Horwath slams Liberal 'half measure' on Ontario executive pay

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Ontario Finance Minister Dwight Duncan is open to taking a harder run at the pay of public-sector executives, but NDP leader Andrea Horwath declined to say whether the changes would be enough to win her party's support for the budget.

In an interview on Wednesday morning, Mr. Duncan said it's "fair" to assume that the pay of high-end officials such as hospital CEOs will be a topic of discussion in the days ahead, and that he'll be seeking "a little more detail as to what the NDP is looking for."

Speaking at a news conference on Wednesday, Ms. Horwath said, "The way the government addressed that in the budget is a half measure at best. That is not real restraint on the top executives."

She criticized the Liberals for engaging in "my way or the highway" politics and not taking the time to have a "serious conversation" with opposition leaders before crafting the budget. The document was already printed, she said, by the time Liberal officials met with her caucus.

But Ms. Horwath reiterated that it won't be up to her or her caucus to decide whether the minority Liberal government survives or whether Ontarians are going back to the polls. The NDP has set up a website and toll-free number (1-855-668-2348), inviting the public to have their say on the budget.

Also on Wednesday, Ontario Premier Dalton McGuinty signalled he was open to opposition suggestions.

Speaking to reporters, he urged the opposition not to indulge in brinksmanship in the minority legislature. He did not say where he might be flexible, though, and indicated he would compromise only so far.

Mr. McGuinty suggested that the budget reflected elements of the opposition's positions. He was firm that he would not accept amendments that would undercut his government's attempts to reduce the deficit, protect health care and education and grow the economy.

With a minority government, the Liberals need opposition support or abstentions to pass the budget, otherwise the province will be plunged into another election, only five months after it last voted.

"I would certainly be proud to campaign on our budget and our five-year plan, and I would certainly seek a majority, in order for us to be able to get the job done," Mr. McGuinty said. "But I remain very hopeful that it does not come to that."

Tuesday's budget, devoted mostly to cost-cutting as the province tries to find its way out of a $15.3-billion deficit, promised to continue a freeze on executive pay. But it did not go nearly as far as the NDP has previously demanded, which would include capping public-sector salaries at double that of the Premier.

Mr. Duncan sounded lukewarm on that proposal, calling it "enormously complicated" and questioning whether the people running enormous hospitals just as Sick Kids should be limited to the same salaries as those running smaller rural ones.

Nevertheless, the Finance Minister struck a decidedly conciliatory tone toward the New Democrats. "I don't want to sound dismissive, because I think they're genuine in their view," he said. "There are a lot of compensation issues that rankle us, too."

As for further concessions, Mr. Duncan reiterated that any spending cuts removed from his budget would have to be replaced by others.

"The government hangs in the balance," Ms. Horwath said. "New Democrats will not play political games with this budget. We want to know how prepared people are to go to an election over this budget."

Ms. Horwath said it could take as long as two weeks before her party gathers enough feedback on the budget. She said the government's blueprint for digging itself out of deficit falls short in several areas. It has nothing, she said, that addresses job creation strategies for laid off workers.

Ms. Horwath also repeated that she is deeply uncomfortable with the Liberals' sharp policy reversal on wages for public sector workers who bargain collectively. The budget warns that the government could impose wage freezes through legislation if teachers, doctors and other public sector workers do not voluntarily agree to accept no increases.

"The government decided to put the gun to the head of the people who make this province work day in and day out in our hospitals and in our schools," Ms. Horwath said.

With the Progressive Conservatives having vowed to vote against the budget, NDP support - or at least abstentions by a couple of its members - will likely be required to prevent the government from falling.

Given that his budget was largely aimed at appeasing markets and credit raters nervous about Ontario's mounting debt, Mr. Duncan expressed concern about the impact of political volatility in the weeks ahead.

"I remind people that when Standard and Poor's downgraded the U.S. last year, it wasn't because of their debt situation," he said. "It was because of their inability politically to deal with it."