"We're watching it cautiously."

Those are the words of Chris Goertzen, President for Association of Manitoba Municipalities, in response to Bill 36. This bill which has been introduced by the provincial government would end the government's requirement to put one-seventh of the Provincial Sales Tax (PST) towards local capital projects.

"We've expressed our concerns that we want to make sure that municipalities receive stable, long-term, predictable funding," he says.

Goertzen acknowledges the government is trying to tackle deficits and is also looking to reduce the PST. He says municipalities want to see flexibility built into the system so that the two levels of government can work together towards a solution for this province. Goertzen notes they want to continue to see long-term funding, which is used for operating and infrastructure.

The funding which municipalities currently get from the province is predictable, suggests the AMM President. If the province opts to scrap its commitment of one-seventh of the PST, this would provide more flexibility for the provincial government, allowing the province to decide each year how much to fund to municipalities.

As mentioned, the province right now has committed one-seventh of the PST. The PST currently sits at eight percent. Goertzen notes if the PST rate is lowered, that would result in a drop in how much money is funneled to municipalities.

"We don't want to see a reduction in the dollars going to municipalities because we don't want to see the deficit being brought under control on the backs of municipalities," shares Goertzen.

He notes municipalities have huge infrastructure challenges and are not part of the problem, but part of the solution in rebuilding this province.

Goertzen says with inflation eating away at the ability of municipalities to tackle the infrastructure challenges, municipalities want to see more money, not less coming from the province.

"We have expressed concern to the provincial government in regards to this bill, we want clarity," says the AMM President. "At the same time we have a good relationship with this government and we want to continue that dialogue about how to best tackle the infrastructure and funding challenges that we all face as government."