Wednesday, April 07, 2004

Winnipeg's New Deal gets derailed?

A brief article in the Globe and Mail today alerted me to some new developments in Winnipeg mayor Glen Murray's quest for a New Deal for Winnipeg. Murray is another progressive urban mayor à la Miller, and lately has received a fair amount of press across the country for his efforts in changing the way Winnipeg collects revenue from its citizens.

Although I haven't studied it as closely as perhaps I might like, from what I understand it's a fairly radical (at least for Canada) redistribution that would have significantly reduced the reliance on property taxes (which would have been cut by 50%), and increased the reliance on user fees and consumption taxes (such as an increased gas tax, a new hotel tax, water and sewer surcharges, etc.). The plan was intended to increase municipal revenue and give the City more financial autonomy, while giving businesses and residents more control over how much tax they pay (you don't have much control over your property taxes, other than when you choose your home before you buy it, but you do have control over things such as how many garbage bags you put out, how much you drive and how much fuel you buy, etc.). The CBC Manitoba website has a feature section on Murray's New Deal, where you can get more details.

The plan sounded interesting to me, but it looks as though most residents of Winnipeg don't agree. Hence Murray has revised the original plan (now apparently referred to as the "Old Deal"), and replaced it with a watered-down, less ambitious, and more saleable version (the "Newer Deal"). There's fewer new fees, but there's also a much smaller reduction in property taxes (was 50%, now only 4% — though the reduction will be increased if a per-bag fee is introduced on garbage pickup). Also now off the table is a 50% cut in transit fares.

What was the downfall of the program? I've found two different answers. Articles on the CBC site and from the Winnipeg Sun seem to be emphasizing that the Newer Deal is simpler than the Old Deal, which implies that citizens felt the litany of new fees was too complicated to understand — too much change at once. But they also seem to hint at something that the Globe and Mail article states straight out:

Mayor Glen Murray, who last year said he wanted to rethink the entire structure of his government, said yesterday that residents didn't like the idea of new taxes, which would have been a cornerstone of his plan.

The Winnipeg plan primarily revolved around restructuring municpal revenue sources, not a restructuring of revenue between the three levels of government. Still, this reaction indicates to me that advocates of intergovernmental financial reform may have a bit of a struggle on their hands. The original Winnipeg plan featured some fairly significant tax cuts in some areas in addition to the new fees and taxes, and this suggests that the idea of "The Feds will give up some tax room to the provinces, who will give more taxation power to municipalities, and it'll all even out for taxpayers" may not be as easy a sell as you might think.


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