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Pallister's pricey political theatre won't pay off for anyone

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PC Leader Brian Pallister is making a big deal of taking the NDP to court over their decision to raise the provincial sales tax by one percentage point.

As political theatre goes, Pallister's PST case likely comes with a hefty price tag for taxpayers.

Aside from the cost of the judge and clerks and the government lawyers defending the NDP, even the PC party's lawyers' fees are being subsidized, since they are being paid by PC party donations, which are eligible for a 75 per cent tax rebate.

All this for a case Pallister is likely to lose.

Was it wrong to raise the PST? Yes. It broke an election promise, and it's a regressive tax as it hits low-income earners and small businesses harder than people with high incomes or big corporations.

But did the NDP break Manitoba's balanced-budget law by not holding a referendum? Probably not. Changing laws is, after all, what we elect MLAs and MPs to do.

In a similar case, the Federal Court of Appeal found the Harper government did not have to follow a law requiring a referendum before stripping the Canadian Wheat Board of its single desk. Mr. Pallister was conspicuously silent about that.

Manitoba's never-enforced balanced-budget law promised a referendum would be required to hike any of three taxes: income taxes, the PST or the health and education levy.

Not to be outdone, the NDP cut and pasted the same referendum requirement into a law to stop future governments from privatizing Manitoba Hydro.

There is good reason to believe neither the NDP or the PCs were ever serious about following through with a public vote, because in all the years both parties have been in power, neither ever bothered to pass referendum legislation.

Manitoba has no specific rules on referendum ballot questions, financing, advertising or minimum turnout: Other provinces do.

A snap referendum on the PST would be an expensive, unenforceable, disorganized opinion poll.

If Brian Pallister loses his case, the bad news for Manitobans will be that if the NDP wants to raise taxes without a referendum, they can. If the PCs want to sell off Manitoba Hydro, they can, too.

Even if Pallister wins, it's still impossible to have a referendum, since there are no rules in place.

Pallister and his caucus could have done something about that, by introducing legislation to make a referendum possible. They had plenty of time to do it last year in the legislature, but instead the PCs took a page from the U.S. Tea Party and decided to be obstructionist. They kept the legislature open all summer while deliberately accomplishing nothing, at a cost of tens of thousands of taxpayers' dollars a day.

If the court throws out the referendum requirement, many Manitobans may feel cheated of the right to vote in a referendum, or feel powerless in the face of a government making unpopular decisions.

They shouldn't. The promise -- or threat -- of a referendum was never about "direct democracy," it was always about each party trying to make their policies permanent, even after they lost an election, by stripping the next democratically elected government of the ability to make important decisions.

The balanced-budget bill in particular was designed to "ratchet" down taxes by making them easy to cut and nearly impossible to raise. In the words of U.S. anti-tax activist Grover Norquist, "The intention is not to eliminate government, just shrink it to the point it could be drowned in a bathtub."

Contrary to popular belief, governments of all stripes in Canada have delivered tax cuts -- some substantial. The Selinger NDP likes to boast they have cut $1 billion in taxes, the Harper Conservatives $30 billion. Has it paid off? For each dollar they cut, they borrowed and spent five: The NDP has added more than $5 billion in debt, the Conservatives more than $150 billion.

Is the average Manitoban or Canadian better off? Some of the cuts have been substantial, but mostly to progressive taxes, so the benefits of those tax cuts have gone mostly to top earners and corporations, while everyone sees little benefit and their gains are wiped out by hikes in user fees.

It might seem undemocratic for courts to toss out referendum laws, but it really puts the power -- and responsibility for important decisions -- back where it is supposed to be: with MLAs and the government of the day. If a referendum result creates a financial fiasco, no one is held to account.

Manitobans may not like it, but politicians may like it even less. They might actually have to make tough decisions, and -- what's worse for them -- to answer for it at the polls. That would be a welcome change from the current levels of evasion.


Dougald Lamont is a writer and communications consultant in Winnipeg. He was runner-up in last year's vote for the leadership of the Manitoba Liberal Party.

Republished from the Winnipeg Free Press print edition July 17, 2014 A13

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