he said.

“That amount will  increase by almost $30 million this year. The remainder of the total two points of PST will be used to support flood prevention infrastructure, as well as additional capital investments – from hospitals to hockey rinks, from schools to splash pads.”

Struthers also noted that the province needs to take a “modern approach” to flood protection. “We know our climate is changing — and the consequences will be far-reaching and unpredictable,” he also noted. “The responsibility to build better protection against future floods now falls to us.”