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A government led by Theresa Oswald would immediately introduce a PST rebate of up to $125 annually for low-income earners.
The NDP said Monday her government didn't consider the effect of an eight per cent sales tax on low-income families when it imposed a one-percentage-point increase in 2013.
Her proposed rebate would help "offset" the $75 to $125 low-income families pay each year because of the increase.
"We have an opportunity now to fix errors that were made and endeavour to get it right," she said, adding the rebate would likely affect about 150,000 Manitobans earning about $35,000 or less per year.
The treasury would lose $10 million to $15 million a year, she said.
Oswald also said Monday she would kill any pretense the government can eliminate the deficit by the spring of 2016 -- a date set by Premier Greg Selinger -- without gutting health care and education and "stopping in its tracks" Manitoba's infrastructure-renewal plan.
"I wouldn't want you to leave here today saying that I couldn't care less about balancing the budget because that's not true," the former jobs and the economy minister said. "I think it's really important to balance the budget, but I believe in true balance, and a single-minded focus on an arbitrary date in coming back into balance... is not true balance."
Oswald quit cabinet Nov. 3 along with four other ministers, demanding Selinger quit as party leader. They said they wanted to turn around the NDP's sagging fortunes in time for the 2016 election. The leadership vote is March 8.
Oswald said if she becomes premier, she would move toward a plan to significantly lower the deficit each year while recognizing unforeseen flooding or lower federal transfer payments affect the bottom line.
A recent finance report predicted the government will see a deficit of $402 million this fiscal year, up $45 million from its initial projection last spring. The government has run deficit budgets since 2009-10.
"Absolutely we want to come back into a balance and come into (budget) surplus," Oswald said.
"Today is putting a marker out there that I believe coming back into balance on the 2016 date Premier Selinger is focused on, fixated on it one would say, is dangerous," she said, adding it would take cuts of $200 million in each of the next two budgets.
Oswald said her proposed PST rebate would correct the way Selinger introduced the increase.
She said the tax hike was brought in without consultation and despite Selinger promising in 2011 he wouldn't raise it.
Oswald called on Selinger to apologize. Selinger has, on at least two occasions, said he takes responsibility for how some Manitobans were surprised by the tax increase.
Meantime, he has said he's going to fight for his job but as of Monday had yet to file his nomination papers.
Oswald criticized fellow leadership candidate Steve Ashton for his promise to allow Manitobans to vote in a referendum to keep the PST increase or lower it back to seven per cent. Ashton resigned his cabinet post to run for leader.
She said Ashton stole a page from Progressive Conservative Leader Brian Pallister's playbook and isn't a proper form of public consultation.
She said infrastructure projects -- the Headingley bypass and a new bridge at Highway 75 in Morris -- would be jeopardized should the increase be repealed.
"I think it's a really reckless thing to do at this stage of the game," she said.
bruce.owen@freepress.mb.ca