Wynne’s budget aims to boost Ontario economy, Liberals’ fortunes

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Ontario Premier Kathleen Wynne has tabled a budget aimed at giving her time to improve the sagging fortunes of her party and the province's sputtering economy.

The $127.6-billion plan walks a fine line between gradually bringing down Ontario's deficit – projected at $11.7-billion this year – while implementing the Liberal Leader's "fair society" package of social legislation.

The budget, the first major test of Ms. Wynne's three-month-old administration, is headlined by a 15-per-cent cut to auto-insurance rates, more money for home care and changes to corporate-tax credits that favour smaller businesses – all measures designed to maintain the support of the NDP, whose backing she needs to continue governing.

But absent tough austerity measures, some of the most serious action required to achieve the province's goal of eliminating the deficit by fiscal year 2017-18 have been put off to another day: Reining in health and education spending and dealing with government pensions would have proved risky for a minority government with a fragile grip on power.

Much of the fiscal good news touted in the budget was a result of tough measures – such as imposing contracts on teachers – taken last year. Save for a pledge to freeze civil servants' pay until the budget is balanced, Finance Minister Charles Sousa's plan offers little detail on how spending will be contained in future.

"Building a strong economy that creates jobs does not have to come at the expense of those more vulnerable who need help," Mr. Sousa said.

NDP Leader Andrea Horwath was non-committal Thursday, saying she would take time to consult before deciding whether to allow the government to live. "We want to make this budget accountable and we're going to listen to Ontarians in terms of how to achieve that," she said.

But Ms. Horwath is under intense pressure: While some NDP members believe her personal popularity would translate into gains at the polls, others want to avoid an election. The trade unions that provide some of the NDP's most stalwart support fear a vote could put the Progressive Conservatives, who want to slash spending, lay off public-sector workers and impose union-busting legislation, in office.

"We don't want to gamble that we pull down a left-of-centre Premier and end up getting a right-wing ideologue in her place," Ontario Federation of Labour president Sid Ryan said. "That would not be good for labour."

The NDP is expected to spend the next several days gauging popular support for the budget. Ms. Horwath, who wants to add unspecified "accountability" measures to the budget to ensure the NDP-friendly pledges are followed through on, could choose to negotiate with the Liberals in different ways. Either her staffers could meet with Ms. Wynne's or her finance critic could sit down with Mr. Sousa. The NDP and Liberal house leaders are also in regular contact.

While the budget does not introduce many major spending initiatives, it still contains several policies that should please left-wing voters. The plan pledges $700-million over three years for home care; offers First Nations help with housing, education and policing; sets aside dollars for adults with disabilities and boosts legal aid.

The budget also contains measures geared toward stimulating the economy, with four programs to help young people find work, a tax break for small business and a program to help industrial enterprises buy new equipment.

The government also reiterated its plan to forge ahead with an extensive infrastructure-building program. Roads and bridges will be constructed in rural areas, while the Toronto area would see new subways and light rail lines. The increased public transportation is deemed vitally necessary by the business community, which contends that gridlock is stifling economic growth. The new transit lines will be paid for in part by tolls on some lanes of traffic.