04/18/2012 03:24 EDT | Updated 06/18/2012 05:12 EDT

Manitoba Opposition says government has broken promise with tax increases

WINNIPEG - Manitoba Premier Greg Selinger is brushing aside accusations from the official Opposition that he broke a campaign promise not to raise taxes.

Selinger faced a barrage of questions from the Progressive Conservatives in the legislature Wednesday, one day after the NDP government tabled a budget that increases taxes on fuel and cigarettes. It also expanded the provincial sales tax to new items ranging from manicures to insurance.

"I want to ask the premier, is he not concerned that his credibility is now in tatters?" Tory Leader Hugh McFadyen said in the legislature.

"I'm pleased that yesterday's budget follows through on what we said we would do to protect front-line services for Manitobans. I'm pleased that we've kept the sales tax the second-lowest in the country," Selinger replied.

The premier maintained a similar tone outside the chamber where he was repeatedly asked whether he acknowledges breaking a promise.

"I acknowledge that we've generated more revenues to reinvest in essential services and infrastructure."

The Tories pointed to a leaders debate in Brandon last September in which Selinger said, according to a written transcript, that the government had "a five-year plan to ensure that we have future prosperity without any tax increases and we'll deliver on that."

The NDP also made the promise in writing, including a Sept. 2, 2011, news release that said its five-year economic plan was "on track to return the budget to balance by 2014 while protecting jobs and services without raising taxes."

"He said no tax increases in the election; he's done the exact opposite," McFadyen said.

The NDP were returned to power last October for a fourth consecutive mandate with 37 of 57 seats.

Selinger was also on the defensive Wednesday over how he plans to use the budget's hike in gasoline taxes, which are increasing by 2.5 cents a litre. The increase will result in an extra $47 million a year, and Selinger promised that every cent will be used for needed road and bridge work.

The day after the budget, however, he admitted that spending on roads and bridges will not increase by that amount. The extra tax money will be used to maintain current spending levels, with a slight increase overall expected.

"We're saying the gas tax is going into sustaining a record investment in roads," said Selinger, who pointed to a jump in capital works that started four years ago.

Ottawa is expected to transfer less money this year for infrastructure work, Selinger said, due in part to a federal stimulus program winding down. That leaves the province to foot more of the bill. Still, Manitoba already spends twice as much on road work as it takes in from its fuel taxes, Selinger said.