Winnipeg Free Press - PRINT EDITION

NDP's spending chickens coming home to roost

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Brian Pallister and his provincial Tories are half-right. They are making a legitimate case against the NDP government move to increase the sales tax by one percentage point, an increase that is required simply because government spending has spun out of control.

They are wrong to oppose the government doing so without a referendum or plebiscite, thus requiring a repeal of the balanced-budget legislation, which the Conservatives enacted by in the 1990s. The requirement of a referendum to increase taxes was ill-conceived in the first place and I publicly stated so at the time.

It is contrary to the principle of responsible government. Government is mostly about spending on the one hand and raising revenues on the other. If a government does not have the power to raise revenues to finance its programs, it cannot govern. The Tory government legislation requiring a referendum was a blatant piece of window dressing that was doomed to failure.

The Conservatives would have repealed it when the necessity presented itself. The fact it is the NDP that has to bite the bullet simply adds to the political confusion, which is the inevitable result of this type of legislation.

Legislation requiring public approval for the raising of government revenue is without precedent on the national and provincial levels. It did exist for many years at the municipal level. Until the 1950s, the City of Winnipeg had to obtain the approval of property owners who were taxpayers to undertake certain capital projects. It is a tribute to the taxpayers of Winnipeg that most of these money bylaws were approved.

It is not axiomatic that taxpayers will automatically disapprove of any tax increases. When the taxpayer sees a benefit being obtained from a government program they will say "yes" to the tax increase.

The best example is the increase in sales tax, which the Tommy Douglas government introduced to finance the universal hospitalization program in Saskatchewan. The people of Saskatchewan saw the value of the program and resoundingly re-elected the Douglas government, thereby approving the sales-tax increase.

But the Tory opposition to the sales tax is 100 per cent legitimate. This is a 14 per cent increase in the tax rate. It is not needed because the government has introduced a new initiative. It is needed because of mismanagement of provincial finances. The government has simply run out of rope in its adventures of overspending without equivalent revenues.

And it's not as if the government hasn't done its share of increasing taxes over the years despite its protestations that it has maintained the tax levels. Historically, governments have used various devices to pick the pockets of its citizens while claiming taxes have not increased. In days of yore, the king would clip the edges of gold coins that came into the treasury and then pay his bills with debased currency. As the saying goes, "There are many ways to skin a cat," and the NDP has employed all of them and invented some of its own.

Before they raised the sales tax, they made it apply to additional items previously not included. The most egregious of the new "services" subject to taxation are fire and life insurance policies. Why is someone subjected to a tax because one buys a life insurance policy to protect one's spouse? Virtually everyone has to pay the tax on fire insurance whether one owns a property or is a tenant and the amount of this new tax is substantial and may in itself be the equivalent to the taxpayer of one per cent of sales tax.

While claiming to maintain tax levels, the NDP has used land transfer fees, government fees of various kinds, "sin taxes," lottery revenues and other devices to obtain revenues to try, unsuccessfully as it turns out, to match its spiralling and uncontrolled expenditures.

They appear to have gotten away with it in the last provincial election. The increase in the sales tax may just be the straw that broke the camel's back, or to put it another way, the chickens may be coming home to roost.

The NDP seems to be making Pallister's point.

 

Sidney Green is a Winnipeg lawyer and former NDP cabinet minister.

Republished from the Winnipeg Free Press print edition May 3, 2013 A9

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