Manitoba Tories call PST increase a 'punishment'

Manitoba's opposition party came out swinging Thursday, saying it's not happy with the NDP government's decision to raise the provincial sales tax to eight per cent.

PC Leader Brian Pallister proposes spending cuts within government

Manitoba's Progressive Conservatives propose their alternatives to raising the PST, while some of the province's lowest income earners worry about how the tax hike will affect them. 1:48

Manitoba's opposition party came out swinging Thursday, saying it's not happy with the NDP government's decision to raise the provincial sales tax.

In the latest budget, released earlier this week, Finance Minister Stan Struthers said the province is raising PST from seven per cent to eight per cent, for the next 10 years, to cover infrastructure costs including roads, hospitals and flood prevention measures.

The Progressive Conservative Party says the tax increase amounts to a "punishment" for voters and would hit a family of four hard.

Instead, the Tories said the New Democrats should have drastically cut spending within government to come up with the cash.

If elected to government, PC Leader Brian Pallister said his party would scrap the allowance given to provincial political parties based on how many votes they get.

The Tories would also cut executive senior civil servant positions, reduce hiring into Manitoba's civil service, and slash government advertising and communications.

Pallister said he would then ask every government department to reduce their budgets by one per cent.

"What we're proposing is spending reductions," he told reporters Thursday in Winnipeg.

"We're outlining pretty clearly, I think, the nature of the types of spending reductions we would recommend the government implement as opposed to raising the PST in the first place."

PC Party officials said they could produce a total of $287 million in savings a year with the following reductions:

  • Eliminating the vote tax: $600,000.
  • Executive senior civil servant reduction: $9.2 million.
  • "Hiring chill" in the civil service: $77.9 million (pending a full spending review).
  • Government advertising spending reduction: $11 million.
  • Communications staff reductions: $11 million.
  • Improvements to the province's tendering and procurement process: $35 million.
  • Amalgamating East Side Road Authority and Manitoba Floodway Authority administration with Manitoba Infrastructure and Transportation: $8 million.
  • Savings from Joining New West Partnership: $14.1 million.
  • One per cent savings across government: $120 million.

"The difference is that the NDP is not willing to look within their own operations to find these savings," Pallister said. "They say they are, but they don't do it."

'We acknowledge that we've made changes,' says Selinger

The Tories aren't alone in their anger over the PST hike, with some critics accusing Premier Greg Selinger of breaking a promise not to raise the PST.

But Selinger denied that claim on Thursday, while he was in Brandon to give his state of the province address.

"We acknowledge that we've made changes, and we acknowledge that every province has made changes as we've gone forward, in order to cope with the reality that we have of a slower economic recovery and, in the case of Manitoba, major infrastructure demands," he said.

Selinger said while the PST increase may not be popular, it is necessary because Manitoba is facing another costly flood and the government has no choice but to raise money to pay for it.

Meanwhile, one political analyst says he doesn't think it will have a big effect on Selinger or the NDP.

"I don't think the NDP government is that stupid politically that they haven't made careful calculations about what damage this will do," said Paul Thomas, a retired political studies professor from the University of Manitoba.

He said the NDP likely did surveys with the public to understand what the fallout will be.

Thomas added that the next provincial election won't be until the spring of 2016, and the NDP is likely counting on Manitobans having short memories.

"I don't think it's a foregone conclusion, though, that this one decision by the government will seal its fate — that it's bound to lose in 2016," he said. "I think it'll be a closer election."

Thomas said because the money raised from the PST increase is going to infrastructure and flood protection, voters may find it more palatable.

The new PST rate will take effect in July.