BUSINESS

Manitoba Opposition says tax increase illegal, but won't appeal court ruling

10/07/2014 01:14 EDT | Updated 12/07/2014 05:59 EST
WINNIPEG - The Opposition will not appeal a court ruling that found the Manitoba government did nothing illegal by increasing the provincial sales tax without a referendum.

Progressive Conservative Leader Brian Pallister said he still believes the tax hike was illegal, but it's now up to voters to judge the NDP government. The New Democrats broke their promise not to raise taxes when they increased the provincial sales tax to eight per cent from seven last summer, he said.

An appeal could take years and the highest court is the court of public opinion, Pallister said.

"Indications we have are that this could drag out for a long time. There would be an election before that," he said.

"I have tremendous respect for the rights of people. Manitobans had those rights disrespected and they deserve to have them respected. The best way for them to demonstrate their views on this issue is to vote."

The Tories took the government to court this summer and argued the tax increase was illegal without a referendum. The government suspended the legal referendum requirement at the same time it introduced the tax increase.

They argued the government was bound by its own legislation to consult the public first and violated the Charter of Rights and Freedoms by not doing so. Government lawyers argued that people could express their opinions through committee hearings and courts can't dictate what the legislature chooses to discuss.

Justice Kenneth Hanssen agreed and said governments have a right to make their own laws.

Pallister said the Opposition has stood up for taxpayers and will continue to argue against the tax bump.

"Today is not marking the end of anything," he said. "If anything, it is marking the beginning of a greater struggle to make sure that Manitobans get what they pay for."

The government has said it had to raise the sales tax to raise money for infrastructure projects and called the lawsuit a "political stunt." Finance Minister Jennifer Howard has said the province might ask the court to order the Tories to pay some of the government's legal costs.

Spokesperson Matt Williamson said the issue of "cost recovery" is still under discussion.

"When a party uses the courts to pursue a political issue that should be dealt with in the legislature, it's only fair that they pay taxpayers back for some of the legal costs," Howard said in an emailed statement.

The province spent $150,000 on outside legal counsel defending the tax increase in court. The Progressive Conservatives said they funded their legal costs through party donations.