06/04/2014 11:26 EDT | Updated 08/04/2014 05:59 EDT

Manitoba Tories challenge provincial sales tax increase in court

WINNIPEG - Manitoba's governing NDP "thumbed its nose" at taxpayers and broke the law when it increased the provincial sales without holding a referendum, a lawyer for the Opposition argued in court Wednesday.

Robert Tapper, who is representing the Progressive Conservative party in a lawsuit that challenges the tax hike, told court the NDP was bound by its own legislation to consult the public first.

Instead, the government suspended that requirement at the same time as it introduced the tax increase.

The government hasn't even tried to justify its actions, Tapper said.

"All the government says is, 'Because we can,'" he told Justice Kenneth Hanssen. "Like the schoolyard bully, it took its football home. You have to wonder what they were thinking?"

The government broke an election promise last July not to raise taxes and upped the provincial sales tax to eight per cent from seven. The New Democrats had to suspend a section of the balanced budget law that required a referendum on any increase to provincial sales, income or payroll taxes.

The NDP could have introduced a bill separately to sidestep that referendum rather than attach it to a budget bill, which required all government members of the legislature to vote in favour or risk toppling the government, Tapper said.

"Why do it in one bill?" Tapper asked. "Was it arrogance?"

He suggested the government disregarded Manitobans when it overruled it own law.

"Perhaps they don't want to say out loud," he said. "They don't care if the people of Manitoba have a say."

The NDP said the government had the right to raise the sales tax and sidestep a referendum. Government lawyer Jonathan Kroft said a right to a referendum is not required or protected under the Charter of Rights.

"There is no constitutional right to a referendum," Kroft said. "If you can never grant a referendum, except if you do it forever, you can never have a referendum."

People were able to express their opinions through committee hearings, he said. He argued the provincial government has a right to manage the economy and change laws freely. No court should be able to dictate what the legislature chooses to discuss, he said.

"We can't bind them and we can't tie their hands," Kroft told the judge.

"The court is being invited to tell the legislature what it could and couldn't talk about. That's a matter covered by parliamentary privilege. This court should not be going anywhere near that question."

The judge reserved his decision.

The government has said it had to raise the sales tax to make important investments in infrastructure. Finance Minister Jennifer Howard said the government will defend its right to make "necessary decisions to protect the services and the jobs that Manitobans count on."

"To try to involve the courts in what is a partisan discussion, I think that is a stunt," she said. "That is a political tactic."

Conservative Leader Brian Pallister, who was in court Wednesday, said his party had to challenge the PST increase on behalf of Manitobans. The Tories are paying for the lawsuit through donations.

"Manitobans aren't benefited by a government that hikes taxes and they sure aren't benefited by a government that breaks its word," he said outside court. "They also deserve to be respected and given the chance to vote on major tax hike proposals such as this one."

Pallister said he would repeal the tax increase within the first term if the Tories were to win the next provincial election expected in April 2016.