The double-edged sword of inflation

FOR governments, inflation is a double-edged sword. The problem? More goes out, and, in a lot of areas, less comes in.

You need look no further than the front page of Tuesday’s Free Press to see why.

First off, there’s the provincial government’s plan to freeze Hydro rates for the coming year — the freeze will provide some small relief to customers facing a wide range of inflationary price increases in the past year, and the freeze is at least a small nod towards addressing the difficulties people are having with affordability. Problem is, just like the removal of the provincial gas tax last year, capping rates for a provincial utility that’s already losing money because of the impact of low water levels on hydro production will take money straight out of provincial government coffers.

Second, there’s a story that affects the City of Winnipeg the most, but is bound to affect the provincial government as well. Winnipeg has a waste problem: there just isn’t capacity in the city’s current sewage system to handle the volume of biosolids the city produces, and that problem will become absolutely critical within the next four to six years. (The term “biosolids” is a lovely little euphemism. Here’s a definition from the U.S. Environmental Protection Agency: “During wastewater treatment the liquids are separated from the solids. Those solids are then treated physically and chemically to produce a semisolid, nutrient-rich product known as biosolids. The terms ‘biosolids’ and ‘sewage sludge’ are often used interchangeably.”) As our story points out, without the completion of the north end sewage treatment plant, the city could reach a point where it will have to stop development of new homes and businesses, due to an inability to handle the volume of waste.

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