November 26, 2018

Manitoba Heavy Construction Association pushes for binding referendum on proposed provincial sales tax cut

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The Manitoba Heavy Construction Association is demanding Premier Brian Pallister hold a binding referendum before he makes any move to cut the provincial sales tax.

MHCA president Chris Lorenc said the provincial government has deeply cut infrastructure spending to create the fiscal resources necessary to reduce the PST by one point (to seven per cent). Those cuts are ruining the construction industry, he said, forcing many to drastically downsize and pushing some to the brink of receivership.

Even worse, Lorenc said, the funding cuts are undermining both the growth and competitiveness of the Manitoba economy.

Former NDP premier Greg Selinger decided not to hold a referendum on the government’s 2013 decision to raise the PST to eight per cent. Selinger’s unwillingness to hold a vote eroded the support from business and industry groups, who, in principle, supported a dedicated increase in PST to fund infrastructure.

Lorenc said the Pallister government can remedy that mistake, and ensure it makes the best decision for all involved, by asking Manitobans for guidance.

“Before rolling (the PST) back, a referendum would be the best way to go,” Lorenc said. “If the revenues of that one point were dedicated to core infrastructure, I think people would vote to keep the tax as it is.”

The MHCA has emerged as an unlikely foe for the Progressive Conservative government, as it heads into the last 18 months of its mandate.

Heavy construction had been an ally for most of the first two years it was in office. However, earlier this month, at the MHCA annual general meeting, Lorenc was highly critical of the government’s decisions to cut spending on roads by more than $230 million annually.

With Infrastructure Minister Ron Schuler and senior officials from his department in attendance, Lorenc accused the province of deliberately breaking a series of promises to keep total annual spending on roads at no less than $500 million. Based on those pledges, Lorenc said his organization publicly supported the government’s overall fiscal plan.

In the 2018-19 provincial budget, funding for roads was cut to $350 million.

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