06/12/2013 02:05 EDT | Updated 08/12/2013 05:12 EDT

Open letter to Manitoba premier asks him to reverse decision to increase PST

WINNIPEG - Six business and taxpayer groups have signed an open letter to Manitoba's premier asking him to reverse a decision to raise the provincial sales tax.

The six organizations include the Canadian Taxpayers Federation and the Canadian Federation of Independent Business.

The letter says a higher sales tax will make it harder for Manitoba families to make ends meet.

It also says it will prompt people to travel to Saskatchewan and the United States where taxes are lower — meaning less money will be spent at local businesses.

The government introduced a bill in April to raise the PST to eight per cent from seven per cent starting on Canada Day.

The other groups signing the letter are: the Canadian Restaurant and Foodservices Association, the Mining Association of Manitoba, the Manitoba Restaurant and Foodservices Association and the Western Canadian Wheat Growers Association.

Under the province's balanced budget law, a referendum must be held before any bill to boost the sales tax can be introduced in the legislature. The proposed legislation would do away with the referendum requirement and raise the tax at the same time.

The Opposition Progressive Conservatives have stalled the bill in the legislature to the point it is unlikely to pass by July 1.

In the letter, the groups point out Premier Greg Selinger promised during the 2011 provincial election campaign not to raise the PST.

"For your government to now table legislation to raise the sales tax — without first holding a referendum — is something our members, customers and supporters deeply oppose," says the letter.

"Keep in mind this is on top of many other government fees and taxes that are already rising faster than peoples' paycheques."

The letter adds that the impact of a tax increase will be felt far beyond the ranks of average citizens.

"It won't just be retail, restaurants and hotels that are impacted, all businesses and organizations in the province will be hit by the tax increase.

"Businesses will have to spend more money on taxes when they buy equipment and other things they need to operate. Thus, businesses will have less money for employee wages, training costs and other expenses that help the business compete."

The groups conclude by saying they are willing to sit down with the NDP government to brainstorm ways to save money.

The government did not appear moved by the letter.

"We've put in place a measure — a one-cent-on-the-dollar increase to the PST — which is to directly fund the infrastructure that this province needs," Finance Minister Stan Struthers said in question period Wednesday, as the Opposition Progressive Conservatives called on him to heed the letter.

"It'll directly fund the infrastructure — the hospitals, the schools, the day cares — that Manitoba families depend on."