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This article was published 25/5/2017 (1212 days ago), so information in it may no longer be current.

The Pallister government is abandoning a longstanding commitment to cover 50 per cent of municipal transit costs.

It is also removing the guarantee to devote the equivalent of a percentage point of PST revenues toward municipal infrastructure projects.

The changes to the Municipal Taxation and Funding Act were included in a 68-page omnibus bill introduced in the legislature Thursday as part of the annual provincial Budget Implementation and Tax Statutes Amendment Act (BITSA).

BITSA would also impose greater penalties for those transporting contraband cigarettes and those who fail to pay their provincial taxes. As well, there would be a two-year moratorium in funding to political parties at the legislature for certain expenses, such as mailouts to constituents.

NDP finance critic James Allum said it's a "considerable disappointment" the province is ending the commitment to funding 50 per cent of transit costs in excess of operating revenues.

"We know that that’s not the way to build progressive cities," he said. "That was a historic partnership between the City of Winnipeg and the province in order to ensure that we have the best possible transit system."

The tying of municipal infrastructure funding to PST revenues is another longstanding provincial commitment, Allum said.

"That’s been good for the city, it’s been a good arrangement. And it’s unfortunate to see the government abandoning that," he said.

The municipal funding provisions were contained in the annual BITSA, introduced Thursday. Instead of being spelled out in the bill, they were simply stated as repeals to numbered provisions of the Municipal Taxation and Funding Act.

"It’s disappointing to have these things buried in a piece of legislation like this," Allum said. "It would have been better if they came clean and described these things in the budget so that the people of Manitoba would understand concretely what actions the government has taken."

Indigenous and Municipal Relations Minister Eileen Clarke said transit and infrastructure funding to municipalities would remain the same in 2017 as it was last year. However, with passage of the budget bill, there would be no funding guarantees in place for future years.

Clarke said municipalities are aware of the fiscal pressures on the provincial government.

"I think the City of Winnipeg as well as our municipalities know what deficits look like. And I think they were very aware that changes had to be made," Clarke said.

She said municipal officials were not given a heads up about the proposed changes in BITSA.

Jonathan Hildebrand, director of communications for Mayor Brian Bowman, said the city is examining the budget bill.

"We are currently reviewing it to try to determine what it means and what implications it may have for the City of Winnipeg," he said in an email. "At this point we are not in a position to comment further until we've had time to review what's been tabled."

Meanwhile, BITSA would boost the maximum penalty to 100 per cent of taxes owing from 50 per cent when a person refuses or fails because of neglect or carelessness to pay tax when it is due.

It would also allow the costs of searches conducted to secure or recover a tax debt to be collected and increase the tax evasion penalty for repeat offenders from twice the tax evaded to triple the amount.

Persons caught illegally buying, selling or possessing contraband tobacco could have their driver's licence suspended under the bill's provisions.

Political parties represented in the Manitoba legislature would see a portion of their caucus budgets eliminated for two years. The suspended funding is for "special supplies and assistance" and is paid out based on a party's seat count in the legislature. The monies are used for everything from the purchase of Canadian flags and pins to hand out to constituents to party mail-outs.

Finance Minister Cameron Friesen said the amount being held back is modest. For the Progressive Conservatives, he said, it would mean a loss of $115,000 a year, while for the NDP and Liberals, it would mean losses of about $35,000 and less than $10,000 respectively, he said.

— with files from Aldo Santin

larry.kusch@freepress.mb.ca