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RBC Economics said Tuesday the cost of home ownership in the province edged up by 0.2 to 0.4 percentage points in the July-to-September period.

The good news is it was “arguably the weakest deterioration” in affordability across the country, the bank said in its latest quarterly housing affordability report. In fact, this was the first decrease in affordability in Manitoba since early 2008.

RBC said the erosion in affordability was part of a countrywide trend.

“The reversal in the improving trend in affordability was caused by a recent pickup in key mortgage rates as well as gains in property values… ,” it said, noting the average posted rate on five-year conventional mortgages — the basis for the calculations in the RBC measures — went up modestly from a generational low of 5.45 per cent in the second quarter to 5.73 per cent in the third quarter.

And generally strong resale market activity across the country has heated up housing prices again since midsummer, after months of widespread softness, said senior RBC economist Robert Hogue.

He said that trend is likely to continue because house prices aren’t expected to fall any time soon and mortgage rates are headed higher in 2010.

He said Manitoba markets, in terms of affordability, are pretty close to long-term averages right now.

RBC’s affordability research measures the proportion of pre-tax household income required to service the cost of mortgage payments, property taxes and utilities.

Here’s how the affordability of four housing groups shaped up in Manitoba:

• Affordability of detached bungalows increased by 0.4 per cent to 34.8 per cent, compared to a one per cent hike to 40.2 per cent in Canada.
• Affordability of standard two-storey homes went up by 0.3 per cent to 37.5 per cent (1.2 per cent jump to 45.8 per cent in Canada).
• Affordability of standard townhouses inched up by 0.2 per cent to 23 per cent (0.7 per cent increase to 32.3 per cent in Canada).
• Affordability of standard condominiums increased by 0.3 per cent to 20.5 per cent (0.5 per cent increase to 27.6 per cent in Canada).

http://www.winnipegfreepress.com/business/Housing-here-slightly-less-affordable.html

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Centres’ shutdown over holidays called symptom of underfunding

It’s bad enough a funding shortfall is forcing provincial drug-treatment centres to close over Christmas, but staff say that’s just one grim symptom of chronic underfunding at the Addictions Foundation of Manitoba.

Addicts often wait three months for drug treatment and a year to get into the methadone program. Staffing levels are stagnant, even though client numbers have increased nearly 20 per cent over the last five years. The province kiboshed a plan to hire extra staff for treatment centres, forcing many to work solo with potentially violent clients.

Come next year, the AFM will no longer be able to afford to dispatch addiction counsellors to 65 schools across the province.

And treatment-centre cooks are using coupons to save money on food.
In an interview, four front-line staff members said that, on their own, individual cuts aren’t too damaging.

Added together, though, they amount to a dramatic erosion of services for addicts at a time when the courts are ordering more people into mandatory treatment and addictions are getting more complicated.

“(AFM CEO John Borody) is just constantly putting his finger in all the dikes,” said Dave Grift, a prevention and education worker. “The AFM keeps trying to do more with no money to do it with.”

That means staff have higher caseloads, spend less time with clients and turn away people ready to get clean.

“We’re worried we’re moving to a factory style of treatment,” said Rae Kujanpaa, a community addictions worker based in Dauphin. “People are just getting rolled through.”

The AFM revealed this week it will close most of its treatment centres over Christmas to save $50,000, a move Healthy Living Minister Jim Rondeau defended Thursday. He said few people are in month-long residential treatment programs over the holidays and it makes sense to ramp up for the post-Christmas influx.

He said the NDP has boosted AFM’s budget by nearly 55 per cent over the last decade — a hefty increase.

“We continue to expand programs and make them more accessible,” said Rondeau. “We’ve been trying to get them the resources they need.”

But staff say recent increases have been eaten up by new pension contribution rules set by the province.

Salaries, mandated by union agreements, have also increased, leaving virtually no extra money to cover inflationary operating costs.

Nearly 16,000 people got treatment at the AFM’s programs in the last fiscal year. That’s up by more than 2,300 from five years ago. But staff numbers have remained static at about 280 people, said Borody.

The province recently spent $9 million on a new treatment centre in Thompson that staff called “beautiful.” But so far, the AFM hasn’t seen any extra operating funding for maintenance, to staff three extra beds or to cover a $67,000 property tax bill.

Earlier this year, the AFM hoped to make good on a long-standing promise to staff its five adult treatment centres with two residential-care workers at all times. The province kiboshed the funding request.

Addicts often suffer from mental illnesses or multiple addictions and can get violent, making it dangerous for staff and other clients. On one shift last month, a staff member working solo reported dealing with an intruder, a suicidal patient, a diabetic with dangerously low blood sugar and an incoherent client who needed an ambulance.

http://www.winnipegfreepress.com/local/addicts-out-in-cold-workers-70603952.html

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How can the province and education property taxpayers pump $93 million of new money into the public school system this year, yet have spending go up by $72.5 million?

How can spending within the $1,816,127,082 public school system go up by 4.2 per cent this year, but record spending per student increase by 4.6 per cent?

OK, the numbers in the department of education’s annual financial report are mind-boggling, and the funding of Manitoba public education is complex.

But let’s try.

The answer to the first question is that the NDP has switched its funding focus from improving the quality of education, to freezing, or at least holding down, education property taxes.

Money going into the system exceeds money spent because the province offered tax incentive grants to divisions willing to freeze their taxes. It increased education property tax credits, money which comes off property owners’ tax bills without ever going into a classroom. And the government ordered school divisions to spend their surpluses down to two per cent of revenue — in effect, spending “old” money in contingency reserve funds — rather than raise taxes.

Only 12 divisions passed up the tax incentive grants back in March when they set mill rates for this school year.

Those divisions chose to raise property taxes, because they believed that the price for tax freezes would mean cutting jobs, programs or services, or passing up improvements.
But the second question — how can spending per student go up at a higher rate than spending?

Those provincial data suggest that as enrolment declines — as it has been throughout the decade — that school boards are not reducing the number of people on the payroll. So even though there are fewer students, there are just as many classroom teachers, administrators, and resource teachers.

Opposition leader Hugh McFadyen said Wednesday that he has no problem with lower class sizes: “That is a good thing. It’s a reflection of the decline in enrolment. As a parent, I think it’s positive.”

But McFadyen said administration costs should be dropping as student numbers fall — keep the frontline teachers, but find ways to cut overhead, he said.

“The government has used tax-incentive grants to temporarily keep property taxes down,” but that’s not sustainable, McFadyen said.

Former education minister Peter Bjornson had threatened to cap education spending in this coming March’s budgets, and possibly even impose tax freezes across Manitoba. He had not committed to continuing tax-incentive grants to help achieve tax freezes.

Bjornson is gone and his successor, Nancy Allan, will not grant media interviews, at least until the end of the month, say her aides.

Meanwhile, if you want proof schools have as many teachers while students decline, try this — the pupil/teacher ratio dropped this year from 17.6 kids per classroom teacher to 17.4, the pupil/educator ratio from 14 to 13.9.

Look almost anywhere in the system, and costs per student go up faster than overall costs.

Student support services are up 4.8 per cent, for example, but by 5.2 per cent per student.

OK, you’re asking, doesn’t overall spending of 4.6 per cent exceed inflation?

Of course it does, but the base wage increase for teachers for several years has been three per cent plus cash bonuses of as much as $500, and many teachers also receive increments as they move up in seniority.

Louis Riel School Division settled this year for a contract that gives each teacher pay equal to the highest rate paid anywhere else in the city for that teacher’s level of qualifications and years of service, a contract the Manitoba Teacher’s Society’s website says is an overall 4.82 per cent increase. It’s likely many teachers elsewhere will seek a similar deal for 2010-2011.

There are other intriguing tidbits to be found amid the number-crunching.

While enrolment is inexorably dwindling, schools are busing an additional 697 kids this year, and running buses almost 500,000 more kilometers — where there’s been growth, it’s phenomenal rural growth, primarily in the rural areas around Steinbach and Winkler.

http://www.winnipegfreepress.com/local/education-department-releases-financial-data-70603797.html

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Provincial opposition and PC leader Hugh McFadyen was in Altona for an early morning meeting on Nov. 16, launching a series of similar visits to locations in several southern Manitoba constituencies.

The invitation only event included close to 35 local business people, farmers, and municipal politicians, many who shared similar concerns.

Increasing regulation on producers and municipalities (especially regarding development) was a source of frustration to many, and McFadyen said he wasn’t surprised.
“It is what I expected,” he said. “I get a lot of questions about government policy decisions. It’s been a discussion point for a number of years.”

McFadyen said often the people with concerns aren’t upset about the policy itself. “The issue is the way government goes about it,” he said.

McFadyen also hinted at changing the make-up of his shadow cabinet in response to cabinet changes made by the NDP. “I don’t think it will be dramatic,” he said, adding that MLA Cliff Graydon will “continue to play an important role.”

Graydon is currently the critic for MPI, liquor control and gaming.

Keeping support in rural southern Manitoba may be simple, but McFadyen admitted they do have to connect with Winnipeg voters.

“We’ve got our work cut out for us,” he admitted. “In many ways the concerns of the people in Winnipeg are similar to other communities as well.”

But keeping in touch with their roots is very important to the PC party.

McFadyen said the reaction they are met with shows they remain on the right track.

“I think we are,” he said. “We’ve been rewarded with high levels of support. We never take it for granted,” he added.

A plethora of issues were discussed during the 1.5 hour breakfast meeting.

Infrastructure was a big concern for many, with rural municipal officials telling McFadyen that there are increasing restrictions on things like low level crossings, even though funding for the more costly bridge replacements is not forthcoming.

McFadyen also took the opportunity to praise both current MLA Cliff Graydon and former MLA Jack Penner for their work on the Letellier bridge. Work on the new one has begun after a decade of lobbying.

“Letellier bridge is now the most famous bridge in Manitoba,” McFadyen said, referring to the number of times that file was brought up in the legislature.

He also agreed with frustrated municipal politicians that getting subdivision approvals is harder. “There’s a general pattern of the regulatory side of government winning over the development side,” he said.

Agricultural issues were also brought forward. The ban on winter manure spreading was one example. Although the producer that brought that forward did not disagree with the intent, he pointed out a Nov. 1 beginning to the ban does not make sense in a year like this when the ground is not yet frozen.

Mayor Mel Klassen asked for support from McFadyen on giving one per cent of the existing provincial sales tax to municipalities. McFadyen’s PCs have committed to give half of a percentage point to start, and he pointed out that property taxes are an “imperfect” way of creating revenue.

McFadyen wouldn’t offer a firm opinion on the harmonized sales tax proposal, saying that the department of finance must release their analysis first.

He also weighed in on the Roseau River First Nation water issue, criticizing the lateness of the Public Utilities Board deadline of Dec. 31, 2010. “It just boggles the mind how these decisions get made,” he said.

McFadyen commented on minimum wage as well, pointing out that at one time it was very necessary. “Now its more of a political candy,” he said of the recent increases.

http://www.altonaecho.com/ArticleDisplay.aspx?e=2183748

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Nipissing MPP Monique Smith issued a media release Tuesday touting the benefits the Ontario Tax Plan for More Jobs and Growth Act, which includes the harmonized sales tax legislation.

If passed, the act will increase business investment, create new jobs and raise incomes for Ontarians, the release said.

The release said along with the proposed harmonized sales tax, 93% of taxpayers will pay less personal income tax, while 90,000 low-income Ontarians will no longer pay provincial personal income tax.

The province is also proposing to almost double the property tax and sales tax credits.

Proposed tax cuts for business would enhance the benefits of the proposed HST by attracting more investment into Ontario, said the release.

The personal income and corporate tax reforms include a 16.5% tax cut on the first $37,106 of taxable income — which would make Ontario’s the lowest personal income tax rate of any province in Canada; an average personal income tax cut of 10% for Ontario families and individuals earning up to $80,000.

The act also includes an 18% tax cut for small businesses and a 17% tax cut for manufacturers.

http://www.nugget.ca/ArticleDisplay.aspx?e=2181618

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There are rarely any major surprises in Winnipeg capital budgets because they are long-term documents that rely on stable, predictable funding to maintain and improve the bricks and mortar that hold the city together.

One exception to the rule this year was the addition of $8 million to support the redevelopment of Assiniboine Park. It’s a small amount when compared with the ambitious $180-million plan to reinvent the park and turn it into a major destination, but it shows the city is committed to the amenity. That’s important because the private sector is unlikely to support the redevelopment unless the city puts up some cash first.

The funding may not be all that was requested by the Assiniboine Park Conservancy, the group that has taken the park under its wing, but it’s more than enough to get started. The money specifically targets the old duck pond for renewal, as well as the construction of a family centre near the pond.

Cities, in case anyone hadn’t noticed, cost a heck of a lot of money to run, and parks are likely to take a back seat to critical infrastructure, which itself is suffering from years of underfunding.

There are some critics who say the city shouldn’t spend a nickel on beauty until it has filled every pothole. If this advice was followed, the city might have fewer potholes, but it would make the rest of us yawn with boredom.

It sometimes seemed in the past that Mayor Sam Katz was uninterested in spending taxpayers’ money on beauty and nature when roads were collapsing, but he seems to have evolved on the question, realizing that there’s no point in good roads that lead nowhere interesting.

He once believed, for example, that condos on park property would be good for property values and taxes, an idea he has not tried to resurrect.

Funding for the city’s public art program and for image-route enhancements also remains intact in the capital budget, more evidence, we hope, that beauty is slowly being regarded as a desirable, if not essential, service.

http://www.winnipegfreepress.com/opinion/editorials/park-makeover-begins-70262487.html

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The mystery behind where Calgarians property tax dollars are going can now easily be solved with a new website launched by the city.

The Tax Talk website, launched on the eve of Calgary’s 2010 budget discussions, is intended to “help Calgarians understand where their tax dollars go,” according to a statement released by the city.

“It is an excellent tool for Calgarians to put their property tax in perspective,” said Gord Lowe, chairman of the city’s finance committee.

With a proposed increase of at least 4.8 per cent on property tax coming with council’s budget decisions, the Tax Talk site comes at the right time to answer basic questions Calgarians may have, Lowe said: “With the ability to measure their property tax against 14 other Canadian cities, Calgarians gain an important look at how they sit in relation to the rest of the country.”

The site enables Calgarians to enter the amount of property tax they pay and then breaks down that amount, dollar by dollar, into how much each citizen contributes to specific city services.

http://www.metronews.ca/calgary/local/article/370275–city-talks-taxes-on-new-interactive-website

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WATER and sewer rates are going up in Winnipeg again next year, as the city continues to absorb the cost of a $1.8-billion waste-water upgrade that won’t be completed until 2030.

The average Winnipeg household will see its annual water and sewer bill rise by $21.22 to $816.60 in 2010, based on rate increases that will go before city council’s public works committee on Tuesday.

Water and sewer rates have been rising since 2003, when the province ordered the city to upgrade its sewage-treatment facilities following a discharge of almost one million cubic metres of raw sewage into the Red River as result of an accident at the North End Water Pollution Control Centre.

The $1.8-billion waste-water upgrade, which also involves the replacement of combined sewers, is the main factor driving up water and sewer rates. Water and waste spending is financed through water and sewer bills, not through property taxes.

In 2010, water and sewer spending is expected to be $272 million, with $71 million going toward the construction of new facilities alone.

According to a water-and-waste report to city council, the precise amount of future spending is difficult to predict until the city costs out future component of the waste-water upgrade, creates a new water and sewer utility and finds out whether new Manitoba Premier Greg Selinger will agree to amend a provincial ruling that requires the city to build additional nitrogen-removal facilities into coming upgrades at its sewage-treatment plants.

Over the past two years, the city and province have butted heads over solid nitrogen removal, which most freshwater scientists believe will actually do more harm to the Lake Winnipeg ecosystem than good. The scientists have argued Winnipeg, which is responsible for about six per cent of the nutrient loading that contributes to the algae blooms and low-oxygen dead zones in Lake Winnipeg, should focus solely on removing phosphorus, which contributes to the blooms, and ammonia, which is toxic to fish.
The city believes the extra nitrogen-removal step will cost $350 million to build and $9 million to carry out every year — and will do more harm than good. Under former premier Gary Doer, the province did not agree.

But on the floor of council last month, Mayor Sam Katz said he met with Selinger and believes the new premier will listen to the scientific community.

“We have a new premier. He’s not up-to-date on this and it’s my job to get him as much data as possible,” Katz said afterward in an interview. “He definitely has an open mind and he wants the information.”

A spokesman for Selinger, however, said the premier’s conversation with the mayor was a private matter and the province’s position on nitrogen-removal has not changed. “There was an exchange of views and information. When there’s something to say publicly, we will say it,” the spokesman said.

Regardless of the decision on nitrogen, the city is still seeking more federal and provincial money to pay for the waste-water upgrade. In their report to council, water and waste officials say the city still has not seen $206 million in upgrade money promised by the province during the 2007 throne speech.

“To date, no agreement has been signed,” the report reads.
If approved by the public works committee, the water and sewer rate increases will still go before executive policy committee and council as a whole.

http://www.winnipegfreepress.com/breakingnews/hike-in-water-sewer-rates-tabled-to-fund-upgrade-69450747.html

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Re: Budget Chief Eyes City Sales Tax, Nov. 5.

This article incorrectly states that I support the sales tax plan put forward by Toronto’s budget chief, Shelley Carroll, and it misrepresents my views on municipal taxation.

I was mayor of Winnipeg when we proposed a 1% sales tax as replacement revenue for a 50% cut in property taxes as part of a larger plan developed to modernize city finances and reduce the overall tax burden. That plan was developed over two years in partnership with business, labour and community organizations.

There is no plan or partnership in Toronto to reform city government; instead city hall seems to believe that every problem can be fixed by adding or increasing a tax.

When I proposed a sales tax as part of a new tax system, Winnipeg had already made very tough decisions including cutting the city debt in half, reducing property taxes, shrinking the city government and reducing the size of the bureaucracy. The opposite has been happening in Toronto.

I believe in building the tax base, not the tax burden.

Glen Murray, CEO, Canadian Urban Institute, Toronto.

http://www.financialpost.com/scripts/story.html?id=2191889

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While taxpayers feel the pinch, B.C.’s free-spending municipalities have been expanding their belts.

A report to be published today by the Canadian Federation of Independent Businesses shows that between 2000 and 2007, operating spending rose nearly 44 per cent at B.C. municipalities, while inflation and population growth increased by only 25 per cent.

Fully 129 of B.C.’s 153 municipal governments increased their operational spending at rates that exceeded what would be needed to keep up with inflation and population growth, says the report.

“That kind of spending is disrespectful to taxpayers,” CFIB vice-president Laura Jones said Wednesday. “And it’s really out of touch in this economic climate.” The report found that Prince George’s spending rose at 2.89 times the rate of inflation, the worst among large cities of over 25,000.

Twelve of B.C.’s largest municipalities spent at a rate more than double what could be justified by their growth in population and inflation.

Robertson said it’s important to remember the amount of downloading that has taken place on cities from the federal and provincial governments in recent years.

“But remember that cities manage only eight per cent of the tax base and are saddled with downloading — provincial and federal investment in infrastructure and their key responsibilities haven’t kept pace with the core needs.

“Affordable housing, child care, transportation: All of these are more and more on the backs of municipalities, and current spending reflects that. These are crucial services to the health and well-being of our cities and we can’t simply ignore them.” The report found that only 24 of B.C.’s 153 municipalities representing just 2.8 per cent of B.C. residents kept spending within population growth and inflation.

And it’s not getting much better.

The second annual B.C. Municipal Spending Watch report shows that local governments are not getting the message about fiscal prudence. Between 2006 and 2007, 92 of B.C.’s 153 municipalities widened this spending gap, while 61 narrowed it.

To cover the shortfall, municipalities have increased their revenues by 62 per cent over the seven-year period, to fund growth in operating and capital spending.

Property taxes have risen 62 per cent, user fees increased 95 per cent, and transfer payments from senior government shot up 121 per cent over the same period.

If local spending had been kept in check, the report says, people and businesses would still have $572 million in their pockets in 2007.

And property taxes would have been 14-per-cent lower.

“The conclusion is clear — municipalities have to get a lot more serious about keeping costs under control or our taxes are going to keep rising faster than our ability to pay for it,” Jones said.

Spending on operations just keeps going up, the report shows.

In 2007, spending per municipal resident was $1,142 in cities over 25,000, compared to $1,088 the year before.

The CFIB says 60 per cent of the typical municipal budget goes on salaries, which is the main driver behind higher taxes and fees.

“Given the current economic picture, you would think that municipalities would control their spending,” said Jones. “Unfortunately, that does not seem to be the case.” A survey of its 10,000 members found that most small businesses are demanding limits on municipal spending.

The report calls on B.C. to follow the lead of Ontario and Alberta, and hire a municipal auditor-general for B.C. to make local governments more accountable.

A whopping 85 per cent of small businesses want regular audits of public spending by civic authorities. They also want municipal spending capped to hikes no greater than population and inflation growth.

Some 55 per cent blame property tax as the most harmful tax to their businesses.

“The No. 1 thing they need to do is keep municipal wages in line with the private sector,” said Jones, adding government workers receive 35 per cent more in wages and benefits from similar workers in the private sector.

Two-thirds of businesses said local governments should focus on core services, and not provide services outside their jurisdiction.

The Canadian Taxpayers Federation agreed with the report’s findings.

“This very clearly shows that the provincial government must step in and cap property-tax rates,” said Maureen Bader, the group’s B.C.

“Spending is out of control. And the only way to bring it under control is to stop municipalities from just raising property taxes at will.”

http://www.theprovince.com/health/Municipalities+spending+outpacing+real+growth/2186197/story.html

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