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Winnipeg's New Deal: Innovative but "Dead"
01/12/2003

Indirectly via Paul Wells, I read that Winnipeg Mayor Glen Murray's New Deal plan has run into some problems winning the support of the populace and the province.

Over the past year or two we've heard a lot about Glen Murray as an advocate for cities in Canada. What I didn't know -- because I didn't read the stories -- was that over the past months he has put together a very specific and innovative plan, and has been discussing it with Winnipeggers and provincial politicians. It seems to have hit a major roadblock now, but it is still interesting to look at the plan since it would represent a dramatic shift in the municipal revenue structure.

The best document for understanding Murray's plan is the PDF slide show available on Winnipeg's new deal webpage. The Winnipeg CBC has also put together a brief outline.

Page 37 of the slide show informs us that the financial restructuring envisioned by the plan would reduce the City of Winnipeg's traditional revenue sources from $735 million to $387 million. However, "New Deal" revenue would produce $468 million, for a net increase of $120 million.

By my reading of the documents, the abstract theory behind it all -- if not the plan that was actually produced -- is meant to acheive a number of things:

  • Encourage economic growth and environmental sustainability by using the tax system to encourage and discourage particular activities and investments
  • Close the infrastructure funding gap by increasing the city's net revenue
  • Maintain an ability to fund city services by shifting to a revenue source that grows along with the economy
  • Entrust the city with its own destiny by permanently removing the requirement for provincial grants and instead generate revenue from defined sources

These goals would be acheived by (among other things) dramatically reducing property taxes, replacing them with frontage taxes and by consumption fees and taxes.

I haven't yet read many articles that discuss the pros and cons of Murray's proposal, so I can't yet bring my own judgement to it. However, I am intrigued by the idea and will try to explore it more.

Meanwhile, Paul Wells suspects that Glen Murray may be using the New Deal's setbacks as an excuse to bail out on the mayoralty and run for a spot in Paul Martin's cabinet. He's probably right based on the comments that Murray has made and the rumours that were already circulating. I think it's too bad, however, if his switch will mean that Winnipeg's New Deal dies on the table. It would be much better if this talk of change is carried through to a some sort of successful reform.


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