Increasing the PST from 7% to 8% without listening to Manitobans in a referendum cost the NDP the 2016 election.
Greg Selinger’s trust numbers and his party’s standing in the polls collapsed and never recovered.
Does this mean the PST increase itself was a bad idea?
In fact, polls taken at the time of the increase showed that many Manitobans supported increasing the PST – on the condition that it went to fixing our failing infrastructure.
Had a strong and honest case for the increase been presented, and had Manitobans been given a vote, the increase may have been approved.
As we know, that’s not what happened.
The government at the time passed it without a referendum and struggled for a year to explain where the money would go. By the time they honed their infrastructure spending message, they had lost the trust of the public.
As a result, a new government was elected pledging to cut the PST, sustain infrastructure spending, lower deficits, improve services, and lower additional taxes, all at the same time.
That brings us to where we are today.
We know that Manitoba is facing serious challenges. Not just in the north which is being damaged by job losses, but across the province. The middle class is stuck, while poverty and crime remain at high levels.
Since the government is highly unlikely to bring in a guaranteed income – which I think is the real solution to our underlying economic and social problems – they will have to pick from the usual policy toolkit.
To make good on their promise of better services, lower taxes, and lower deficits, the government will need strong and sustained economic growth. But with the global economy facing significant challenges and growth expected to be slow for some time, tough choices will have to be made.
That’s why the PST cut should go to a referendum.
When they were in opposition, the current government was very supportive of giving Manitobans the chance to vote in a referendum.
After all, if a referendum on a large tax increase is a good idea, a referendum on a large tax cut is a good idea as well. The underlying theme is giving Manitobans a direct say on an issue that impacts all of us.
A PST cut would mean a loss of $300 million in revenue at a time when we face large budget deficits and credit rating warnings. At the same time, putting $300 million back in the people’s hands could stimulate the economy.
It’s a tough choice, which is why it should be put to a referendum.
Some might say that since the PCs claimed they would cut the PST if they won, they don’t have to hold a referendum.
That’s absolutely correct from a legal standpoint. But from a moral standpoint, Manitobans deserve a chance to vote on whether the PST stays at 8% or goes back to 7%.
A few days before the provincial election, a poll showed that 48% of Manitobans want the PST to stay at the current level, while 44% want it to be cut. Even 40% of PC voters wanted to keep the PST at 8%, which means tens of thousands of Manitobans who supported the PST increase also voted for the PC party.
Of course, since the PCs promised to cut the PST, the only way to justify keeping it at 8% would be if Manitobans voted in a referendum. Then, instead of breaking a promise, the government would be listening to the people, and showing a commitment to democracy.
Alternatively, if Manitobans voted to cut the PST, the public would be more understanding of long term budget deficits and reduced spending.
A referendum would allow Manitoba to have a real conversation on the relationship between taxation, services, and the future of the provincial budget.
Manitobans on both sides of the issue would respect the new government for showing more trust in the people.
A referendum would also be a recognition that democracy is about more than just voting two or three times each decade.
We need more democracy, not less, because political parties in their current form are not much more than elected dictatorships for party leaders, which means there is surprisingly little democracy within them.
Politics and governance shouldn’t be about a small elite making decisions behind closed doors. The more you think about, the more obvious it is that talk about democracy and openness doesn’t mean anything if it’s not backed up by real citizen participation on a regular and ongoing basis.
Imagine how people would feel about their elected leaders if the government was actually willing to listen to and respect the decision of the people on a big issue. Imagine how confidence in the system would be strengthened.
That’s why it’s time to give Manitobans the PST referendum we were wrongly denied.