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Manitoba looked at larger tax increase

2014-04-07 16:52:44


The Canadian Press has learned that the Manitoba government analyzed a higher sales tax increase than the one it brought in last year -a revelation that contradicts what the finance minister told the news agency last fall.

A report by the provincial ombudsman's office shows that the Finance Department prepared two documents that analyzed revenue options that included a nine per cent retail sales tax before settling on eight per cent - an increase of one per cent.

"The department indicated that the records that exist . . . do include a reference to a nine per cent RST solely in the context of providing comparators, which is a common practice in financial research and analysis.''

The Canadian Press asked then-finance minister Stan Struthers in an interview last October whether he ever dealt with, or saw, briefing notes or other documents that mentioned a nine per cent sales tax.

"No, that was not something that we considered, because we knew that the one-cent on the dollar would get us the revenue that we need to participate with Ottawa in building infrastructure (under a cost-shared program),'' Struthers said at the time.

"Nothing other than eight per cent was ever tabled, discussed, written down anywhere?'' Struthers was asked.

"Yeah, once you knew what you needed to get to match Ottawa - we knew that the one-cent on the dollar increase matched up with that - that's basically where it ended.''

Struthers was named minister for municipal government and Manitoba Hydro in a cabinet shuffle shortly afterwards.

The news agency filed a freedom-of-information request for any documents discussing the possibility of a nine per cent sales tax.

The two documents that mention the tax are being kept secret under a section of the Freedom of Information and Protection of Privacy Act that forbids papers prepared for cabinet from being made public. That means Struthers, and perhaps other cabinet ministers, would have seen them.

The news agency filed an appeal with the ombudsman, who reported that the Finance Department analyzed the impact of a nine per cent tax, but did not recommend it.

"In the (department's) opinion, these records do not indicate that a nine per cent RST was possible, but rather include 'comparators' in order that decision-makers may have a comprehensive and detailed examination of revenue adjustments,'' the ombudsman's report reads

"The (department) explained that undertaking this analysis does not mean that a particular revenue adjustment is being recommended or considered by the government and that it is common practice to include 'comparators' when conducting analyses.''

The ombudsman's office upheld the Finance Department's decision to withhold the documents under the freedom-of-information law.

The Opposition accused the government Monday of misleading the media and the public.

"How could Manitobans arrive at any other conclusion other than the (former) finance minister lied?'' Progressive Conservative member Cameron Friesen said in the legislature.

A request for an interview with Struthers was not granted and reporters were pointed to current Finance Minister Jennifer Howard.

Howard would not comment on why Struthers denied the existence of the documents about a nine per cent sales tax. She said the important thing is the government never gave the higher rate serious consideration.

"That somewhere in the world somebody could do a mathematical calculation - and I would expect people in the Finance Department to be able to do that kind of arithmetic - I don't understand why people would think that is the same thing as ... considering to make a decision.''


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