July 21, 2014 4:49 pm

Legal battle over Manitoba sales tax hike may continue

The legal battle over Manitoba's sales tax increase appears set to continue, with the NDP government and Tory Opposition leaving the door open to more court action.

The legal battle over Manitoba's sales tax increase appears set to continue, with the NDP government and Tory Opposition leaving the door open to more court action.

Manitoba Progressive Conservative Leader Brian Pallister

WINNIPEG – The legal battle over Manitoba’s sales tax increase appears set to continue, with the NDP government and Tory Opposition leaving the door open to more court action.

Progressive Conservative Leader Brian Pallister had not yet fully read the 15-page court ruling, issued last Friday, which upheld the tax hike. He said an appeal is possible.

“Until I’ve had a chance to meet with our legal counsel, I won’t make a definitive statement on whether we won’t appeal,” Pallister said Monday.

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The province, meanwhile, said it might ask the court to order the Tories to pay some of the government’s legal costs in the court battle.

“I think that if a political party decides to use the courts to engage in political discussion when they should use the legislature, I think they should have to pay for some of that time,” said Finance Minister Jennifer Howard.

The Tories have spent much of the last 14 months fighting the government’s decision to boost the sales tax to eight per cent from seven. They stalled proceedings in the legislature and delayed passage of the budget.

Earlier this year, the Tories launched a lawsuit asking the Court of Queen’s Bench to reverse the tax hike. They pointed to a section of the province’s balanced budget law that required a referendum on any sales tax increase before the increase could be put before the legislature. The government eliminated the referendum requirement at the same time as it increased the tax.

Justice Kenneth Hanssen rejected the Tory argument. He said governments have the “constitutional authority” to make and change their own laws.

The government called the lawsuit a baseless political stunt. Still, it hired outside lawyers to work alongside government counsel, and racked up more than $150,000 in costs.

“We thought that this was a complicated case. We thought that it would benefit from more expertise rather than less expertise,” Howard said.

Pallister, whose party used its own funds for the lawsuit, said he did not regret taking the matter to court.

“I like to keep my word. I gave my word to Manitobans that we would fight this … increase every way we could.”

Premier Greg Selinger specifically rejected the idea of a sales tax increase in the 2011 election campaign, calling the idea “nonsense.” He later backtracked and said the hike was needed to fund infrastructure work and flood-prevention projects.

Pallister, who has promised to undo the tax increase if elected, said it will be a main focus of the next election campaign.

“The greatest court Manitoba has, in my estimation … is the court of public opinion.”

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