Manitoba Committee Hansard — 5 July 2013 (Social and Economic Development Committee, Sitting 5, 40th Legislature, 2nd Session)

40-2-sed5

Manitoba — Debates (Hansard)

Second Session - Fortieth Legislature of the Legislative Assembly of Manitoba Standing Committee on Social and Economic Development Chairperson Ms. Melanie Wight Constituency of Burrows Vol. LXV No. 5 - 6 p.m., Friday, July 5, 2013 ISSN 1708-6698

MANITOBA LEGISLATIVE ASSEMBLY Fortieth Legislature Member Constituency Political Affiliation ALLAN, Nancy, Hon. St. Vital NDP ALLUM, James Fort Garry-Riverview NDP ALTEMEYER, Rob Wolseley NDP ASHTON, Steve, Hon. Thompson NDP BJORNSON, Peter, Hon. Gimli NDP BLADY, Sharon Kirkfield Park NDP BRAUN, Erna Rossmere NDP BRIESE, Stuart Agassiz PC CALDWELL, Drew Brandon East NDP CHIEF, Kevin, Hon. Point Douglas NDP CHOMIAK, Dave, Hon. Kildonan NDP CROTHERS, Deanne St.

James NDP CULLEN, Cliff Spruce Woods PC DEWAR, Gregory Selkirk NDP DRIEDGER, Myrna Charleswood PC EICHLER, Ralph Lakeside PC EWASKO, Wayne Lac du Bonnet PC FRIESEN, Cameron Morden-Winkler PC GAUDREAU, Dave St. Norbert NDP GERRARD, Jon, Hon. River Heights Liberal GOERTZEN, Kelvin Steinbach PC GRAYDON, Cliff Emerson PC HELWER, Reg Brandon West PC HOWARD, Jennifer, Hon. Fort Rouge NDP IRVIN-ROSS, Kerri, Hon. Fort Richmond NDP JHA, Bidhu Radisson NDP KOSTYSHYN, Ron, Hon. Swan River NDP LEMIEUX, Ron, Hon. Dawson Trail NDP MACKINTOSH, Gord, Hon. St.

Johns NDP MAGUIRE, Larry Arthur-Virden PC MALOWAY, Jim Elmwood NDP MARCELINO, Flor, Hon. Logan NDP MARCELINO, Ted Tyndall Park NDP MELNICK, Christine, Hon. Riel NDP MITCHELSON, Bonnie River East PC NEVAKSHONOFF, Tom Interlake NDP OSWALD, Theresa, Hon. Seine River NDP PALLISTER, Brian Fort Whyte PC PEDERSEN, Blaine Midland PC PETTERSEN, Clarence Flin Flon NDP REID, Daryl, Hon. Transcona NDP ROBINSON, Eric, Hon. Kewatinook NDP RONDEAU, Jim, Hon. Assiniboia NDP ROWAT, Leanne Riding Mountain PC SARAN, Mohinder The Maples NDP SCHULER, Ron St. Paul PC SELBY, Erin, Hon. Southdale NDP SELINGER, Greg, Hon. St.

Boniface NDP SMOOK, Dennis La Verendrye PC STEFANSON, Heather Tuxedo PC STRUTHERS, Stan, Hon. Dauphin NDP SWAN, Andrew, Hon. Minto NDP WHITEHEAD, Frank The Pas NDP WIEBE, Matt Concordia NDP WIGHT, Melanie Burrows NDP WISHART, Ian Portage la Prairie PC Vacant Morris

235 LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON SOCIAL AND ECONOMIC DEVELOPMENT Friday, July 5, 2013 TIME – 6 p.m. LOCATION – Winnipeg, Manitoba CHAIRPERSON – Ms. Melanie Wight (Burrows) VICE-CHAIRPERSON – Mr. James Allum (Fort Garry-Riverview) ATTENDANCE – 11 QUORUM – 6 Members of the Committee present: Hon. Messrs. Bjornson, Struthers Mr. Allum, Ms. Crothers Mr. Dewar, Mrs. Driedger, Messrs. Eichler, Helwer, Maloway, Mrs. Rowat, Ms. Wight APPEARING: Hon. Jon Gerrard, MLA for River Heights PUBLIC PRESENTERS: Mr. Walter Hill, private citizen Mr. Fred Tait, private citizen Ms.

Michelle Gawronsky, Manitoba Government and General Employees' Union Mr. Henry Siemens, private citizen Mr. Randy Baldwin, private citizen Mr. Dave Mouland, private citizen Mr. Dennis Lewycky, Social Planning Council of Winnipeg Mr. Josh Fisher, private citizen Mr. John McDonald, private citizen Ms. Kristina Poturica, private citizen Mr. Jeremy Friesen, private citizen Mr. Roland Stankevicius, private citizen Mr. Walter Bryk, private citizen Ms. Maria Collard, private citizen Mr. Cody Dzik, private citizen Mr. Darrell Rankin, Communist Party of Canada-Manitoba Mr. Thomas Dobson, private citizen Mr.

Gary Watkins, private citizen Mr. Alex MacDonald, private citizen Mr. Clay Purvess, private citizen Mr. Brian Davis, private citizen Ms. Rosemary Hnatiuk, private citizen Mr. Jeff Koziuk, private citizen Ms. Wendy Land, private citizen WRITTEN SUBMISSIONS: Johnathan Fahr, private citizen MATTERS UNDER CONSIDERATION: Bill 20 –The Manitoba Building and Renewal Funding and Fiscal Management Act (Various Acts Amended) * * * Madam Chairperson: Good evening. Will the Standing Committee on Social and Economic Development please come to order.

I'm going to talk as loud as I can so I'm hoping that you'll be able to hear me back there, you seem like you're a long way away. Our first item of busine ss is the election of a Vice-Chairperson. Are there any nominations? Mr. Gregory Dewar (Selkirk): Thank you, Madam Chair. I nominate Mr. Allum. Madam Chairperson: Mr. Allum has been nominated. Are there any more nominations? Hearing no other nominations, Mr. Allum is elected Vice-Chairperson. Okay, this bill –this meeting has been called to consider Bill 20, The Manitoba Building and Renewal Funding and Fiscal Management Act.

As per agreement of the House dated June 20th, we have 26 people scheduled to speak on Bill 20 tonight. And you have the list of those presenters before you, which is also posted at the entrance of the room. We also have a gentleman who called but is not on the list, and I'm just going to ask the committee if he has leave to prese nt at the end of the list, so he knows ahead of time if he has that leave. So is it the will of the committee to let Mr. Koziuk to be added to the list at the end? [Agreed] Thank you so much. So you're added.

On the topic of determining the order of public presentations, I will note that we do have –I'm assuming we do have some out -of-town presenters, and they're marked with an asterisk on the list. With

236 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 this consideration in mind, then, in what order does the committee wish to hear the presentations? Mr. Ralph Eichler (Lakeside): Tradition has it that we normally hear out -of-town presenters first and ask leave of the committee for that to happening once again.

Madam Chairperson: Is there leave of the committee for the out -of-towners to go first? [Agreed] I would also like to remind members of the committee that, in accordance with the agreement mentioned before, the committee may also by leave decide to hear from presenters in addition to those scheduled for tonight's meeting. Before we proceed with presentations, we do have a number of other items and points of information to consider.

For the information of all the presenters, while written versions of presentations are not required, if you're going to accompany your presentation with written materials, we ask that you provide 20 copies. If you need help with the photocopying, please speak with our staff. They'll help you. As well, I would like to inform presenters that, in accordance with our rules, there's a time limit of 10 minutes allotted for presentations, and then an additional five minutes allowed for questions from committee members.

Also, in accordance with the rules agreed in the House for the meetings hearing from presenters on Bill 20, if a presenter is not in attendance when their name is called, they will be dropped to the bottom of the list of tonight's presenters. If the presenter is not in attendance when their name is called a second time tonight, they will be dropped to the bottom of the global list of presenters. A written s ubmission on Bill 20 from Mr. Johnathan Fahr has been received and distributed to committee members.

Does the committee agree to have this document appear in the Hansard transcript of this meeting? [Agreed] Now prior–this is about speaking in committee, so prior to proceeding with public presentations I would like to advise the members of the public regarding the process for speaking in committee. The proceedings of our meetings are recorded in order to provide a verbatim transcript. So each time someone wishes to speak, whether it's an MLA or a presenter, I first have to say the person's name so that the Hansard people, who are behind me here, will know who it is that's speaking when they do the transcribing.

Okay, so that's the signal. When I say your name, then you speak. Okay? Thank you so much for your patience and we are going to now proceed with the public presentations. So and as we mentioned I will start with all of the out-of-town presenters in order that they appear on the list and then we'll go back to the top, okay? So our first presenter will be Walter Hill. And Mr. Hill, do you have any written materials for distribution to the committee? Mr. Walter Hill (Private Citizen): No, I do not. Madam Chairperson: Okay, then, please go ahead with your presentation. Mr.

Hill: Thank you very much for this opportunity to speak to Bill 20. I'm going to speak firstly about how this bill and the other taxes that I have to pay in Manitoba and elsewhere affect me personally and then I want to talk about, hopefully, a couple of things that, after reading Hansard, haven't been introduced, because as I read the newspapers and I read Hansard, I see the same theme and the same things being talked about again and again and again. If I'm lucky, I'll have something new. * (18:10) I'm a retired senior. I have two children and four grandchildren.

My youngest daughter lives in Alberta and she's, thankfully, self -sufficient. My eldest daughter and grandson, unfortunately, struggle very hard to make ends meet. My eldest daughter shops frugally at Value Village and Salvation Army thrift shop, and so on, and she and her grandson–and my grandson look to me for any extras: shoes, sports equipment, school excursion fees , a bicycle, new clothes and so on. They live in Winnipeg. I live in the Whitesh ell Provincial Park, which is a great privilege.

I'm on an old family lot that my mother purchased–or leased –in 1953, and has been passed down in the family, and now to me. We moved to the Whiteshell in order to reduce our cost of living. You know, it was costing a lot of money to live in the city of Winnipeg. But now that I'm retired, my income is from Old Age Security and Canada Pension Plan and my savings. I don't have any defined benefit pension plan or any of that kind of stuff. Now, the tax increases over the past two years, including the expansions of the PST, the additional fees for vehicle registration, park pass went up

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 237 another $10 this month–or this year. Fuel taxes, my Hydro bills, income taxes due to bracket creep, I've–I worked out–I actually went back and calculated –I'm paying $1,100 more this year than I did two years ago. And it's not for anything. Now, Conservation Manitoba has decided that all us fat cats in the Whiteshell that live in million - dollar mansions have been paying too little for our service fees, and they're going to raise my service fees from $1,200 a year that I pay now, they're going to raise now–them now to $4,500.

Conservation tells me they're going to phase in these increases so that I have time to adjust. Well, how'd they like me to adjust? What am I going to– am I going to cut out what little support I'm able to give to my daughter and my grandson? You know, they–they're finding–they're going to spend a hundred million dollars on Manitoba, the parks plan, which is a g randiose plan that they put together without even consulting the Whiteshell Cottagers Association. They were absolutely blindsided.

One week after their last meeting of the executive and Conservation Manitoba –a 28 -page, full -colour brochure comes out that says they're going to spend a hundred million dollars. And the reason I'm supposed to pay all this extra money is because if I lived in the RM of Lac du Bonnet, that's what I'd be paying. If I was in Lac du Bonnet, I'd have schools, I'd have the seniors club, I'd have a community club, I'd have a library, I'd have a clinic, I'd have policing. I'd even get my road plowed. I don't –I have to pay $80 every time it snows, and it's all because I live in a different place.

You know, they –the 'comparis' –I don't get any services. But they want me to pay for them anyway. Well, anyway, the bottom line is that this extra 1 per cent is going to be a tough burden. Thank you very much for putting it on. I'm not going to talk about how it was put on, because Manitobans are mad about how it was done. It's amazing, as I talk to people, how many people say, well, you know, the 1 per cent's not really the killer, but how it was done is exactly opposite. So, anyway, that's how it affects me. But I've got a new topic.

And pr evious speakers have talked about the government waste, and I'll spare any further recitation. But I want to speak on the topic of why this government is promoting the profligate spending that's going on, that's requiring this 1 per cent increase. The publ ic probably thinks that the Manitoba government is run by Premier Selinger and Cabinet. I think they're mistaken. The actual reins of power in Manitoba are held by a consortium of people you don't hear much about: Michelle Gawronsky , Mike MacKinnon, Kelly Moist, Sandi Mowat, Paul Wilson and 10 or 20 more.

I'm sure that everybody in this committee knows who those names are. Collectively, this group lobbies the government to make sure that their membership continues to expand, regardless of the damage to Manitoba's non- union citizens. With all the public sector initiatives that expand the union membership, including the f loodway, Bipole III, the northern dams, and we could all list off a hundred more. Each of these were –each of these projects requires the wo rkers to pay union dues under the guise of no labour interruptions.

I submit to you and the people of Manitoba: this government is using taxpayer funds to pay off the big unions, so that when the next election is held, there will be television, radio and newspaper ads from the unions casting all manner of fears on the electorate if they don't re-elect the NDP. The accusations will be as creative as they possibly can be, and it'll be sell Hydro, fire all the nurses, fire all the teachers and all that good stuff. Won't cost the NDP a nickel because it's the union dues that are paying for it because of all these projects that have been required.

In Québec, a 2 and a half per cent kickback to the political parties in power is going to result in people being c harged and possibly going to jail. In Manitoba, the NDP just washes the kickbacks through the big unions, and it's all perfectly legal. It was a dream of Ed Schreyer and Gary Doer was to have Manitoba's hydro be the oil of Manitoba. What a 'stad'–sad state of affairs we're now in. Hydro has to increase rates to cover the follies of the past; it'll have to do it to cover the follies of the future.

The present board of Hydro couldn't manage a lemonade stand properly without having to charge $10 a glass. The $224 million in consulting and legal costs for hydro: thinly disguised bribes using consulting companies as middlemen. If Enbridge were to funnel $224 million to the northern BC and Alberta Aboriginal bands to encourage acceptance of the northern gateway pipeline, they'd be castigated in the press for influence peddling, bribery and what else–whatever else could be dreamed up. In Manitoba, when Hydro does it without a single invoice being made public, it's business as usual.

Almost fell out of my chair when I read a quote from

238 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 minister Cherniack [phonetic] last week. Said: It's not the business of Manitoba government to interfere with the affairs of Manitoba Hydro. What planet does this man live on? As minister responsible for Manitoba Hydro, hasn't he even heard of Bipole III? This is–it's crazy. My conclusion: Manitobans can't afford another tax increase. And yet I fear in the next two years we'll see more of the same. It'll hit the poor and seniors far harder than anyone else, exacerbating the social costs to Manitoba. We need less government, not more.

We need fewer civil servants, not more. We need reasonable and rational civil service wages, not Cadillac salaries, pension plans and employee benefits. Manitoba's budget has grown at rates well past inflation and population, and it's not for teachers and 'nurches.' It's certainly not for welfare rates. It's this government lacking the courage to make the tough choices and say no to waste and mismanagement and to the bosses of the civil service sector–public sector unions. Thank you. Madam Chairperson: Thank you, Mr. Hill. Do members of the committee have questions? Hon.

Stan Struthers (Minister of Finance): Thank you, Mr. Hill, for coming in and advising us here tonight. I was interested in what you had to say about the floodway around Winnipeg and for the reasoning–your belief that that was put in place to provide jobs for union memberships. Is your advice, then, that we–because part of our doing with the PST is dedicating this to flood infrastructure and doing the same sort of thing for Lake Manitoba and Assiniboine River, as we did for the city of Winnipeg, which saved probably $35 billion in flood costs that came along.

Is your advice, then, that we don't proceed with flood infrastructure on–in other parts of Manitoba? [interjection] Madam Chairperson: Mr. Hill. Mr. Hill: My advice is not to proceed with works that are required, but my advice is also to not require that all the contractors have unionized employees. I think that there's a cost to doing that, and I think the cost of doing that would exceed labour disruptions depending on how it's handled. This is an unnecessary extra cost. Madam Chairperson: Thank you. Hon.

Jon Gerrard (River Heights): I just–you use some pretty strong language in terms of saying that Manitoba Hydro is using bribes and so on, and I just wanted to give you a little bit more of a chance to explain, you know, why you described this as bribes. [interjection] Madam Chairperson: Oh, wait. Mr. Hill. Mr. Hill: Sorry. Madam Chairperson: Mr. Hill, sorry. Go ahead. Mr. Hill: I didn't say that they were bribes. I said that they would be viewed by the –if Enbridge did it in northern BC, that's what they would be called.

Now, the way that Hydro has managed to put $224 million out there, it's not traceable back to Hydro because of the way they've done it . I mean, they can't produce an invoice, apparently, to show how it was done after repeated calls for it, and, of course, these monies are not paid by them directly as–they're being paid through consulting firms and various other mechanisms. Madam Chairperson: Thank you. Mrs. Myrna Driedger (Charleswood): Thank you, Mr. Hill, for your presentation tonight. Can you just tell us a little bit more about the $1,100 more a year in taxes.

The NDP government seems to want to downplay what their increased taxes, expansion of taxes and increased fees have done to Manitobans in the last two years, and you are actually, you know, telling them that for you, personally, you're being charged $1,100 more a year in taxes. Can you just explain a little bit more about that? [interjection] Madam Chairperson: Mr. Hill. * (18:20) Mr. Hill: Sorry –I didn't bother reading you the list, because I didn't know if anybody'd be interested.

PST on my house insurance, $120; vehicle registration, another $30; park pass, $10; fuel tax, $70; Manitoba Hydro, $144; $150 for bracket creep. None of this, by the way, is the extra 1 per cent. Four hundred dollars on the 1 per cent that I have to pay on everything else; 3.5 per cent on hydro, that's another $84.

That –these are coming up: Provincial park land rental, additional $55; park service fees, $200 more per year, every year for the next 10 years, as they ramp up so that I can–so that I’m paying $4,500 instead of $1,200 and I'm not getting any additional–oh, sorry, I'm paying my share of the hundred-million dollar park land.

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 239 Now the problem with that, by the way, is that since 2005 the Whiteshell Cottagers Association has asked the Manitoba government to provide information on how much it cost to run the north and south Whiteshell park districts. They can't do it. We took them to court in 2005. They said, our computer system won't tell us. Eight years later, we've asked them again and they've said –and this time they refused to provide the information and now we're taking them back to court again.

And, in the legislation, the governing Conservation Manitoba, it says that the minister is required to provide that information. Now the argument for raising the $4,500–for raising people up to $4,500 is because we're supposed to pay our share, and yet they can't tell us what it costs so. Madam Chairperson: Thank you. We have about eight seconds left. Mr. Reg Helwer (Brandon West): Thank you for your presentation, Mr. Hill. I'm just wondering, the numbers that you spoke of there, is that including the PST increase or prior to? Mr. Hill: Prior to. It is including PST– Madam Chairperson: Sorry. Mr.

Hill, just briefly. We're out of time, so just briefly answer. Mr. Hill: Yes, sorry. It wasn't including PST, but, when I'm looking at July 1 on, as we tick over three quarters of a million dollars a day in new taxes that’s coming at me. Madam Chairperson: Thank you. Thank you very much for coming out tonight. Our next presenter, also from out of town, is –oh, sorry. Before I do that, we did have one other presenter come in who also wanted to know if they could have the leave of the committee to present at the end, and so that is Ms. Wendy Land.

Do we have the consent of the committee to do that? [Agreed] Thank you so much. So ordered. We will add her to our list. I also forgot to tell the presenters that at nine minutes, I w ill give you just a little signal that you have one minute left so you kind of have an idea to wrap up. All right? Thank you. So our next presenter, then, is Mr. Fred Tait. Do you have any written materials, Mr. Tait? Mr. Fred Tait (Private Citizen): No, I don't. Madam Chairperson: Okay. Thank you. Please proceed. Mr.

Tait: When one were to, as a citizen out seeking accommodation in this city this evening–one would expect there's a relationship between the price of that accommodation and the quality of that accommodation. And the same rule applies when one is seeking what I call the public accommodation in services we provide to one another through different levels of government. And, in my long lifetime, I've had some very vivid experiences with accommo dation–public accommodation. In 1958, at about exactly this time in July, my father took suddenly and critically ill, was hospitalized for three months afterwards.

Didn't live–never worked again. Lived another six years before he died, but at 16, the oldes t in the family, I was left to run a farm. The labour on a farm, at that time, was unbelievable because it was a lot of manual labour, but it was also the decision- making process that thrust upon you at 16. I was successful. I kept the family on the farm, kept the farm operating, but there's one thing I couldn't have done. I couldn't have paid the medical bills. It was hospitalization that saved my farm and saved my family. I never forgot that. Later on, when I had a family of my own–two small sons–work was scarce.

It's expensive starting a family. Every visit to the doctor, which was regular with vaccinations and doctors checking on the progress of young children– at the end of every visit, I walked and paid $10 to cover the visit. One day, I walked up to pay at the end of the visit , and the lady said, oh, but Mr. Tait, we have Medicare now. You don't have to pay any more. Years later, as I became quite accomplished in pipeline construction and heavy -equipment operator, my income tax level reached five ti mes what my gross income had been years before, and I never regretted one penny of that taxation.

My peers complain bitterly. I said, no, I'm paying for that accommodation that other people in this province provided me to help me raise my family and save my farm. And I'm also making payments for the services I'm receiving today, and I'm making some payments for services I may need when I retire and become a frail senior. And I compare my generation today, and the services that are available to me as a sen ior, to the life of my grandparents in the 1950s, in absolute

240 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 poverty and despair with little hope. I see things like seniors housing assistance. I see my neighbour with both knees replaced, hip replacements, home care, and taxation adjustments to accommodation by age. And what a wonderful thing I've come to see. But these things don't come for free. They come because it's a civilized place that is supported by taxation. In 1963, I bought the place where I live yet today with my wife. The road in front was largely often impassable –made almost a career of towing people out with my tractor.

My farm was subject to localized flooding with thunderstorms and spring runoff. Today, that road in front of my farm is a paved highway. The drainage beside it has been refurbished five years ago by the Province with an investment of $900,000, and I tell you, I never thought I would see this in my lifetime, but taxation made all these things possible. And I have to compliment the people from the McGregor Transportation dist rict office that maintain the highway, wonderfully done, great people doing a great job. Makes my life so much better.

But for the issue at hand, is that I've been asked as a citizen to contribute a hundred dollars contribution towards accommodation for e very $10,000 of purchases of taxable items that I purchase. My answer to that is yes, because I live in a good place. And it's a good place because of what people have contributed to make it that good place. And I listen to the medium and I see that the AMM–they take the position that they don't oppose the tax; they just want the Province to collect the tax and give it them. They'll do the spending. You tax; we'll spend. That's a great formula.

If you're a rural government or a city government official, I can see the logic to their thinking, but I can't see why a government would do that, frankly. And I also would point out to them that the Province has, through its education levy transfer off of local levy, has left a great gap. If local government was thinking about it needed money for infrastructure, there's a great gap there. They could utilize part of that. I also see the Manitoba Chamber of Commerce taking a similar view, saying, well, you know, we're not opposed to the tax, but we think we have a v ote.

And I would hope that in their consideration of a vote, they would make a side trip to California and see how votes on taxation affect a state. And on the way back, stop in Arizona and have them explain how tax cuts led to a situation where the state legislature sold the l egislative building to private enterprise and are leasing it back to accommodate the tax cuts. That would be an interesting experiment for them.

And I also couldn't help but notice a few days ago the mayor of Winnipeg was here at this podium and he lamented about the state of city infrastructure and forgot to mention that a property tax freeze in the city of Winnipeg that lasted several years led t o the depreciation of the infrastructure to a state it's in today. That was not the Province's doing. That was local government's responsibility for doing that, and now it's the Province's fault because it happened. They took the credit for the tax cuts and the Province is to assume the responsibility for the resulting chaos–totally unacceptable.

And then he went on to say that he wanted accountability; he wanted every penny accounted for. And I thought, from you, that doesn't sound so good, because there's some issues about fire halls, property swaps, investments in real estate, and so on, that I think perhaps he should've thought more before he spoke about these things. * (18:30) But then I look at some options and the opposition wants a vote. And if we're going to have a vote, let's have a vote on options.

And I would suggest that if we need a vote, we would have an option of the 1 per cent PST or the other option would be to put a levy on higher income brackets that would raise the same amount of mone y and let the public vote on those two options. Now, in that process, perhaps we could have an intelligent discussion about the merit of consumption taxes as opposed to taxes on income and the effects of both of those options on economy. And perhaps they, based on my experience over decades, I suspect in such a situation the opposition party would favour a sales tax.

I suspect the other side of the equation, like the Canadian Centre of Policy Alternatives, a trade union movement, and socialist activists groups would argue in favour of increasing the tax on higher income Manitobans. And that would be a fair debate. The government would facilitate the process; that would be the government's role in that. So I have to conclude my remarks by saying that this is a great place that I live in. In fact, it's a wonderful place compared to where I started out. And I want it to stay that way. Wherever I'm going I

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 241 know I'm more than halfway there. And I don't want to see left behind the possibility we're going to go back in another time where I started from. I've been there, I've seen that, I've done that, and the deal that I have made as my role as a citizen in society to fund where we are today was worth every nickel and every hour of labour I put in to supporting where it is today. And thank you. Madam Chairperson: Thank you, Mr. Tait, for your presentation. Do members of the committee have questions? Mr. Struthers: Yes, thank you, Mr. Tait, for coming in.

I appreciate the advice that you've brought to this committee. I was especially struck by your story of how Medicare saved not only your farm but your family back in the '50s. I would like your impression of what that –of what would happen to a young family in Manitoba should Brian Pallister get his way in which he said that he would invoke a two- tier, private, for -profit system to health care. That's his preference; that's what he would do if he had the chance. Where would that leave Manitoba farm families? [interjection] Madam Chairperson: Oh, sorry, sorry – [interjection] Wait. Mr. Tait. Mr.

Tait: Okay –not only from Brian Pallister but I've heard it from other sources. Without it, we're providing an example where it is in the world that private health care, or a combination of private and public has created a better system at a lower cost. Because I often think, Minister, that it's not the taxation they're opposed to, it's the social programs that that taxation makes available. I think that's the really–at the heart of it. Madam Chairperson: Thank you. Mrs. Driedger: Thank you for presentation, Mr. Tait. And just to correct the record, that the minister just put misinformation on the record.

There has never been any comment by our leader in regards to promoting two-tier health care. And I would indicate that this government has already gotten multi-million dollar contracts with two private clinics that is servicing Manitoba well and the Minister of Health (Ms. Oswald) is totally okay with that and is on record saying that that's acceptable. So the minister was trying to go down a slippery slope right now, and I just want to straighten that out. But thank you very much for your presentation tonight. Mr.

Tait: Yes, if I might add to your comment, quite often the privatization of a former government service, this so -called efficiency comes at the expense of a lower wage scale and lower benefit scale to the people that are empl oyed. A family member of mine w ent through that deficiency at a significant decline in income and benefits. Madam Chairperson: Thank you. Mr. Gerrard: Thank you, Fred. And as one who has been down the road and been to your home, I can appreciate the improvements that have come over the years and, certainly, that's been a valuable contribution. I just want to clarify one thing.

It seems that you're not entirely opposed to a referendum if it was done right. And I would also ask you to comment about, you know, there's a referendum on a PST, there's a referendum on Manitoba Hydro–is the referendum on Manitoba Hydro privatization, is that a good idea? Mr. Tait: It's not a good idea, because what will happen in a referendum to privatize Manitoba Hydro is that if it's privatized, if it's a yes vote, then all citizens of Manitoba will likely get a $5,000 share offering. It will be a purchased vote. That's exactly what will happen there. Madam Chairperson: Thank you. Mrs.

Leanne Rowat (Riding Mountain): Two points–one point: You had mentioned that it was the opposition's desire to have a vote. Actually, my understanding is it's Manitobans' right to have a vote because that is presently how the law speaks. So–and that's just a point. And then with regard to your indication that freezing tax dollars in the city of Winnipeg, this government has actually frozen taxes on universities–or in tuition freezes on universities. I'd like to know what your opinion is of how that has actually helped or hurt universities in Manito ba by having a tuition freeze. Mr.

Tait: I have some quite concern about that because it's not only a trend in Manitoba, but what it

242 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 has done is required university to seek private-source funding, and the private corporations then control the work that's done at universities. And that is not healthy for a society. And so from that ground I would rather see public funding of universities. In fact, I favour a proposal as put together by Tom Kent, probably 30 years ago, which I thought was quite practical. Madam Chairperson: Thank you. We have just a few seconds, if anyone has another question. Mr. Struthers : Well, Mr.

Tait, the Conservatives can run, but they can't hide on what their leader has said. Not only did Brian Pallister talk about a two-tiered for private profit system on CJOB for everybody to hear, but he also talked about a $550 million across-the-board cut. Madam Chairperson: I'm sorry; time has expired. I am going to just do this, please, because it's my fault; I didn't tell all of you, all my MLAs, just to – [interjection] Oh, sorry; thank you so much, Mr. Tait. I apologize; I'm new at this, so I apologize to everyone. I didn't read this at the beginning, and I should have. Please sit down.

Oh, did you have –was there a question? Okay, guys. This is all my fault, so we're going to just start again, and I apologize to everyone, okay. So, what we're going to do–I should have said this at the beginning, is, first of all, when it comes to the questions, committee members need to address the presenters simply on questions connected to their presentation, if folks could. If everyone could do that in the room, we would do well, and then when I get – if there's been a question asked by the five minutes, then the person will certainly be given the time t o answer.

But, if there has not been a question asked and we hit the five minutes, then we're going to stop. So, if maybe we could just be very quick, sort of, with our questions and get them out. So I do apologize for that, but it is only five minutes. So, if that's okay. I mean, I can put that to the committee as a–if that seems fair –[interjection]–no, that's okay? All right. All right. Just so everyone knows, so that is my fault. I apologize to the room. And we will move on to our next out-of-town presenter, Michelle Gawronsky. And, Michelle, do you have –thank you; yes, we'll get our staff to help you. I'm sorry.

Would Mr. Siemens be willing to wait until just following this lady? [interjection] Is that okay? Thank you so much. It's my fault. I think I might be saying that a lot tonight. It's my fault. We'll just get it out of the way right now, okay. Whenever there's a problem, it's my fault. So, if you would like to go ahead with your presentation. Thank you so much. Ms. Michelle Gawronsky (Manitoba Government and General Employees' Union): Thank you very, very much, and thank you, committee, for allowing me to speak tonight.

Yes, my name is Michelle Gawronsky, and I am the very proud president of the Manitoba Government and General Employees' Union. I wish my colleague was here right now, so I could introduce myself to him. * (18:40) The MGEU represents approximately 40,000 workers from across this province, and the MGEU members work in various sectors, including the civil service, special operating agencies, Crown corporation, regional health authorities, community agencies, and the private sector itself.

I'm not an economist nor an expert in any government finances, but I have over 30 years of experience working as a paramedic and in health care in Manitoba. And I speak to public employees and I speak to the public, I speak to family members and friends daily, so I know exactly what's going on in and around me. MGEU members are on the front lines delivering services and they have great insig ht into their workplaces. Bill 20 is, of course, particular interest to MGEU members. Not only are they taxpayers, they are also employees that carry out the agenda of the government of the day.

The Manitoba government has a revenue problem in general, not a spending problem. This government has cut $1.2 billion from revenues through tax cuts since it took office. The federal government is squeezing the Province by limiting transfer payments, which makes up just under one third of the government's revenue. Federal transfers have levied off in the past years, yet the population and the needs of Manitobans continue to grow. The Canadian health transfer is scheduled to decrease, once again, in 2017 to 2018, putting a huge

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 243 strain on our health- care system. On top of that, the Province is stepping in to rescue program areas that the federal government is offloading. This is a dangerous combination that threatens public services in the future. Meanwhile, the needs of the boomer cohort continue to grow. Manitobans over the age of 65 will increase nearly 20 per cent of the province by 2026. Home-care attendants cared for 14,217 clients in 2011 and 2012, a 4 per cent increase from four years earlier, and none of us are getting younger.

The need for a strong combination of home care, personal care homes and hospital services are essential. There's been an investment in our justice system, but a brief look at the numbers indicates that these increases are necessary and more still needs to be done to address the bal looning inmate population. The number of inmates has skyrocketed a hundred per cent in eight years, impacting rehabilitation and the safety of everyone in our institutions. Since 2006, the number of children in care has increased from 6,629 to 9,730 in 1 912–or 2012.

Keeping our children safe and preventing future – further future tragedy is invaluable to us. Our province has an infrastructure deficit which receives much attention but very little action over the years. Manitobans value safe highways, passa ble bridges, well maintained city streets and roads to get us to work. Manitobans need better flood protection to ensure the communities and homes we are in are kept safe. And congratulations to Manitoba. I understand the city of Winnipeg has actually done well under – with Globe and Mail.

We are one of the three cities cited in the world with our flood protection, so congratulations for that. Ten departments had their budgets decreased this–in this year's budget. The Department of Conservation and Water Stewardship, for instance, saw its budget slashed by 6.2 per cent, leaving fewer people to keep our campgrounds clean and safe, and to manage our waterways and our natural legacy. Aboriginal and Northern Affairs, Healthy Living, Seniors and Consumer Aff airs, children opportunities and youth, and Finance, and along with other departments, will also see budget cuts this year.

Grants to universities and colleges were reduced by half of the promised increase. Offices were closed which impact services to rural Manitoba. Those providing the services are feeling the strain. The civil service will be reduced by 600 jobs in the next three years –600 people out of work. Working people are spending people. That's going to hurt not help. The number of casual emp loyees is rising steadily. Seasonal employees are either not being recalled or are being –are delayed in getting back to work. Services will not be sustained with this gap in the public workforce.

I've spoken to members who describe the growing stress and burnout rates in some of their areas. Their co -workers retire and move on, but their position is never filled, yet Manitobans are relying on these services. Manitoba has a revenue problem, not a spending problem. The PST is not the fairest revenue option, but it does provide the government with much-needed funds. This government also chose to provide some relief to low -income earners through the shelter supplement and the investing in a social housing.

We applaud the move for –towards closing the gap between the high- and low-income earners, but feel there is still much that needs to be done. During the prebudget consultation period, we stated that very –every revenue option should be on the table for discussion. We refer to a system that asks proper –profitable corporations and those individuals who have done well in our economy to contribute a bit more. Over 80 per cent of Manitobans agreed with this public poll last January. We also questioned the use of a referendum as a responsible step forward in determining fiscal issues.

Referenda are highly contentious and are often very divisive process, not to mention the high cost outside of an election period. The question of fiscal issues, revenue and spending are best left in the hands of the Legislature and the ultimate referendum will be on election day when Manitobans can judge the government for themselves. The MGEU supports the spirit of Bill 20 like other organizations including the Business Council of Manitoba and the Manitoba Heavy Construction Association. We may not agree with every aspect, but there is a broad consensus among several groups that Manitoba has a revenue problem.

Manitobans count on public services every day. We believe that we all contribute to the society we live in and the

244 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 society we want to see. Because we know Manitobans greatly value their public services, in January 2013 poll most said maintaining or improving public services was their top priority ahead of reducing taxes and balancing the budget. Contributing a little more to care f or the most vulnerable, protect our environment and build infrastructure is well worth this investment. Thank you. Madam Chairperson: Thank you, Ms. Gawronsky. Do members of the committee have questions? Mr. Struthers : Thank you very much, Ms. Gawronsky, for your advice tonight.

You had talked about public services and you talked about the importance of public services and the importance of infrastructure. Bill 20, which is the bill we're here talking about tonight, puts in place the ability to raise revenue and then direct that revenue into infrastructure. Our government made a decision to do that on the revenue side rather than cutting services. Now, as I said in a previous question, Mr. Pallister has said very clearly that his view is that they–we should cut across the board, indiscriminately every department by 1 per cent, which totals $550 million worth of cuts.

What would that do to the services that you talked about in your presentation tonight? Ms. Gawronsky: The services Manitobans enjoy would not be there, and I don't know if Mr. Pallister or anyone else would then like to learn how to run it greater because I don't know who would be there to keep the roads open for our ambulances to get out there to provide the services that our hospitals provide. So to be able to cut that would definitely hurt badly. Madam Chairperson: Thank you. Mrs. Rowat: Thank you for your presentation.

I noticed there was only one sentence in your presentation with regard to the impacts of services to rural Manitoba. That–it is a serious issue in a lot of the communities and you're talking about if –in response to the Finance Minister –if services will not be available as they expect in communities. I found it odd that there's only one sentence on rural Manitoba and the services that are being cut are in that area, because that –it's significant. So I'm just wanting to know if you can expand on that a little bit for the people that are looking for representation from MGEU in rural Manitoba. Ms.

Gawronsky: Actually, there 's one sentence in there because the rural Manitoba is where these 600 cuts are going to be. It basically seems to be within rural Manitoba, but we don't distinguish between rural or urban. We are all Manitobans, all of our members and so we all want the s ame recognition and what is needed to be able to carry out the services to Manitobans. Mrs. Driedger: Thanks a lot, Michelle, for your presentation. Just a couple of questions. First, a statement. Please do not believe what the Minister of Finance (Mr. Struthers) just said.

He’s now down a path of trying to put misinformation on the record. There will not be cuts across the board. That was never, ever said, and so that is not going to happen. But I do want to ask you, in terms of the impending retirements in the civil service, and those numbers are huge and very significant in terms of what it could do, can you just tell us a little bit that– like, the government has indicated they’re going to reduce the civil service by 600 jobs in three years.

In fact, in Estimates on the civil service , the minister said and it could be even more. * (18:50) Are the front lines involved in the decision making if jobs or positions are going to be changed or eliminated? Is there input being sought from the front lines in terms of what would be the better way to work? Or how could it be accommodated with input from those that are on the front lines that know best about the work? Ms. Gawronsky: In–I'm not so sure if the –it's the advice has been sought out.

We did provide a budget consult that, you know, we –the paper that we presented to the minister and that is from our members and where it's from. And as for the 600 eliminations, at this point right as far as I know right now, everything is under– with those that are retiring; they're not fulfilling the positions. And that's why I made a point in here that filling vacancies, the retirees, they need to be filled. We need to have the people there. Mr. Helwer: Thank you, Madam Chair, through you to Ms. Gawronsky, thank you for your presentation.

The Canadian health transfers, you say it here, it's scheduled to decrease when in fact we had the Deputy Minister of Finance on record in Hansard in

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 245 Public Accounts telling us that they have stable consistent funding agreed to from t he federal government until 2022- 2023, and will be increasing at that–until that point, that is where the agreement runs out. So I'm curious as to where you see it decreasing. Ms. Gawronsky: In 2026, my understanding from what I've read through the year s. If –heard through the last few months is that there will be a definite decrease, a minimum of a 6 per cent decrease coming to the province of Manitoba. Madam Chairperson: Thank you. We have only a brief time.

Is there any further questions? If not, thank you so much for coming. And I will call on our next presenter, Mr. Siemens. And thank you for your graciousness in waiting for my mistake. Do you have any materials to present? Mr. Henry Siemens (Private Citizen): No, I do not. Madam Chairperson: Okay. Please proceed. Mr. Siemens: Thank you. Firstly, thank you very much for the opportunity to present here today, it's much appreciated.

When the balanced budget, debt repayment and tax protection act was implemented in Manitoba in the mid-1990s, it was viewed as an important measure to ensure the provincial government of the day had a duty and an obligation to spend taxpayer money wisely. Provisions in the act provided Manitoba taxpayers with the confidence that governments would not return to running annual deficits without consequences. A key element to the balanced budget legislation was that governments could not raise taxes without first going to the public through a referendum.

Unfortunately, what's been happening over the past number of year s is that the provincial government has been continuing amending balanced budget legislation to the point where it barely resembles the act that was established in the mid-'90s. The most recent changes is outlined in Bill 20 to Manitoba's balanced budget l egislation are of major concern to all Manitobans. Bill 20 has increased the provincial sales tax in the province from 7 to 8 per cent, resulting in a revenue increase to the provincial government of $277 million annually.

The most troubling part of the government's decision to increase the PST is the fact that they're also changing the current balanced budget legislation, which had stipulated that a referendum of Manitobans be held before increasing the PST. Firstly, I'm deeply troubled about this incr ease because it will make our already uncompetitive tax framework even more unattractive. Manitoba businesses have raised concerns about how increasing the PST to 8 per cent will make us less competitive with Saskatchewan, which has recently lowered their PST to 5 per cent.

When you add the increased PST along with our higher personal income tax rates, higher corporate income tax rates and the fact that we remain one of only–one of the few provinces in Canada that continues to have a payroll tax it clearl y shows we're establishing an uncompetitive tax framework with other problems–with other provinces, sorry. The PST hike that the provincial government is implementing will also result in a reduction of jobs and income growth. And here's why; the provinci al sales tax as we know applies not only to the items bought at the register but also to the cost of doing business.

That includes capital goods; things like machinery, equipment and new technologies, materials, energy and other goods or services that entrepreneurs purchase and use to produce what they sell to their customers. The higher cost of these capital goods is by far the most detrimental feature of the PST since investments in machinery, equipment and technology are the foundation of a stronger and more productive economy. A higher PST rate will further increase the cost of doing business, leaving entrepreneurs with less money to operate, expand, innovate, hire people and pay higher wages.

Partly due to the PST, Manitoba had Canada's second-highest overall tax rate on new investments in 2012 at 26.3 per cent. For perspective, the comparable rate was 16.2 per cent in Alberta and only 17.9 per cent in Ontario. In our global world where provinces compete for mobile investment dollars, increasing the PST makes it even more expensive to invest in and do business in Manitoba. By deterring investment, Manitoba families ultimately lose because less investment means reduced job creation and income growth.

246 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 The government's decision to increase the PST raises a number of questions. How will the $277 million received as a result of the increase be invested? Secondly, what plan is there to provide a solution for the significant municipal infrastructure deficit? How will challenges to the business community surrounding an already uncompetitive tax framework–again Saskatchewan at only 5 per cent –be addressed? And what is the impact and the potential impact this increase will have on consumers and businesses?

The reality is that this government has yet to articulate an answer to any of these questions. In fact, these answers should've been provided to Manitobans before the –this legislation was ever introduced. As a small -business owner, I stand firm in my opposition to the provincial decision to increase the PST in the way that it was done. The blatant disregard for proper process around changing the legislation to avoid consulting with Manitobans, I believe, is unacceptable.

We should be holding a broad discussion around the issue of tax increase, and I call on the government to abide by the law and take it to a referendum. The Province must not only let its citizens have their say, but also take a step back to provide some answers. I believe that a referendum provides many benefits, as it provides clarity of purpose, transparency of investment, greater accountability in the reporting of results, and shows respect for the hard- working taxpayers of Manitoba–taxpayers who, I might add, are required to follow the rules. I simply ask our government to do the same. Follow the rules.

If this government truly believes that increasing the PST is in the best interests of Manitoba and will create a strong, competitive economy, then you should be prepared, willing a nd enthusiastic to engage Manitobans and take this proposal to the people. In closing, I implore the Premier (Mr.

Selinger) of Manitoba to respect the Province's current balanced budget legislation and the right for the people of Manitoba to have a voice in the decision on whether or not to increase the provincial sales tax by 1 per cent by holding a public and binding referendum in which all citizens can either approve or disapprove of this increased tax. Thank you. Madam Chairperson: Thank you, Mr. Siemens, for your presentation. Do members of the committee have questions? Mr. Struthers : Yes, thank you, Mr. Siemens, for coming in and speaking with us this evening.

I was especially interested in some of your comments in terms of taxation and comparisons to other provinces, notably Saskatchewan. And I'm going to–I don't know if I have ever quoted the Fraser Institute ever in my political career, but it was interesting. I don't know if you're aware of this. The Fraser Institute, a couple of weeks ago, cam e out and declared Tax Freedom Day in Saskatchewan, which is July 11th. I know credit where credit is due; they accomplished that. Did you know that Manitoba hit our Tax Freedom Day five days earlier on July 6th?

Here's the rub of government: We've had several presentations tonight and yesterday saying that we're–we contributed to the problem by already doing tax credits to the tune of $1.2 billion, including corporate income tax decreases, and taking the small business tax from 8 per cent down to zero. Gi ven that, are you advising us that we need to look for further tax credits in–for business in Manitoba? Mr. Siemens: I'm advising that it's most important to follow the rules.

The comments specifically talking about the anticompetitive regime that we seem to be in, these are our comments that we specifically again hear from the Fraser Institute as well. And I apologize. I'm not familiar with the data surrounding the Tax Freedom Day with Saskatchewan and Manitoba. * (19:00) And as I mentioned, as well, my single biggest concern about this is how the tax was brought forward.

I don't doubt for even a second that there are significant concerns, significant issues, very significant pressures on the government to fund the programs that need to be funded, to provide the services that need to be provided and still find ways to get all of that done. But the very fact that the respect wasn't given to the taxpayer to have an opinion, that there was no comment of this during the last provincial election, that, in fact, there was a consideration for an increase in the PST, the taxpayers in Manitoba at that point in time could have had a say.

There's current law on the books that says we're supposed to have a say. You're suggesting now to us that we can't have a say, and that's truly disappointing.

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 247 Mrs. Driedger: Thank you very much, Mr. Siemens, for your comments tonight. You've pretty much expressed what about 75 to 80 per cent of presenters coming to this committee are saying. The questions you posed are also the ones that we have been trying to get answers from the government to, and we're not getting any answers either. So I do appreciate you taking the time on a Friday evening to be here. Thank you. Mr. Gerrard: You mentioned the fact that for new investment there is a tax of 26.3 per cent.

That seems pretty high to me, and I would ask you to give us a little bit more breakdown on exactly what that adds up to and, you know, maybe you could even give us an illustration from your own business experience. Mr. Siemens: Thank you for the question, Dr. Gerrard. Specifically I wouldn't be able to go into a lot of detail. I brought my speaking notes after having done some of these researches and looking at the comparisons. I'd be happy to provide the background information. And I apologize, I should have brought that with me.

I compiled my notes and brought my notes, but I'd be pleased to provide that to you, absolutely. Thank you. Madam Chairperson: Mr. Helwer, you have–yes, a little bit of time. Mr. Helwer: Okay, thank you, Madam Chair. Recently, we've seen wheat breeding leave Manitoba for Saskatchewan. Hundreds of millions dollars have been invested in Saskatchewan for that purpose, partly because of the more hospitable climate there, partly because we have a gov ernment here talking about a pesticide ban. I take it that's the type of industry that you're saying we're having leaving the province. Mr.

Siemens : Absolutely, and when we hear the very atmosphere of increased taxes, again, increased taxes without following due process, and you hear other jurisdictions talking about decreased taxes – everything is about perception, ultimately. When we have to make deci sions on where we're going to grow our business, we feel we want to be where there's an opportunity at success. And when we hear businesses talking about there's going to be increased rules, there's going to be a disregard for due process in terms of how things are going to go, we hear that there's going to be increased spending, there's a concern.

There's always a concern on the business's part when you start to look at those kinds of things. And, when we hear people making the decision to buy a house, it's because they have confidence that their job is going to be there tomorrow. That allows them to take the leap of faith to buy a house, and that's what keeps the economy going. When we start becoming concerned that that leap of faith may not be a good decision, then we start becoming hurt, then our businesses decide not to expand because it may not be the right decision to expand. It may not be comfortable to expand.

More of –the more of those tiny decisions that come together ultimately leads to not bei ng able to continue to have that growth and being concerned, and being–maybe it's smarter to invest somewhere else. Madam Chairperson: Thank you very much, Mr. Siemens. Our time has expired and, again, thank you for waiting for me. Our last out -of-town presenter is Mr. Randy Baldwin. Is Mr. Baldwin in the room? Yes. Great. And do you have any written materials for distribution to the committee? Mr. Randy Baldwin (Private Citizen): Yes. Madam Chairperson: Our staff will help you. And please proceed, Mr. Baldwin. Mr.

Baldwin: Thank you. My presentation is brief, so I'll give people a chance to pass them around. Thank you, Madam Chair. Madam Chairperson: Thank you. Mr. Baldwin: My presentation will have th ree key points: that the balanced budget law assured Manitoba citizens that they would not be subjected to large provincial government deficits nor large surprise tax increases. Bill 20 removes this assurance. Point No. 2, Bill 20 creates a breach of trust, a breach of public trust, and thirdly, the information to the public around Bill 20 has been misleading.

On the first point, removal of the balanced budget's assurance: The balanced budget, debt repayment and tax protection act of the 1990s was an important measure to ensure that the provincial government of the day had a duty and obligation to spend taxpayers' money wisely. Several successive governments agreed not to increase significant taxes without holding a referendum, and a number of these were NDP governments. Unfortunately, over recent years, the Selinger government has been periodically amending balanced budget legislation to the point where it

248 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 barely resembles the original act. The passage of Bill 20 will ultimately remove any assurance that Manitobans can plan their lives without being surprised by significant tax increases that they do not support. Both individuals and businesses have been attracted to come to Manitoba or to stay here because they could plan for the future knowing that they would have an opportunity to voice their opinion in a referendum regarding any significant tax increase.

This government's action to destroy the balanced budget advantage will hurt Manitobans' growth and economic prosperity for years into the future. The second point, breach of trust: Not only does Bill 20 remove the advantage that I've referred to earlier, but if the government proceeds as planned, the citizens of Manitoba will lose faith in the government's ability to manage the Manitoba economy.

If you had announced during the last election that you intended to remove the balanced budget law, which would have had significant implications for taxation, Manitobans would have had the opportunity to decide whether to vote for that or not. Instead, Premier Selinger indicated during the last election campaign that there would be no increase in PST and as late as a year ago was still saying his government had no plans to raise the PST or to do away with the requirement for a referendum if tax increases were proposed.

Now Manitobans have been surprised, not just with a significant tax increase but also with the proposed removal of the balanced budget law. Your government action to impose the PST increase prior to passing Bill 20, i.e., while the balanced budget law is still in effect, will be challenged in court. Even if the court case is unsuccessful, this complication could have easily been avoided by just delaying the implementation of the tax increase. The courts have already told the Minister of Finance (Mr.

S truthers) that he was in breach of the law in his dealing with the Manitoba Jockey Club regarding VLT revenues at Assiniboia Downs. I believe this Bill 20 court case has a good chance of being successful, thus creating further problems for the government . Other governments have implemented tax increases prior to passing of enabling legislation so increasing taxes without the appropriate legislation being in place is not unprecedented. However, the situation in Manitoba at this time is very different.

Manitoba has a law in place that says certain taxes, including the retail sales tax, cannot be increased without a referendum. That law is still in effect today. But four days ago, you forced Manitoba consumers to start paying a 1 per cent point increase in pr ovincial sales tax, which incidentally represents a 14.3 per cent increase in that particular tax, very much contrary to the provincial law. I expect there will be lots of legal arguments on both sides of this issue, but for me and for most Manitobans, it's simple. The law says you can't do it. You did it.

Regardless of any court case and the resulting legal decision, this has created a breach of trust. To add further insult, rather than wait until after the public hearings were completed on Bill 20, you went ahead and imposed the tax increase, quite an assault on the democratic process. * (19:10) Regarding misleading information, recently the government's media messages have tried to put a positive spin on the infrastructure expenditures, for example, in creased money for Winnipeg street renewal.

The title of Bill 20, The Manitoba Building and Renewal Fund and Fiscal Management Act, implies that the additional revenue would be used to increase funding for infrastructure. Statements by the Premier (Mr. Selinger) and Finance Minister at the time when the bill was introduced, attempted to confirm this message. Infrastructure to the person on the street means roads, bridges, possibly flood protection, and some municipal facilities that no other sources of funding are going to pay for. Recently, we've been starting to hear references to e ducation and h ealth in the same breath as basic infrastructure.

Both health and education have always been part of the government's core funding. Any seepage of funding to health and education from a pot of money that is supposed to be dedicated to infrastructure makes one wonder what else the PST increase will be–will end up funding. The government also claims that business organizations and municipalities support the increase in the PST to improve infrastructure. In reality, these groups did support additional funding if it was specifically designated for infrastructure, and primarily municipal infrastructure.

They also requested it be tracked separately from other government revenue, and this is fundamentally different from what the government is proposing. If the government is serious about funding our infrastructure deficit, I suggest two things: Firstly, delay the collection of the higher PST until either

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 249 after a referen dum is held or until the passage of Bill 20. A short delay in addressing the long- term infrastructure deficit will not make a big difference in the long run. Secondly, agree to the conditions that business organizations and municipalities have called for. Spend the extra PST revenue only on planned strategic infrastructure projects and track all revenue from the new tax and regularly account for its spending.

A refusal by the government to follow these recommendations would lead one to the conclusion that the government intentionally wishes to bury the new revenue in general revenues so that it can be used to pay the government's general operating costs. I'd like to thank you, legislators, for your dedication and attention. Your dedication is commendable and is often underappreciated. Thank you very much. Madam Chairperson: Thank you, Mr. Baldwin, for your presentation. Questions from the committee? Mr. Struthers : Yes, thank you, Mr. Baldwin, for your advice tonight.

The only question I have, has to do with infrastructure, and what your view of infrastructure would be. I'll give you an example. We have demands across the province to build schools. Not school programming–there's those demands too, believe me, but for school capital. A community like Winkler, where there's a lot of growth and have put up with huts for quite a while. We've talked to them about a new school. We've talked to different communities about renovations. In your definition of infrastructure, does a new school at Winkler account as critical infrastructure or does it not? Mr.

Baldwin: I think in my definition of infrastructure, the new school should come out of the Education budget and should not be considered to be addressing the infrastructure deficit that this bill is designed, or is put forward as being designed, to deal with. Mrs. Driedger: Thank you, Mr. Baldwin, for your presentation here tonight. We have been trying to find out where specifically the government intends to spend that extra $277 million. They have refused to provide us upfront with where that spending will go. The money is going into general revenue.

And then at the end of the year, they have indicated that they will then give a list to the public of where they spent the money. At that point, they can decide whatever they want to tell the public because they're just going to make up where they think the –they'll get the biggest political bang for their buck. So, obviously, it does appear to be a government slush fund prior to the next election. And so your comments have been exactly where about 80 per cent of the other people have been. So thank you for your time tonight. Mr. Gerrard: Thank you for your presentation.

One of the important points that I think you raise is that the –while there's a precedent in terms of governments implementing budget recommendations before the budget is, sort of, fully passed and all the ancillary measures, but that there may not be a precedent for a situation like this, where there is actually a law saying there has to be a referendum before a tax is increased. Are you aware of any precedent that would be analogous here with a referendum required first before a tax increase? Mr.

Baldwin: No, I'm not aware of any situation where that would have been condoned and viewed as being the proper way to do things. I think there is an analogy, as I mentioned in my presentation, to the situation regarding the Manitoba Jockey Club and some of the actions that occurred relative to the VLT monies that they have been receiving in the past, and it was decided by the Finance Minister that that would no longer be done and he was told, as the result of a court case, that he was ou t of line to have done that.

So I think that should have been an indicator that you can't just go counter to something that is a law on –that's in existence and do things in an ad hoc way. Madam Chairperson: We have a little bit of time left. Does anyone else have a question? If not, thank you so much, Mr. Baldwin, for coming out tonight. I did forget to ask–that was our last out -of-town presenter that we are aware of. Is there anyone else in the audience that is an out -of-town presenter that we didn't have asterisked as such?

If not, then we will go back to the top of our list and go to Dave Mouland, and if I'm not pronouncing your name wrong, please feel free to correct me. Everyone is. No. [interjection] Wight, all right.

250 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 Mr. Mouland, do you have –[interjection] Oh, sorry. You do have some papers to distribute. Thank you so much, and please go ahead with your presentation. Mr. Dave Mouland (Private Citizen): Good evening. You weren't too bad on my name , but it's Mouland. Madam Chairperson: Mouland. Mr. Mouland: Right. Madam Chairperson: Thank you. Mr. Mouland: Okay. Good evening, my name is Dave Mouland and I am retired but volunteer at Winnipeg Harvest about 20 hours a week. I work in the call centre so I deal with and talk with people who have many poverty issues besides my own.

I am here today to address this committee about the huge tax increase this government is proposing to implement, even though a promise of no tax increases was made by this government in the last election campaign. My main concern is the poor, the elderly, retired poor and the working poor. This group of people will be hardest hit by an increase to the PST. All of these people are trying to live on the edge simply because we do not have an adequate income to survive. Even the Premier has stated that no one can li ve on $3.96 per day, and yet this is what the welfare rate is for a single person for food.

This same person– and, yes, we are people–is allowed $275 a month for rent. What kind of housing can anybody get today for $275 a month? We, the poor, must also cons ider where the money is coming from for our medical care, the cost of an ambulance, Pharmacare deductible, the cost of transportation, clothing, heating, water, all of which will go up with this proposed increase in the PST. With my wallet and my pockets empty, we cannot afford any more increases, so I have a few proposals to make. The new tax on tobacco products I would double.

The first half of that $18 million, put into the welfare rental rates to bring them to 75 per cent of the median market rate. The rest of this tax to be used where needed most, infrastructure comes to mind. This is a tax increase no one could complain about, and this is coming from a pack-a-day former smoker. Manitoba Hydro rates must stop now. The three major projects under consideration now will do nothing to improve the standard of living of Manitobans, which is my only concern. The US can provide their own energy supply as there is a huge supply of North American energy from natural gas, oil, coal and hydro.

This Province cannot afford to carry a debt load of twenty -five to forty billion if a project goes ahead as planned. The provincial debt could increase by as much as $40 billion as all estimates are always on the low side. * (19:20) We cannot get Manitoba companies to bid on the work of building housing for the workers, too much red tape involved is the issue of here. It looks bad when we have to import log cabins from Nova Scotia.

To say that these projects will provide work for Manitoba is not really true, as these crews move around from one project to another providing some limited employment to the local population for the duration of the project. Though once complete, the work crew is gone. What then? Well, I would ask how many Manitobans does it turn–does it take to turn on a light switch?

A province with a declining population of less than one million people cannot play the interest–or cannot pay the interest on Hydro debt of nearly $40 billion- plus all the other provincial deb t with no long- term benefit except bankruptcy to look forward to. If these projects were allowed to go through, the hydro generated would be sold to Manitoba at full market price; 30 per cent of the balance sold at market price, the other 70 per cent would be sold on the stock market for pennies on the dollar. Manitobans supporting the USA.

Stop building winter roads into communities for millions of dollars a year with only a few weeks or, at worst, a few days of use due to the weather. Best solution to t his is to build a permanent all- weather, all-season road up the east side of the lakes to provide year -round access to these communities. Once built, upkeep would be much less than the cost of winter roads every year. We could at least, at this point, te ll UNESCO to go to hell, as well. Stop messing around in other countries' problems. Devils Lake is a US problem, not ours.

We as a province have spent millions on lawyer fees objecting to what the US will do anyway. It is their problem and it is up to them to fix it, as they will, without any input from us. Shut down small claims court. The cost of running this court, which cannot enforce any judgment it makes, is just added onto the poor as it is

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 251 mostly the poor that use it. As usual, the court gets its cost paid by the user, but any judgments made are never paid unless you go to other means to collect. Do not use tax dollars to buy votes at election time. If a political party needs money to run a candidate or open offices and such, then get up off your butts and earn it. When you come knocking on my door for funds, I can only say one of two things, and they are: yes or no.

Seventh and final item: put an end to the payroll tax on employees to allow new companies and out-of-province businesses to create new jobs and a larger tax base within Manitoba instead of having these businesses go elsewhere. Thank you for allowing me to appear tonight. Thank you. Madam Chairperson: Thank you, Mr. Mouland. Questions from the committee? Mr. Struthers : I appreciate hearing from you tonight, Mr. Mouland, and I was impressed with your presentation, especially the thought that you've put into the working poor.

Two things: (1) some unemployment numbers were released today, Canada-wide, showed Manitoba falling to 5 per cent in terms of unemployment, tied in second with Alberta behind Saskatchewan. So I think there's some good things happening there. But the other thing I'd like your opinion on, we've been criticized by members opposite for increasing the mi nimum wage in an organized fashion, year after year, every year that we've been in government, and we did it again in Budget 2013.

My contention is that that is a direct benefit to the working poor and helps families who make money at that level and someti mes have more than one job to keep things going. Do you share my contention or do you have advice on–in terms of the minimum wage? Mr. Mouland: Yes, minimum wage is fine.

But I do think what happens is people working at the minimum wage–the wage goes up by 15, 20 cents, 25 cents, whatever it might be, but then the place where they work cuts the hours back, so that they may have two, three, four jobs to make the same amount of money as they would if they were not –or did not have the rate increase. The Man itoba unemployment has always been good, but also, we must remember we're a very low population province. So it’s fairly easy to keep the Manitoba rates a little bit on the low side. Mrs. Driedger: Thank you, Mr.

Mouland, for your presentation, and just to follow up a little bit related to what the minister was indicating with minimum wage. In Manitoba, when people make $8,800 they’re taxed, w hereas in Saskatchewan you have to make triple that before you even have to start paying taxes. So, certainly, we w ould like to see the basic personal exemption increase so that thousands of people could be taken off the tax rolls in Manitoba to keep more money in their pockets.

We’ve had a really hard time making this government aware of what this PST increase is going to do to the working poor–or to the poor and those on minimum wage. You articulated some of this very well. Do you want to say anything more to them , because we’re sure butting our heads against a brick wall in trying to get them to understand how much this is going to hurt the working poor? Mr. Mouland: My income for the year is less than $8,000 a year, and I live off of that. And so we really don’t have anywhere to go.

Every time something goes up we do pay more somehow or other, and we pay more by purchasing less of what we need. So the way it usually works is if we were to go out and buy a 10 -pound bag of potatoes, then there’s a tax increase. The next time we go out, it’s a five -pound bag of potatoes for basically the same price plus the taxes. So t hat’s how we do it. You–it’s not that the tax base should go up before we pay any taxes. Mr. Gerrard: I–Mr. Mouland, I commend you for the work that you’ve very clearly put into preparing this presentation and the ideas that you’ve put forward.

Putting in 20 hours a week volunteering at Winnipeg Harvest, I’m sure you meet and talk with others, a nd wondered if you would just share what the general sense of others that you talk to who work or are around or using Winnipeg Harvest, what they’re telling you. Mr. Mouland: There are many stories I could tell. I can’t go into much detail simply because there’s a privacy act in effect here, but there are many people that I talked to, and as I mentioned, I work in the call centre. And I get–I talk to people who are looking for some help in extra food to get through the end of the month. We have the food.

They don’t have money for transportation to get through–be able to pick up the food. Okay, so that five dollars for bus fare or something like that and they just don’t have the money. Our option has been–well, ask the bus driver for a fare adjustment envelope, and the driver should

252 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 give you a little bit of an envelope where you put your name and your address on it, allow you to ride the bus free, and a ticket will be supplied later or you will return it when you have tickets; this kind of thing–not happening anymore. There’s –currently we would provide formula –baby formula to families with children under 12 months of age, from date of birth up to 12 months. We currently do not have any formula. Donations have been down so much that we just cannot afford it, and I’m hearing the last 10 days, where’s my baby formula?

We have to make little children suffer because we cannot afford to buy formula for people in need. Madam C hairperson: Thank you, Mr. Mouland. The time for questions has expired. I appreciate you coming down. Our next presenter is Cameron Henderson. Is Cameron Henderson in the room? If not, we will put Cameron Henderson to the bottom of the list, and move on to Dennis Lewycky. Is Dennis Lewycky in the room? Mr. Dennis Lewycky (Social Planning Council of Winnipeg): I am. Madam Chairperson: Thank you. And do you have materials for distribution? Our staff will help you. There is water.

I forgot to mention it to the presenters before, but that water sitting there is for you, folks, to help yourself to if you are presenting. Sorry for not mentioning that before. Please proceed with your presentation. * (19:30) Mr. Lewycky: Good evening and thank you fo r the opportunity, and I admire your perseverance. I hope your families are patient. The Bill 20 and particularly the increase on the retail sales tax created a real quandary for us at the Social Planning Council.

On one hand, we know that there's a serious infrastructure deficit and that the Province needs the resources to take care of some of the horizontal–what we call the horizontal elements, the roads, the bridges, the sewage systems –but also that there are the vertical elements that also need support, the hos pitals, the schools, the recreational facilities, and we're pleased to see that that recognition is in the bill. So that's the first thing. But as a society we've underfunded infrastructure and we're now paying the price in terms of a breakdown in a lot of our infrastructure.

We–and we also want to just make it clear, we also appreciate that the government is also trying to put resources into helping people on low income cope with their current situation and some of the funding for social housing and educa tion. But, clearly, more is required and more revenue is required. However, we think that there's a better way to raise the revenue than increase the consumption tax, the PST. I'd like to focus on what we think are the consequences of a sales tax increase and provide some background on what we think is a more equitable alternative to increasing the personal income tax.

Our starting point is that the retail sales tax or any consumption tax is a regressive tax that demands more of a proportion of the income for low -income people than for those of higher income households. It may not seem like a lot to many people, but the households earning less than $15,000 a year will pay about 0.2 per cent a proportion of their income if there's a 1 per cent PST increase, compared to a household that earns about $90,000 a year, they will be paying about 0.4 per cent. That's about half in terms of a proportion of their income.

So it is a tax that does tax the low -income population more than the higher income. Another dimension of the PST that gives us some concern is that it applies to business, and the reason we say that is that, well, we believe that the private sector and businesses should pay more. They've received a great deal of tax cuts over the last few years. We th ink that the PST isn't the way to do it, that the PST is not as equitable.

We expect that businesses will likely pass on the cost of an increase in the sales tax in the sale of their commodities and services and that, in effect, it would still be the public that pays for that increase. The other thing is that consumers overall are going to pay for the –we believe, are going to pay for the overall increase in the PST even on goods that are exempt from the PST because it's going to be passed on to consumers. Another way to increase the taxes, we think, is through an increase in the provincial personal income tax.

That raises the same amount of revenue, that's what we use for our standards, from households as a 1 per cent PST increase, but distributes the cost of that increase more equitably across the population. Our analysis is based on a modelling carried out by Harvey Stevens, a former policy analyst for the provincial government, using Statistics Canada Social Policy Simulation Database and Model. It's a model that is able to project costs of different tax changes. The modelling he carried out

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 253 shows that an increase provincial income tax rate of less than one half of a per cent for the different categories of provincial tax would generate about the same tax revenue as a 1 per cent PST increase, and if you look at figure 1 it shows that graphically. The average increase for Manitoba households would be about $290 a year. That's about $30 a month. Any household making less than $75,000 per year would be paying less in income tax with such an increase than with a PST increase.

Because of the way income taxes are calculated, the distribution of the personal income tax would be more progressive with the lowest family incomes, those under $15,000, paying about 0.04 per cent of their proportional income with the higher income households paying progressively higher. Now, just for comparison, middle income earners around $45,000 to $60,000 would be paying 0.44 per cent and higher income families or households earning over $90,000 would be paying about 0.5 –6 per cent, and it looks like small numbers, but calculated over the numbers it would be significant.

Another benefit of raising taxes through the personal income tax system is that tax structure can be made more pro gressive. For example, we modelled a rate of increase of about 0.25 per cent for the lowest income category, 0.6 per cent for the middle category and a 1 per cent increase for the highest tax category. These differential tax rates increases would generate the same total revenue as a 1 per cent PST increase from households, while making the tax system much more progressive and, we think, fair.

In other words, raising revenues by means of changing the PIT, the income tax rates, allows the government to create greater income equality, at the same time as meeting its revenue projections. If the personal income tax was raised by less than 1 per cent, we recalculated it at 0.8, 0.77–that's double what we were using before –then that amount of $277 million could be raised, as well as households who earn less than $30,000 would pay about the same, or less, in taxes than if there was the 1 per cent PST increase.

Though this is not an ideal strategy, because it does let business off the hook, we –it does share the tax increases, we think, much more equitably. Finally, in January of this year we submitted a report to the government on the ALL Aboard poverty reduction strategy, and in that we recommended that all government programs be tested through the poverty reduction strategy. In other words, that there would be an equity lens tested through all the budget allocations and programming.

And we feel that that would give a better representation of the impact of any budgetary or tax changes on different segments of the population. Applying such an equity lens to the 2013 budget would have exposed the weaknesses in the proposed PST increase to –in the lowering of the education property tax and for the personal exemption proposal. Most importantly, the use of an equity lens could also provide more effective alternative tax proposals for more extensive public discussion and government implementation.

In conclusion, we fear that the increase in the PST would not be in the best interest of people living on low income in Manitoba and, ultimately, on the rest of society, especially when we believe there are other options that could be much more effectively used. Thank you. Madam Chairperson: Thank you, Mr. Lewycky, for your presentation. Committee questions. Mr. Struthers : Yes, thank you, Mr. Lewycky. I enjoyed your presentation. I want to make sure I have the nub of your advice correct.

Our government was faced with a $1 billion report, a flood report, that came to us just before we presented the budget, work that needs to be done to protect Manitoba families from flooding. We were also faced with a request by the federal government through their budget. To their credit, the federal government initiated the Building Canada plan and asked us to participate; so, we needed dollars for that too. So I understand your point that we need to have ways to raise that revenue and, as Bill 20 does, direct it directly into infrastructure.

Your advice, though, is that, instead of using a 1 cent on the dollar increase to the PST, we should find that money through either the personal income tax system or through increases on the business tax side, corporate tax or small business. Is that the advice that you're giving us tonight? Mr. Lewycky: Yes, but two things to point out. First of all, I believe that we have to turn our liabilities into our assets. Right now, we are confronted by a

254 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 major infrastructure and debt situation, but I think that as Manitobans, you know–and you're listening to some of the people that are coming here, you know – Manitobans are resilient people and I don't think that anyone thinks that we're going to get out of some of these problems by reducing taxes, okay? We do need tax and we know that we get quality when we pay for it.

But our argument is, is that by taxing the poor, taxing people who are living on low incomes, we're doing two things: not only are we forcing them to carry more of the burden then they should and secondly, we're undermining our capacity to even build our social infrastructure even more. By helping people get out of poverty, we enable them to be much more a part of our productive capacity.

Right now, we've kind of caged them in a very low-income form of existence that doesn't allo w them to be part of our economy. * (19:40) I think if we open up our thinking, and that's why we're trying to link a lot of this to the poverty reduction strategy, we can not only address our deficit problems and our infrastructure problems, but also lib erate people to be much more a part of the economy. Mr. Gerrard: Thank you very much for your presentation. You've clearly done some pretty sophisticated analysis. [interjection] Thank you.

The figure 1 is pretty impressive in terms of the adverse impact on those who are of lower income. I believe that you've also been advocating, as I have, for increased shelter allowance for people on low income, and it was disappointing that the government didn't go in that direction. But, you know, I would–it would s eem to me that this is a pretty strong argument for trying to use another approach than the PST. Mr.

Lewycky: As a general rule, I don't think we're going to get ourselves out of these fiscal problems by nickel and diming, you know, a few dollars here and a few dollars there, a cut here and a cut there. I saw – you know, I've seen all sorts of –you know, the discourse around this PST increase has brought out all sorts of examples of things that should be cut or increased, and I don't think we're going to solv e our problems by nickel and diming.

I think we need a strategic change where we take on some of these big social and infrastructure issues, you know, mobilize our public creativity and capital and make some real differences. The minuscule increase for th e shelter allowance, it's not going to make a real difference in people's lives. Winnipeg Harvest has about –and food banks process over 50,000 people a month right now. Half of them are working. So, you know, we can talk about the job statistics. The fac t is people cannot live on the low incomes that they now are having to scrape by on. Madam Chairperson: Thank you. Mrs. Rowat: Hi, Dennis.

It's great to see you. I agreed with your point with regard to the legal requirement for a referendum. I think Manitobans deserve that choice. I also agreed with your comment that we shouldn't be nickeling and diming Manitobans, especially the working poor or the poor that cannot pay for the basic needs. So have you had a discussion with the government with regard to your January 2012 proposal of using a poverty reduction lens, and was that discussed at any of the consultations with regard to budget discussions? Mr. Lewycky : We've had some discussions, but I wouldn't say that we've seen a lot of results.

And it's great to have dialogue and it's great to be able to have access to government, but I think we'd like to see a lot more initiative, a bolder response. And when it comes to consultation, again, you know, consultations are fine. There's a lot of talk, but I think the important thing is where's the action that follows? And that's where I'd like to see more of a response. Again, I go back –you know, one of the beauties–one of the strengths of Manitobans is that we're active agents. You know, right in this city there's–I don't know, you know, 40, 50 agencies and thousands of people working in social services.

That's a resource that the government could use more, and that's what I would say. And if you were – and I invite any one of you to come to any one of the meetings where we're working with the social activists, and you'll be impressed with what's being done with very little. Madam Chairperson: Thank you very much. Our question time has expired. Thank you. Our next presenter is Mr. Josh Fisher. Do you have any written materials, Mr. Fisher? No? Okay, please proceed.

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 255 Mr. Josh Fisher (Private Citizen): I think the way that Bill 20 was implemented kind of makes this committee meeting a farce, as the current NDP has already created the act to start collecting the PST increase. What a present for Canada Day. The way the increase was forced upon us really grinds my gears. I'm sure that you've heard this over and over again. Nonetheless, you'll hear it one more time from me. Was it not the PST government that implemented the taxpayer protection act, and now, years later, it's an NDP government who is bypassing its own act?

How much time and money was spent creating the taxpayer protection act for it simply to be bypassed? The taxpayer did not get a very good return on that investment. And as a young Manitoban, I always thought I would settle and have a family in this province, but it looks to me that this government doesn't support growth in families, as this tax increase is affecting everyone. But the people who have the least, including low-income families, will feel the greatest effects, while the top in come earners will not be affected as profoundly.

The government has simply added another means of creating an income and class gap. I'm in the market to purchase a house, and Saskatchewan is looking real good right about now with their booming economy and lower taxes. I personally work in the trades and was looking to start my own business in the future. I thought Manitoba was the pl ace for me, but how am I supposed to hire and retain employees when the government promises not to increase taxes, then two years later, they force this upon us?

I'd love to go to my boss and force him to increase my wage but, unfortunately I have to cut m y expenses as the government should be doing, rather than increasing their–increasing our taxes. The NDP should remember that people at the polls don't quickly forget. That's all. Madam Chairperson: Thank you very much, Mr. Fisher. Questions from the committee? Mr. Struthers: Thank you very much, Mr. Fisher. I appreciated hearing from you tonight. Mrs. Driedger: Thank you, Mr.

Fisher, and I would say that for a lot of us, too, and a lot of the people that are coming here to present, this PST hike grinds their gears, too. What made you decide to come forward? You're–you know, sometimes people think that young people don't pay enough attention to what's going on out there. You're a young man; you're trying to make your way, obviously, looking at maybe st arting a business, getting a house. What made you compelled to want to come forward and speak up? [interjection] Madam Chairperson: Mr. Fisher? Mr. Fisher: Sorry.

I feel that there's not enough young people involved in government and also being involved i n forcing government to act upon their promises and held–holding them accountable, so I tried to get all my friends involved, but didn't work too well. Mr. Gerrard: Thank you for your carefully thought out presentation. Tell me a little bit about the sort of coffee chat where you work, in terms of how people are looking at this situation and the increase in the PST without a referendum. Mr. Fisher: Everybody seems to be kind of–it seems to be pretty, like, angering people, because it's kind of forced upon them.

They don't really seem to have very many avenues into what they can do about it. And, yes, it's not making people happy, but they don't really feel that they have anywhere to go. Hon. Peter Bjornson (Minister of Entrepreneur - ship, Training and Trade): Yes, Mr.

Fisher, I–I'm– two questions: One, you mentioned that you're a tradesperson and you're thinking about starting your own business and I'm responsible for the portfolio that has a number of different programs that support young entrepreneurs, so question one is what is your trade and the second question is what was the –what were you hoping to establish–or when were you hoping to establish a business here in Manitoba? Mr. Fisher: I'm a framer by trade and I was looking to start in probably the next three to five years. Madam Chairperson: Thank you. Are there any further questions. We have a few –no?

If not, thank you so much for coming. And our next presenter is Mr. John McDonald. And do you have materials with you, Mr. McDonald? Mr. John McDonald (Private Citizen): No. Madam Chairperson: Okay. Please proceed. Mr. McDonald: Okay, Madam Chair, attending MLAs and others, a lot of what I was going to say

256 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 has already been presented, so I'm going to try to get out of that, but a couple of things that come to mind is after attending some other hearings here –I believe Mr. Struthers was m inister of Agriculture at that time, if I remember right –that presentation among hundreds of others was totally ignored also, as I feel this one is. The bill to increase retail sales tax is just one of the tax increases this government has placed on us. The previous one, last year, was an expansion of the tax on insurance prem iums. That alone brings in millions of dollars.

I'm an insurance broker of one of the largest brokerages in Manitoba, and I know what the premium dollars are out there and what taxes come in. Of course, we're at the blunt of it. Why has my premium gone up 8 per cent? * (19:50) But anyway, also with Mr. Struthers, I have a couple of direct issues that you had brought up during–has to do with the tax–is increasing the minimum wage is fine, yes, but Dr. Gerrard gets his 25 per cent –25-cent raise; Mrs. Dr iedger, who's been working there for two years, wants her 25-cent-an-hour raise. It goes up. It's not just the lower paid employees.

You ever been in business on your own, a 25- cent increase per hour costs the employer lots of money and some of them have l aid off people. Also, you mention health care, a little scare tactic against the Conservative, the two –scary two-tier health care. I've had to make use of it twice in Alberta. It seems to be working quite nice out there. The time to wait for an MRI for my wife, twice, was so long that we had the surgery, we had the MRI back in four days, the surgery done before the letter came from the medical system here for the date of her MRI. Now, it's not a bad system. It can be worked properly.

I had talked to the mi nister at that time, I can't remember who it was, but because I'm a supporter of an opposition party I know where it goes. Nowhere. And as far as this sales tax, yes, 1 per cent doesn’t seem like much but it's the principle of the thing. There's a law in place to prevent it, to keep the government accountable and it seems that the NDP government in this province, plus the federal leader, feel that they don't have to obey the law. I think he run a bunch of stop signs and ran away from the RCMP a couple of weeks ago.

Okay, now, we hear from the leadership the tax increase is to assist in flood control. I don't think that came this year. They said, during the election, they'd keep the classrooms to a certain size. That cost money, never said where the money would come from. Now a couple of weeks ago the tax was to cover that cost. To me, they had intended to raise the sales tax anyway but were given advice by their backroom people not to say a word because where was that money going to come from.

That would be the same as me promising to donate to Child Find, say, a hundred thousand dollars, then going to my employer and saying, this is what I've done, give me the money. We the taxpayers are your employer. Now these promises are made –Sally Housser who was in the paper today, here again, where is that money going to come from. All of a sudden, it's coming from the seven –1 per cent increase in sales tax, all of a sudden. I think this was the plan made two years ago, keep it hidden.

It is deception as someone said, some have been a lot stronger, I'm not going to use those words because I've worked with politicians, election tim es, since Gerry Mercier won Osborne, that's going back a few years. And I have heard some of the things the guys setting the rules for the candidate do. I know none of you are stupid people. You've got to be smart; you’re here. You work hard. Not everybody will believe that but I know how hard you work but I think some of the people that give you advice are morons, and if they're here they can come and talk to me.

I think that's about it for what I have to say, oh yes, we had a large tax increase last year, insurance premiums, couple of years ago, there was an additional payroll tax on the farming community. Now the–gets a lot of spin, answers, I know you're not supposed to answer a question with a yes or no but spin off on to what you've done, roads, education, medical. I thought that was poor man's tax was supposed to pay for that, all our VLTs were supposed to assist in the medical costs. Now we're saying we need the 1 per cent to help that. Mr. Minister, you have said the money will go directly to road s and education.

That promise was made during elections. Where was this magic multi - millions of dollars then to make these promises. You didn't have the money, don't make the promises. Yes, I supported the previous leader of the PC Party, but I think some of his advice was wrong because he tried to out NDP the NDP. It ain't going to work. And there's another bill coming up, Bill 18, which I'll speaking for or against. But it's against bullying. Pushing this seven–or 1 per cent sales tax

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 257 through, to me, is nothing short of bullying when it's against the law. Thank you. Madam Chairperson: Thank you, Mr. McDonald, for your presentation. Committee questions? Mr. Struthers : Thank you very much, Mr. McDonald. I appreciate your advice. I found it very straightforward, and you didn't mince words; I appreciate that. I also appreciate that you have the courage of your convictions to stand up and have a party affiliation. I think everybody should do that, and I commend you for it.

You brought up, though, this –the–what you call a scare tactic that I used earlier in the evening tonight. But then you went on and you seemed to back up Mr. Pallister's view that we should have a two-tier, for -profit, private health- care system. Wouldn't, then, you give me credit for making sure I got Mr. Pallister's statement correct, if you agree with it? Mr. McDonald: I agree with the two -tier system because I've had to use it and I've had other friends have to use it. Now, I'm not a multi -million dollar income person. AIR MILES paid for the trip. My daughter worked for WestJet, big discount, okay.

But we still would've had to go. Now, the two-tier system can work if it's done properly with some forethought. There's been all kinds of scary things, all the doctors are going to go the second tier. Not if it's priced out right. It seems to be working in Alberta. Mrs. Driedger: I'll defer to my colleague from Brandon West. Mr. Helwer: I think it is a scare tactic that the minister's using on two tier. But I'm interested in your comments. And I live in Brandon, so I'm classified as a rural person in Manitoba, and I experienced our two-tier system in Manitoba today.

I went looking for a clinic, and I was turned away from two Manitoba clinics that are run by the WRHA because I don't live in Winnipeg. I don't have access to Manitoba health care because I live outside of the perimeter of Winnipeg. So Manitoba does, indeed, have two- tier systems, but they decline care to people outside of Winnipeg. I'm interested on your comments. Mr. McDonald: That comment does not surprise me. I've heard it before. If you want service outside of Winnipeg for a certain condition, you got to see a clinic outside of the city of Winnipeg, which is not right.

We all pay taxes for our medical system. You know, it's certainly not free. And that's really my comment on that. Mr. Struthers : Yes, just further on that. I do– I commend you for being honest enough to tell us what you honestly think about a for -profit, private, two-tier system of health care. And you and I disagree on that, and that's fine, that's the basis of democracy. We can actually have differing opinions and still get along and you can–we can buy each other beers after, that sort of thing, right?

You must be very disappointed in the members opposite, then, who get up every time I say that their leader said that they would do a two- tier, private, for-profit system health care, and then try to twist the words of their own leader to say that that's not really their position. Do you believe your position and Mr. Pallister's, or do you believe the position of the member for Charleswood (Mrs. Driedger) and others who try to back away from that in committee? Mr. McDonald: I have not heard what Mr. Pallister said in the House here. And I do not get either paper .

I happened to pick one up at the gym and read it today. But I am favour of the two tier. It's going to be for profit. There's nothing wrong with profit. I think if you make a profit, you pay taxes. But it can be set up in a proper manner. I'm convinced of that. As I says, it works in Alberta. * (20:00) Madam Chairperson: Thank you. Mr. McDonald: Okay, and I know we can argue all night. Mr. Struthers: That's okay. Madam Chairperson: Thank you. We have a few seconds left. No? Thank you so much for coming down. And our next presenter is Kristina Poturica. Did I get that anywhere close? Ms.

Kristina Poturica (Private Citizen): Oh, pretty close. Madam Chairperson: You say it. Ms. Poturica: Poturica. Madam Chairperson: Poturica. Oh. Ms. Poturica: Yes. Just like it's spelled. Madam Chairperson: Like in the– Ms. Poturica: Think of pot eureka.

258 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 Madam Chairperson: Poturica, perfect. And you have materials and are handing them out? Ms. Poturica: Yes. Madam Chairperson: Thank you. Okay, please go ahead with your presentation. Ms. Poturica: To all the presenters, the committee members and all Manitobans. I'm here today to bring attention to an injustice.

Our rights as citizens of Manitoba, Canada, are being violated by the very people that we elected to represent us and to respect the right of all people of Manitoba to have a voice in the decision on whether or not to increase the provincial sales tax by 1 per cent by holding and binding referendum in which all citizens can either approve or disapprove of this increased tax.

As I was walking across the Legislative Grounds today to attend this public hearing, I passed by the Nellie McClung monument and was reminded that these women fought hard for myself and other women across Canada and the world to have the right to vote. I believe that we h ave taken a step backwards, and what would we –they say to Mr. Selinger about taking away our right to vote on this increase in PST? I believe that we–they would be appalled by this violation of our right to have a say and to vote on something that will impact our lives in so many ways.

I consider myself so fortunate to live in Winnipeg, Manitoba, and to be a Canadian citizen. I know that my life as a woman in this environment has offered me opportunities that some women only can dream of. I have the right to educate myself, to open and run a business, to decide my destiny in every way, and, yes, the most precious of all, I can vote. My parents left a war -torn country to come to Canada and to provide their family opportunities that they could not provide for us there, and so did many others and still many today. Why did they come here?

People immigrate here because our standard of living, our democratic society allows people to live their lives to the fullest and to have choices that most likely they would not have in their homeland. The majority of them live under governments that do not and will not respect their right to live their lives with freedom of choice, their right to have a vote on anything that affects them. I believe by not following due pro cess and by deciding to change it without the vote of the people, it's letting them down and all existing citizens in Manitoba–Canadian citizens in Manitoba.

What example are we setting for them? Are our leaders following their mandates with honesty, integrity? Are they making hard choices to make sure that they are keeping their platform promises and adhering to the letter of the law? Are they being accountable for their use of power and judgment in how they spend our taxpayer dollars? These are all questi ons that –I don't know–what are the answers? As a small -business owner in Winnipeg, I have successfully owned and operated a hair and esthetic studio for the last 10 years.

The last two years, even though we have grown in size and the number of employees, we have seen –not seen an increase in profitability to reflect that growth. In dissecting every aspect of my business according to my accountant–all the different places I have to look to see where I could decrease our spending to be able to increase wages and future growth–I noticed that our ability to charge out for our services was not keeping up with the rate of increase of our expenses. So I was planning an increase in our pricing, which we try to do about every two years.

However, just as we were goi ng to implement the increase, we were informed that all of our services were now going to be taxed by extra 7 per cent except for haircuts under $50. I still don't know who was the person who decided that. I'm trying to figure that one out, which, by the w ay, a 7 per cent increase is way over what I would even increase our prices in one year. I mean , that's a high increase. It was so unexpected and, of course, so devastating to realize that we could not now increase our pricing to keep up with the rising cost of doing business and to give our employees a much-needed raise.

If you work on commission, that's how you get your raise. Although, to a client servicing us, they saw it as an increase, and, of course, we had to apologize for the increase and to expl ain this –that this money was not going to us, but we were forwarding all this money to our government for them to decide where it should be spent. Over the last year, we have collected, from our clients, over $36,000–and that's roughly –which we have not directly benefit from and now we are going to have to pay–add another percentage to that, which we did July 1st.

What could I do with that income to benefit our team and clients? We could have hired another apprentice, had a wage increase for existing staff,

July 5, 2013 LEGISLATIVE ASSEMBLY OF MANITOBA 259 given more bonuses, invested in education, et cetera, et cetera. We have also noticed a trend in clients' spending habits as well as in reduction of visits per year because they are also trying to stretch their dollars to go further. So we are looking for ways to reduce our spending and to make our dollars go further.

We have laid off one person; we have hired–we haven't hired anyone; we have lost one person to Alberta, higher wages and opportunities; one to mat leave, can't help that one; and one who decided to work for herself because I could not give her an increase in wage that she was asking for. She decided to go and–what we call chair rental in our industry, and it's a trend in our industry and a lot of trade-based industries, that people want to hide their income. So I think you will see this trend across the board.

When a person's take -home pay stays the same and the expenses around them keep going up, then people become very creative on how to hide what they earn so they do not pay tax on it. So, in essence, you create a whole underground economy that keeps growing. Of course, those of us who choose to run our businesses honestly and are incurring overhead, hiring employees, subsidizing apprentices, paying out benefits, we are hammered by gov ernment taxes, extra benefits to pay out, such as CPP and EI, which they're proposing an increase, business taxes, et cetera, and we cannot hide our incomes, so we are suffering.

I have spoke with many salon and small-business owners that are either wondering why are we doing this, taking on all this extra risk, expense, et cetera, and some have gone under. You may say, well, that is the risk you take when you're opening up a business and so you should be more savvy in how you're running it. Well, I have been savvy and I've been frugal. However, I can't –I cannot compete with the wages and benefits paying– being paid out to government and city employees at all and certainly cannot compensate for tax increases that are now influencing how much my clients are willing to spend or service us.

I have 28 years of experience in what I love to do and I certainly have not seen that my wages keeping up with the wage increases in the non-private sectors. What I can do, though, is improve our odds of success is to provi de excellence in service, value-added services, competitive pricing and evaluate our standards to justify the prices we charge.

However, when the clients are going to be hit with an increase of taxes on all of what they buy, they will change their spending habits based on how much income they have left over, after paying for all the essentials and leave less disposable income to spend on things that they really enjoy. I could see this may also influence people moving to other provinces and increase cross -border shopping as well. So, I ask you, are we setting up Manitobans for failure and creating an uncompetitive climate for business development, growth, both existing and new investment?

Seeing that Manitoba is approximately 60 per cent driven by small business, I do not see how this is going to spark our growth and job development. I can see how this will decrease our odds of this happening and employers laying off more employees, hiring less, expanding less and really not wanting to take the risk of even starting a business in Manitoba.

They may choose to go to other provinces where they have been paying attention to reducing their spending, reducing taxes, investing in small business, reducing government bureaucracy, becoming more efficient with their sp ending, meeting budgets, reducing investment in projects that should be mostly privately funded and overall focused on spending our tax dollars just more wisely. That's what I've been asked to do. * (20:10) So, in conclusion, I challenge our leaders to engage in all Manitobans and take this proposal to the people of our great province.

Let us have the right to decide how we want to spend that hard-earned money and to hold our leaders accountable on how they spend that money. If they truly believe that this is the best way for our province to prosper, then they should take –be able to defend that and prove it to us that this is the path that we need to take. I want and I need to have faith that we, the citizens of Manitoba, have a voice and the right to invoke the process that is in place to protect those rights. Thank you for allowing me this time, and I thank you, all in attendance, for your ear.

Madam Chairperson: Thank you for your presentation.

260 LEGISLATIVE ASSEMBLY OF MANITOBA July 5, 2013 Questions from the committee? Mr. Struthers: Thank you very much, Ms. Poturica. I think you make a very clear case against the increase in the PST. And I think you also make a very good explanation to the impact that's going to have on your business and your clients. So I appreciate that. I also know that this tax increase has come along at a time when there's increased city taxes, and increased federal taxes, and other challenges that you and other small businesses are up against.

We have some huge challenges in terms of flood infrastructure, to the tune of a billion dollars, that we have to address as a Province. We want to participate in the federal -provincial Building Canada Fund that has come out. This is –these are billions of dollars that we have to have on the table to participate or we miss out. Some provinces increase health premiums to pay for it, and some increase personal income tax to pay for it. Some have cut –and not just minor cuts –but some have cut very deeply into health and education and other things.

What's your advice to me on how we should get the money to participate in those infrastructure challenges that we face? Ms. Poturica: Well, I'd say that I'm not opposed to paying taxes and getting services. I believe that's the only way we're going to get them. But I am a person that has been client servicing for many years. And so I believe that I have to decide what I'm going to give that client for the money that they are paying, and does my service match the amount of money that we're paying.

So, if the government can take that same attitude, and say, okay, you know, I'm going to give you this service for the money. I'm going to provide you with the details on how I spent that money. And also be forthright in saying to us, as Manitobans, hey, we have this challenge, yes, we do. But in the end, I feel that there's been investment in projects that really truly should have been private investment mostly, and very little from the community. And so that's happening again and again and again. And I'm seeing that happen.

No one comes to my door and say, hey, Kristina, do you want another extra $10,000 to increase your – to improve your place ? All the money that I've borrowed, that I've asked for, I paid back, and I paid with interest, right. So I would think it would make more sense, as the other man was saying, is to look at personal income taxes and increasing them on the people that can afford it. I have looked at the statistics about what people make across Canada. And, yes, for $8,000, why is anybody in Manitoba paying taxes when you earn $8,000 or less? That seems ludicrous to me.

So, yes, I think that's the key, is to look at a more fair way of doing it , because somebody comes to the till and is paying that money, but really doesn't have a good understanding where that money is going. And the general attitude that I have from people and clients in my chair –I talk to a lot of different people, a lot of different income groups –personally, they think coming here is a waste of dime, but I don't feel so. I feel we have a right to speak out, we have a right to vote, and I encourage everyone to do that.

And, as a woman, living in this country, that is like the biggest right you could ever have, because you can jus

Document details

Collection	Manitoba — Debates (Hansard)
Citation	40-2-sed5
Type	hansard
Volume / chapter	40th 2nd hansardpdf sed5.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	35a4c3d96e4bb5975a5429dcdcf1a18cc9f533b8

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