TORONTO - The recession and the environment will dominate the spring session of the Ontario legislature that starts Tuesday, as the Liberal government prepares to bring in a deficit budget and a Green Energy Act that it hopes will transform the province's ailing economy and create 50,000 new jobs.

The impact of the economic crisis on jobs -- more than 71,000 were lost in Ontario last month alone -- and on government revenues means the Liberals have a major challenge in preparing a budget that will include a multi-billion dollar deficit and efforts to stimulate the economy.

Premier Dalton McGuinty has warned the province will not tolerate objections to the creation of green energy projects such as wind turbines and solar panel farms as he looks to put idled manufacturing plants back on line to create jobs.

"We cannot allow small groups and individual municipalities to stand in the way of our greater public interest in good jobs, cleaner electricity and assuming our responsibility in the face of climate change," he said.

"What I'm pursing here is an agenda that will take several budgets to implement. It'll take a long time to turn this around."

While the government struggles with massive job losses and dramatically decreased revenues, the Conservatives face a crucial byelection March 5 as leader John Tory seeks a seat in the legislature, and the New Democrats will hold a leadership convention March 7.

Tory will be campaigning full time in Haliburton-Kawartha Lakes-Brock near Peterborough as the legislature resumes, but said the Opposition will be questioning the government on the recession and job losses.

"We're going to be focused on the economy and the continued inaction of Mr. McGuinty's government," said Tory.

"Where is the budget? Why is Ontario the only place yet that hasn't brought in any policies to deal with what is a catastrophic crisis that is facing thousands of people in the province?"

Outgoing NDP Leader Howard Hampton intends to hold the Liberals to account for what he says is their failure to protect jobs, and will push McGuinty to provide more help for cities that are struggling with record unemployment levels and soaring applications for welfare.

"That is happening in community after community and this session is going to be about the fact the McGuinty government has no plan now and never did have a plan," said Hampton.

"They're now trying to offer up a Green Energy Act and saying it's going to create jobs, (but) it's completely without foundation."

Hampton said the New Democrats will also be pushing for an industrial hydro rate to help struggling manufacturers and forestry companies compete with other jurisdictions and to prevent more closures and job losses.

McGuinty has been talking about the need to transform Ontario into a knowledge-based economy and to greatly increase the number of

people who not only go to college or university, but also go on to post-graduate studies.

Hampton questions the premier's logic, especially following the nearly three-month long strike by teaching assistants at York University, which ended only after McGuinty called a special session of the legislature in January to order the workers back on the job.

"The very people who were on the picket lines were all knowledge workers, people with masters degrees and PhDs who were being paid poverty wages," said Hampton.

"The premier says everybody should get a graduate degree. For what? To be paid poverty wages as they are at York University."

The Liberals had promised to tackle poverty in their second term, but McGuinty has already warned he won't be able to go as far or as fast as first planned because of the economic crisis, despite pleas from social groups that this is the wrong time to be short-changing the poor.

The government also plans to introduce its long-promised update of Ontario's Mining Act this spring with changes that a Liberal source said "supports investment in this industry but also respects the input of the Aboriginal community."