04/18/2013 12:10 EDT | Updated 06/18/2013 05:12 EDT

Manitoba Opposition leader says he would cut spending, not raise taxes

WINNIPEG - Manitoba Opposition Leader Brian Pallister promised Thursday to undo the NDP government's sales tax hike and cut spending instead, if he wins the next election.

"The P.C. party believes that taxes are already too high, and we believe that government should look within to make better use of the billions of dollars that we already provide to it," Pallister said.

Pallister has attacked the government's plan, announced in Tuesday's budget, to raise the provincial sales tax to eight per cent from seven per cent as of July 1. He said a Progressive Conservative government would instead cut spending by $287 million — the same amount of money generated by the tax hike.

Pallister's proposal calls for some senior civil servants to be laid off, and a hiring "chill" in the lower ranks that would see some vacant positions not filled. Government advertising would be cut, as would government communications staff.

Pallister also said he could save $35 million a year by improving the way the government awards contracts, and another $14.1 million by joining the New West partnership which currently includes the other western provinces.

"There are tremendous saving to be made by working with your neighbour," Pallister said, saying bulk buying is one example.

Pallister's plan was quickly criticized by the NDP as an attack on front-line services.

"It looks like over $50 million out of health care ... that is the equivalent of firing 700 nurses," Labour Minister Jennifer Howard told the legislature.

"He has to cut $5 million from Justice, the equivalent of 60 correctional officers, Mr. Speaker. $60 million from education — almost 200 teachers gone."

The debate over the sales tax increase is bound to intensify in the coming weeks. Manitoba is one of the few provinces with mandatory public hearings on all legislation, and opponents of the tax hike are encouraging people to sign up to have their say.

The government has to dodge a referendum on the issue by changing a section of its balanced budget law that says the sales tax cannot be increased unless the public approves it through a vote.

The tax hike also goes against promises made by the NDP in the 2011 election campaign. It said at the time it was on track to balance the budget by 2015 without raising taxes. The government raised a series of taxes last year and has taken the same route in this year's budget.

Premier Greg Selinger's own words have returned to haunt him. CTV Winnipeg dug up videotape this week of Selinger responding to an accusation from the Tories in September 2011 that he was planning to raise the provincial sales tax.

"Ridiculous idea that we're going to raise the sales tax. That's total nonsense, everybody knows that," Selinger told a CTV reporter at the time.

When asked about the change of heart Thursday, Selinger blamed the continued sluggish world economy.

"The economic recovery has not been as rapid (as expected), not only in Canada but around the world," Selinger said.

He also pointed to continuing flood worries. Two recent independent report have recommended the province spend $1 billion on new flood-fighting structures to keep river levels in check.