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The Canadian Press - ONLINE EDITION

Opposition parties warn Liberals will hike taxes or cut jobs to balance budget

TORONTO - Ontario's Liberals may have won a majority June 12, but they have no plan to eliminate a $12.5 billion deficit without cutting jobs or raising taxes, the opposition parties charged Monday.

In the first question period of the summer session, the Tories and NDP pounced on last week's decision by Moody's to lower Ontario's credit outlook to negative while expressing concerns about the province's ability to balance the books by 2017-18.

Both opposition parties said the Liberals have limited options to stem the flow of red ink on schedule: hike taxes, cut jobs or sell assets, but instead plan billions of dollars in new spending.

"This government spending spree will dig us into such a deep hole that some day we won't be able to afford the basic things we all care about, like health care and education," said interim Progressive Conservative Leader Jim Wilson.

"Premier, just be honest ... what other front-line services are you going to cut or what taxes are you going to increase?"

NDP Leader Andrea Horwath said "economists are telling people to brace for the worst" because there are big holes in the Liberal budget that have not been explained.

"Does the premier accept that anyone who has taken a look at the numbers behind the Liberal plan sees that there is a major gap," asked Horwath.

"When is the premier going to level with Ontarians about the cuts, the layoffs and the asset sales that they can expect to see from this government's Trojan horse budget?"

Premier Kathleen Wynne defended the Liberal plan to increase spending on public transit, infrastructure projects and corporate grants, and took exception to Horwath's claim that the Liberals have a "huge credibility gap" in their budget.

"She based her plan on exactly the same fiscal foundation as we did, (and) for her to stand up now and to distance herself from that is ridiculous," said Wynne.

"The fact is we know that there are challenges ahead, but we also know that we must make the investments that are necessary in order to build this province up and to help this economy grow."

Outside the legislature, Horwath told reporters the NDP campaign platform had key proposals to increase tax revenues that the Liberals did not include in their plan.

"We clearly talked about closing those huge corporate tax loopholes that are coming next year, and we talked about a slight up tick in the corporate tax rate," she said.

Wynne "dodged" questions about how many jobs the Liberals would have to be cut to eliminate the deficit or what government assets would be sold, added Horwath.

"I'm quite shocked that the premier didn't clearly set out a response that gives people relief over their concerns about those issues," she said.

"Ontarians need to hear from the premier what her intentions are to be able to get to that balanced budget."

Wilson complained that Wynne's refusal to give clear answers on how the books will be balanced was more of "the same Liberal arrogance that we've had for 11 years," and called on the premier to "be straightforward" with the public.

"When most of every dollar spent in government is on salaries and benefits, you can't possibly balance the books without affecting people and their jobs," he said.

"We worried that they're not setting priorities, and are going on a spatter-across-the-board spending spree."

The rare summer session began on a positive note, with all three party leaders congratulating each other and all members who were re-elected last month.

"Premier, congratulations to you and your government," said Wilson. "And best wishes, but not too many best wishes."

The three parties are also fighting over the make up of legislative committees, with the Liberals demanding six of the nine seats on each committee but the Tories and NDP say the government should get only five seats.

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