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Tories risk 'fiscal cliff'

PST stalling may see funding run out

Progressive Conservative Leader Brian Pallister.

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Progressive Conservative Leader Brian Pallister. (BORIS MINKEVICH / WINNIPEG FREE PRESS ARCHIVES)

Opposition Leader Brian Pallister's Progressive Conservatives could conceivably push the NDP over a "fiscal cliff" as they continue their assault on the July 1 implementation of the one-point hike to the provincial sales tax to eight per cent.

There is only a slim likelihood the Selinger government will run out of money this summer because of the delay tactics being used by the Tories, but it's still one card up Tory sleeves as they look for ways to further plug up the legislative process to delay passage of the PST-hike-enabling bill before July 1.

Pallister has already said his Tories are prepared to sit into the summer months, as has NDP house leader Jennifer Howard, who's cancelled renting a cottage this summer. One PC MLA said this week he could go until November.


PROGRESSIVE Conservative Leader Brian Pallister says Manitoba's taxes are high and are threatening to exacerbate the out-migration of young people to other provinces.

"Apart from Prince Edward Island, we have the worst record... in Canada in terms of the number of people we lose every year to other provinces," he said Thursday.

Every year since the NDP has come to power, Manitoba has been losing more people than it gains in interprovincial migration, Pallister said. Since 2000, the total is about 56,000 people, or greater than the population of Brandon, Manitoba's second-largest city.

Pallister said he's worried that Manitobans' increasing tax burden — including a proposed one percentage point jump in the PST on July 1 — will make the problem worse.

Manitobans may pay lower rates for auto insurance and utilities than other provinces, he said, but when taxes are factored in, they're at a disadvantage compared with neighbouring Saskatchewan. For a family of four earning $60,000 a year, the extra cost is $2,233, he said.

"We are losing our Manitoba advantage. We have a high-spending government and that high-spending government is a high-tax government. As a result, people are leaving our province. And we want that to stop," Pallister said.

But an NDP cabinet minister rejected the Opposition leader's analysis Thursday.

Entrepreneurship, Training and Trade Minister Peter Bjornson said the Saskatchewan government in its own budget documents rates Winnipeg as a more affordable place to live than Regina.

"I'm curious as to what he's basing his numbers on, quite frankly," he said of Pallister.

When a wide range of factors are considered, including university affordability, housing costs and reductions in property taxes, Manitoba stacks up quite nicely with its western neighbour, Bjornson said.

-- Larry Kusch

Summer vacations are also on hold for all Manitoba legislature and political staff until there's a resolution in this impasse between the Tories and NDP -- an impasse that could eat up the month of July and perhaps beyond.

The big club the Tories hold is that their house leader, Kelvin Goertzen, has pulled little-used procedures out of the Rules of the House to delay full approval of Finance Minister Stan Struthers' April 16 budget. The NDP had calculated that the budget, through a process called estimates, would be approved by June 13, the earliest the house can break for the summer.

But at this stage, only 13 hours and 16 minutes of estimates have taken place, out of a maximum of 100 hours, about 31/2 weeks, the usual amount of time the process takes in the legislature.

Howard said Wednesday the NDP, depending on whether the Tories agree, will hold estimates in July.

The problem for the government is the extra time needed to pass the budget means some new funds that were supposed to flow as of July 1 will be delayed, she said.

The government could introduce interim supply motions at a moment's notice to get money moving, but the Tories would likely hold up those from going to a quick vote.

"But there are some July 1 grants, even with interim supply, that may not be able to flow until the actual estimates process passes," Howard said, adding to ease that pressure, the Tories have to agree to kick-start estimates.

"There are important things in the budget and even if people don't agree with all of them, it's important that non-profit organizations and daycare centres get the funding they need in a timely way," she said. "I don't think any party in the house is going to hold to ransom the services that Manitobans count on. I don't think that's subject to negotiations."

Premier Greg Selinger's cabinet issued a special warrant at the end of March to guarantee all government departments, from Health to Education to Justice, get the money they need to continue to operate, but only up until July 31, when the warrant expires.

"I think that gives us lots of time to deal with estimates and pass the budget," Howard said. "I think that would be a responsible thing for the whole legislature to do."

Whether the Tories are willing to co-operate, they aren't saying.

Goertzen said there are three pieces of legislation the Tories don't like, the top being Bill 20 that allows for the July 1 PST hike without the need of a public referendum as outlined in the Taxpayer Protection Act. Both Bill 20 and Bill 33, which would see smaller municipalities amalgamate, have been held up going to second reading by the Tories. The PCs also plan to introduce at least eight amendments to Bill 18, the NDP's anti-bullying bill.

"They could scrap the PST increase," Goertzen said. "That would certainly be a good start and we could hold conversations from there."

That's unlikely, and because the PST hike has been signalled in the budget and a number of information bulletins from the Finance Department, the NDP say the tax hike could be imposed July 1 without Bill 20 being passed.

Already, the budget has brought in other taxes, such as the increased tax on cigarettes, that took effect six weeks ago despite Bill 20 not being passed.

Goertzen said the Tories also want the NDP to agree to longer spring sittings, starting in March instead of April, and more standing committee meetings.

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