PC's launch lawsuit against Manitoba NDP over PST hike

Manitoba's Opposition Tories followed throughFridayon a promised lawsuit against theNDPgovernment's provincial salestax increase.

The Progressive Conservatives filed documents that ask Court ofQueen's Bench to rule the tax hike invalid because the governmentsidestepped a referendum, required under the province's balancedbudget law, for any major tax increase.

An initial hearing is set forApril 25.

"We want the hike reversed and we'd like the legislation thatexisted ... to be respected,"Pallistersaid.
The tax increase was "an attack on the democratic rights" ofManitobans, he suggested.

TheNDPgovernment responded by saying it followed properprocedures.

"This is just another political stunt the PCs have beenpromising for months. Based on the advice of our counsel ... we areconfident their case will not succeed," Finance Minister JenniferHoward said in a written statement.

The issue erupted last April when the government announced in itsbudget it would raise the sales tax to eight per cent from seven asofJuly 1.

Under the balanced budget law, the sales tax could not be raisedwithout a referendum being held.

In fact, the law required areferendum before any bill to increase the tax could even beintroduced in the legislature.

But theNDPintroduced a bill that simultaneously raised the taxand suspended the referendum requirement.

That,Pallistersaid, isthe problem."They combined the two actions into one bill and we believe thatwas illegal."

A law professor at the University of Manitoba has said theprovince appears to have contravened the balanced budget law, but islikely to survive a court challenge because governments are usuallyfree to rewrite their own rules.

Bryan Schwartz, who specializes in legislative process, said lastyear courts are generally loath to prevent a government fromamending its own laws, unless there are constitutional or charterrights at play.

A similar controversy erupted in 2012 when the federal governmentstripped the Canadian Wheat Board of its monopoly over western wheatand barley sales without holding a plebiscite among grain producers.

Opponents took the issue to court and argued the plebiscite had tobe held first under the Canadian Wheat Board Act.

The Federal Court of Appeal rejected the argument. It ruled thata plebiscite was only required for some changes, but not the endingof the monopoly. But the court also said that even if a plebiscitewere required, the government wouldprobably be able to avoidholding one by changing the law as it sees fit.

The Tories have capitalized politically on the sales taxincrease. They stalled it for months in the legislature and kept theissue front and centre in the public's minds.

Opinion polls havesuggested theNDP'spopularity has plummeted since the tax hike tookeffect and is now well below that of the Tories.

Pallisterhas promised to roll back the tax increase if he winsthe next election slated for the spring of 2016.