Manitoba NDP to hike PST to 8%

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Todrick of Chat...
Manitoba NDP to hike PST to 8%

   

Todrick of Chat...

http://www.cbc.ca/news/canada/manitoba/story/2013/04/16/mb-budget-manitoba-2013-main.html

Manitobans will have to pay more on many of their purchases beginning July 1.

Provincial officials released their 2013 budget on Tuesday, showing their plans to increase the PST to eight per cent from from seven per cent.

Finance Minister Stan Struthers said the money raised from the tax hike will go entirely to infrastructure spending — on everything from repairing and renewing roads, improving flood prevention infrastructure and increasing capital investments like hospitals and hockey rinks.

http://www.sunnewsnetwork.ca/sunnews/politics/archives/2013/04/20130416-165924.html

WINNIPEG - Manitoba will do away with legislation that orders a referendum to approve a sales tax hike and instead raise its PST from 7% to 8%, effective July 1.

The province estimates the hike will cost the average Manitoba household $25 a month, but will bring in million of dollars in new, much-needed revenue.

"Our building and renewal plan (funded by the tax hike) raises modest revenues in the fairest way possible," Finance Minister Stan Struthers said in introducing the province's 2013 budget Tuesday.

I am rather disappointed that the NDP have broken thier word on holding any referendums in regards to sales tax hikes increases. Everyone will suffer more now because of this. I know I can't afford a 25$per month removed from my budget.

 

PrairieDemocrat15

This may have killed the NDP's re-election chances.

Todrick of Chat...

I am not overly concerned about the increase, it is more of them backing their election promises. Yes it will hurt my pocket book however I understand the good it will do.

6079_Smith_W

Too bad it is on the backs of consumers rather than business, which benefits a lot from that infrastructure.

Speaking of business, in this day and age of ordering online, how much is this going to drive consumers over the border to the U.S. and other provinces?

 

kropotkin1951 kropotkin1951's picture

Broken promises usually cost more political capital than merely raising regressive taxes that hurt the average Joe more than the rich. 

I am sure they need the revenue but why an HST increase is there no place else to get the money.  The NDP is supposed to be about fair taxation and the HST is not a fair tax.

PrairieDemocrat15

They should have raised income taxes on high-income earners and corporations. That would not have created the level of backlash the government is sure to get after this move. 

Todrick of Chat...

I will be phoning my local MP and making my thoughts heard. I am very disappointed by the NDP. 

Fidel

Just think how disappointed you'll be with a Philmon-like Tory government. They'd sell their mothers for a bit o' cutter.

PrairieDemocrat15

6079_Smith_W wrote:

Too bad it is on the backs of consumers rather than business, which benefits a lot from that infrastructure.

Speaking of business, in this day and age of ordering online, how much is this going to drive consumers over the border to the U.S. and other provinces?

Well, Manitoba's sales tax raises over 2 billion dollars a year, so...

Fidel

PrairieDemocrat15 wrote:

6079_Smith_W wrote:

Too bad it is on the backs of consumers rather than business, which benefits a lot from that infrastructure.

Speaking of business, in this day and age of ordering online, how much is this going to drive consumers over the border to the U.S. and other provinces?

Well, Manitoba's sales tax raises over 2 billion dollars a year, so...

Why don't they just hike corporate taxes and drive those jobs south, east and west, too? It boggles the mind as to why they don't.

Darned NDP. They should selloff the moneymakers now before the crooked Tories get a chance at kick-back, graft and make out like bandits with sweet deals for rich friends of "the party."

Todrick of Chat...

Fidel wrote:

Just think how disappointed you'll be with a Philmon-like Tory government. They'd sell their mothers for a bit o' cutter.

Welcome back Fidel, thanks for defending the NDP.

kropotkin1951 kropotkin1951's picture

The devil made them do it really it isn't their fault.  Hell the devil even made them make a campaign promise to have a referendum if economic necessity forced them to.  Someone should send that devil back to hell because it is all his fault. The NDP has no free will they are merely pawns of the devil.

6079_Smith_W

PrairieDemocrat15 wrote:

Well, Manitoba's sales tax raises over 2 billion dollars a year, so...

Sure.... but it is still a form of taxation which puts a greater burden on the poor than on the wealthy.

And looking at the example of Saskatchewan, which has had to drop the PST in the Alberta border city of Lloydminster, there is definitely a breaking point where people will go elsewhere.

 

PrairieDemocrat15

6079_Smith_W wrote:

PrairieDemocrat15 wrote:

Well, Manitoba's sales tax raises over 2 billion dollars a year, so...

Sure.... but it is still a form of taxation which puts a greater burden on the poor than on the wealthy.

And looking at the example of Saskatchewan, which has had to drop the PST in the Alberta border city of Lloydminster, there is definitely a breaking point where people will go elsewhere.

 

 

I know. That's why I said income or corporate tax increase would have been the better option.

Catchfire Catchfire's picture

PrairieDemocrat15 wrote:
They should have raised income taxes on high-income earners and corporations. That would not have created the level of backlash the government is sure to get after this move.

Exactly. It's both bad policy and bad strategy.

PrairieDemocrat15

They may be able to reduce the uproar if the legislation will mandate the extra 1% be spent only on infrastructure.

PrairieDemocrat15

Perhaps people are not as upset as I thought. Even readers of the anti-NDP Winnipeg Free Press are divided on the issue.

Poll: What's your reaction to Tuesday's provincial budget?

5% (239 votes): Well done!
40% (1849 votes): No major complaints
9% (410 votes): On the fence
3% (148 votes): Not picky on it
43% (1965 votes): Terrible

Total Votes: 4611

http://www.winnipegfreepress.com/polls/Whats-your-reaction-to-Tuesdays-p...

The next provincial opinion poll should be interesting.

kropotkin1951 kropotkin1951's picture

Right wing parties all use the PST/HST to raise funds so it doesn't surprise me that many of their supporters would have no problem with it. 

The question did not ask what is your reaction to the NDP breaking a campaign promise. I suspect that would illicit a more negative response.

The Analyst The Analyst's picture

PrairieDemocrat15 wrote:

Perhaps people are not as upset as I thought. Even readers of the anti-NDP Winnipeg Free Press are divided on the issue.

Poll: What's your reaction to Tuesday's provincial budget?

5% (239 votes): Well done!
40% (1849 votes): No major complaints
9% (410 votes): On the fence
3% (148 votes): Not picky on it
43% (1965 votes): Terrible

Total Votes: 4611

http://www.winnipegfreepress.com/polls/Whats-your-reaction-to-Tuesdays-p...

The next provincial opinion poll should be interesting.

 

CBC readers aren't so kind to the government.

http://www.cbc.ca/news/canada/manitoba/story/2013/04/16/mb-budget-manito...

PrairieDemocrat15

http://www.winnipegfreepress.com/local/Tories-seek-legal-advice-on-NDPs-...

Apparently, the Manitoba Taxpayers Federation is also considering legal action.

These people need a lession in British parliamentary practice. This is not the US. Each parliament is supreme in it time - its hands cannot be bound by a previous government.

The NDP did lie about the PST, but changing a law does not mean the government is "breaking the law".

Aristotleded24

PrairieDemocrat15 wrote:
The NDP did lie about the PST, but changing a law does not mean the government is "breaking the law".

As many issues as I've had with every Finance Minister under this government, I believe Stan Struthers is clearly out of his depth and completely incompetent. The estimates for the last budget were off and the numbers were worse than what was originally forecast, and that may well yet be the case again. To say nothing of going around the balanced budget and tax increase laws to implement a PST increase. Which is crazy, because I think the NDP could have easily won a campaign to increase taxes on higher income earners, even in the rural parts where the PCs do well. Struthers needs to be replaced, or this could very well be what sinks the NDP to the point that Manitobans are willing to elect Brian Pallister of all people.

PrairieDemocrat15

"Yesterday's NDP is taking your money!"

http://standupmanitoba.com/

PrairieDemocrat15

On a related note: The Manitoba PCs have really lame talking points. "Yesterday's NDP?" The "speNDP?" Really?

lagatta

sales taxes are extremely regressive and target lower-income people hardest. The Marois government has also resorted to variations on this rather than (horrors!) rescinding cuts in income taxes for the wealthy, to say nothing of corporate taxes and loopholes.

PrairieDemocrat15

Apparently, WFP readers still prefer the NDP.

 

Who's got the better plan for Manitoba: Selinger's NDP or Pallister's Tories? Selinger's NDP

40% (4378 votes) results bar Selinger's NDP
36% (3917 votes) results bar Pallister's Tories
25% (2699 votes) results bar I await another option

Total Votes: 10994

The Analyst The Analyst's picture

CBC stills shows negative feedback

CBC POLL RESULTS 

The Analyst The Analyst's picture

Interesting way of looking at the matter.

"Are they so sure of their winning the next election that they feel it would be unsportsmanlike to not give the PCs a handicap?" -  Reed Solomon

The Analyst The Analyst's picture

Aristotleded24 wrote:

PrairieDemocrat15 wrote:
The NDP did lie about the PST, but changing a law does not mean the government is "breaking the law".

As many issues as I've had with every Finance Minister under this government, I believe Stan Struthers is clearly out of his depth and completely incompetent. The estimates for the last budget were off and the numbers were worse than what was originally forecast, and that may well yet be the case again. To say nothing of going around the balanced budget and tax increase laws to implement a PST increase. Which is crazy, because I think the NDP could have easily won a campaign to increase taxes on higher income earners, even in the rural parts where the PCs do well. Struthers needs to be replaced, or this could very well be what sinks the NDP to the point that Manitobans are willing to elect Brian Pallister of all people.

I doubt Struthers could've single-handedly jammed through the PST hike, cabinet (and Selinger) certainly had to sign off on it. I doubt replacing Struthers will be a silver bullet - the provincial Dippers need to seriously re-evaluate their strategy and governing style from here on out if they are to have any chance of achieving the statistical longshot of a fifth term. 

If the Province is going to rely on sales taxes, then they should issue rebates for the bottom 60%. Reintroducing the inheritance tax for estates larger than $300,000 and introducing a $100/tonne carbon tax (with a progressive rebate scheme) are some other revenue side solutions they should be considering.

Todrick of Chat...

http://www.winnipegfreepress.com/local/Manitoba-chambers-call-for-PST-referendum-206193871.html

Another group is voicing its opposition to the Selinger government's proposed PST hike.

In an unanimous resolution, the Manitoba Chambers of Commerce used its annual general meeting this weekend to call on the provincial government to respect the current Balanced Budget Legislation and ensure a referendum occurs before increasing the Provincial Sales Tax (PST) to eight per cent.

It would be nice if the provincial NDP respected the law and held a referendum.

janfromthebruce

yes, and followed the dictate of the right-wing chamber of Commerce. I'm just pointing out the glaring joining of hands in with the supposed left and right.

The Analyst The Analyst's picture

janfromthebruce wrote:

yes, and followed the dictate of the right-wing chamber of Commerce. I'm just pointing out the glaring joining of hands in with the supposed left and right.

Poisioning the well, eh?

Regardless of the bad ideas the Manitoba Chamber of Commerce can generate, they're right on this particular issue. I might view the referendum appeal as less BS-ey if Selinger hadn't actually campaigned on not raising the PST.

In another great left-right unholy alliance, I think moderate-conservative Cherenkov's idea of raising the small business tax would be much more equitable than raising the regressive sales tax.

janfromthebruce

NDP-Tory battle already on? PST move ignited race, top Selinger aide says

But the New Democrats plan to use the tax hike -- and the Opposition Conservatives' reaction to it -- to underscore the differences between the two parties in the next provincial election, he said.

snip

Next time out, the Manitoba NDP will continue a familiar theme in which it will position itself as the party that will "build Manitoba" while painting the Tories as ruthless budget-cutters who will slash frontline services.

A few days after the NDP government released its spring budget, revealing the controversial PST increase to eight per cent effective July 1, Pallister recommended several ways of avoiding the tax hike, which included a one per cent across-the-board cut in government expenses and a civil service "hiring chill."

Martin claimed the Tory plan would mean firing "at least 1,000 front-line workers."

"To us, these are workers who care for our vulnerable loved ones. These are workers who educate our children and keep them safe at school. These are workers who protect our communities from flooding and keep our roads safe," he said.

snip

Delegates at Saturday's annual general meeting passed an "emergency resolution" giving the government their overwhelming support for its planned PST hike, while not referring to the tax by name. The convention voted to "commend the government of Manitoba for raising revenue responsibly" to ensure it has the money it needs to protect front-line services and continue "to make investments that will protect our economy from ongoing uncertainty and the repeated risk of floods."

Thus, NDP delegates of the ManNDP support this. You may disagree but it does have the support of their membership of the lesser of the evils - cut services or staff or raise revenue to ensure that this doesn't happen. And yes I do get that a taxation that hits all does have a more negative effect on those with less wealth. Are there protections in place to offset this?

Aristotleded24

janfromthebruce wrote:

NDP-Tory battle already on? PST move ignited race, top Selinger aide says

But the New Democrats plan to use the tax hike -- and the Opposition Conservatives' reaction to it -- to underscore the differences between the two parties in the next provincial election, he said.

snip

Next time out, the Manitoba NDP will continue a familiar theme in which it will position itself as the party that will "build Manitoba" while painting the Tories as ruthless budget-cutters who will slash frontline services.

A few days after the NDP government released its spring budget, revealing the controversial PST increase to eight per cent effective July 1, Pallister recommended several ways of avoiding the tax hike, which included a one per cent across-the-board cut in government expenses and a civil service "hiring chill."

Martin claimed the Tory plan would mean firing "at least 1,000 front-line workers."

"To us, these are workers who care for our vulnerable loved ones. These are workers who educate our children and keep them safe at school. These are workers who protect our communities from flooding and keep our roads safe," he said.

snip

Delegates at Saturday's annual general meeting passed an "emergency resolution" giving the government their overwhelming support for its planned PST hike, while not referring to the tax by name. The convention voted to "commend the government of Manitoba for raising revenue responsibly" to ensure it has the money it needs to protect front-line services and continue "to make investments that will protect our economy from ongoing uncertainty and the repeated risk of floods."

Thus, NDP delegates of the ManNDP support this. You may disagree but it does have the support of their membership of the lesser of the evils - cut services or staff or raise revenue to ensure that this doesn't happen. And yes I do get that a taxation that hits all does have a more negative effect on those with less wealth. Are there protections in place to offset this?

As far as I am aware, there are no protections in place for lower income earners. As for the fact that the membership supports this move? The membership of other parties often supports policies we disagree with. If the members of the Manitoba NDP support a government which blatantly broke its promise and lacks the courage or the political good sense to raise taxes on higher income earners, then my decision to let my membership lapse and withdraw my support for the party was correct.

janfromthebruce

I'm just pointing out that tough choices were made. I get it and often times those choices aren't what one would like.

Aristotleded24

When a politician talks about "tough choices," (s)he is really saying, "these choices will be tough on you."

I expect a Liberal or PC government to raise regressive sales taxes to pay for their spending priorities. That the NDP, which purports to represent the working class, would resort to that is unacceptable.

Aristotleded24

kropotkin1951 wrote:
Broken promises usually cost more political capital than merely raising regressive taxes that hurt the average Joe more than the rich.

To say nothing of the fact that this gives the NDP's political opponents a handy club with which to hit them over the head with in the future, the same way the Manitoba NDP refers to Filmon privatizing MTS or how the BC Liberals pointed out Dix backdating that memo.

6079_Smith_W

Speaking of all this, I just noticed for the second time on a trip to Manitoba that the price of gas is now higher there than in Saskatchewan cities - by 5 to 10 cents. This is a turnaround from as long as I can remember - decades - during which the opposite has always been true.

Has the province raised fuel taxes in the past six months? Is this orchestrated by the oil industry?  Whatever the case, it has turned my gassing up strategy completely on its head.

And really, the question of the right or left wing supporting the sales tax hike means nothing at all. This is going to hit consumers hardest, and small businesses who will be less able to weather the loss of business - either out of province, online, or to larger retailers who have better margins.

And with Grand Forks already taking a bite out of the retail market (and cross-border shoppers able to buy more, thanks to Harper), I have to wonder what the net effect of this is going to be.

 

Aristotleded24

There is talk about putting more of the fuel tax into infrastructure. When I was more involved in advocacy for rapid transit in Winnipeg, some of the discussion focused around the thought of Manitoba having one of the lowest fuel taxes around, and that this was time for it to change.

It's interesting you mention the difference between Saskatchewan and Manitoba. Apparently the numbers of people moving to Saskatchewan have hit highs in recent years. Traditionally, it's been the other way around, so with the commodities boom in Saskatchewan, it stands to reason that some of them would go home. It's along the same lines that several ex-pat Saskatchewanians and Manitobans came home years ago, driven by Alberta's high cost of living.

As for cross-border shopping, I wouldn't worry about it. When you take into account the amount of gas that has to be purchased, plus the fact that many people spend time overnight in the US, I really doubt that cross border shopping is as cheap as it's made out to be. With gas over $1.30/litre, I think that more than anything is going to take care of the issue of cross border shopping pretty quickly.

The Analyst The Analyst's picture

As hard as regressive sales taxes are on poorer consumers and business, let's not forget two facts.

1) The combined GST + PST was higher in the mid 2000s (true, the GST is rebated to low-income earners, though, while the PST isn't).

2) Manitoba small businesses had their business income taxes slashed to ZERO. There might be some room to absorb the extra burden. 

6079_Smith_W

Not all small businesses collecting PST are corporations. I suspect a large percentage pay only personal income tax.

And that cut? All the more reason why shifting the burden to this kind of a tax is that much more out of whack with progressive principles.

Saving a bit on tax does not substitute having the luxury of being able to buy by the truckload, as large businesses do, or the available finances to weather a serious downturn. And the problem is even more serious for buisnesses which have to balance tight margins and large inventories.

Besides, when many consumers see this hike, they aren't going to take the time to do their homework unless they are committed to buying small and local, or think about the real cost of buying cheap rather than paying for value. Many will just reflexively head to Price Choppers, Giant TIger and WalMart, or go online to Amazon.

(edit)

And one thing about GST is that businesses can deduct GST paid from what they collect and remit to the government. Essentially they only have to pay GST on their net profits, so a lot of the GST collected stays in pocket. I don't believe that is the case with the PST. It certainly isn't here in Saskatchewan, where businesses can only deduct the PST they pay on goods for resale, but not on operating or capital costs.

So it is not the same as it was before, even if the total sales tax was higher.