A Liberal staffer has offered her resignation after an audio recording surfaced of her claiming she had once bribed homeless voters with cigarettes. The staffer said the comment was a joke.

Nikki Holland, gave notice Friday afternoon to the Liberal party's president Yasir Naqvi.

In statement from the Ottawa Centre MPP, Naqvi said Holland "informed me that she did not want to be a distraction to the positive campaign we are running. Ms. Holland has apologized for the inappropriate jokes she made this past summer."

"With her resignation, I now consider the matter closed," the statement said.

Holland made the comments during a training session in July.

Earlier, Premier Dalton McGuinty was doing damage control on the Ontario campaign trail as opponents slammed him over Holland's comments.

McGuinty quickly jumped on the grenade, calling it a completely inappropriate joke during a campaign stop at a Brampton, Ont., Chrysler plant.

"Completely unacceptable comment on the part of my worker. It was a bad joke in poor taste and she apologized for it," he told reporters.

McGuinty went on to outline tough anti-smoking legislation his government had enacted, which he says is responsible for reducing smoking in the province by 25 per cent. The Liberal Party platform includes plans to further increase fines against stores that sell cigarettes to minors.

Hudak wasn't laughing in Ajax, however, saying there wasn't anything funny about the vote-buying allegations.

"That is a violation of the law," the Conservative leader told reporters. "The question for Dalton McGuinty is, does he condone this behaviour and what is he going to do about it. If this happened on my campaign, that person would be out the door."

Ontario NDP Leader Andrea Horwath was also blasting the comments, saying it was a problem McGuinty needed to deal with.

"It's a problem that's happening in his organization and it's up to him to discuss with his own people whether or not this is appropriate," she told reporters.

NDP attack doctors' salary freeze

Horwath was at Queen's Park on Friday, attacking a Liberal plan to freeze doctors' salaries when their contract expires next year.

McGuinty has asked Ontario doctors to take a two-year pay freeze in March, despite the fact that nurses and other health-care workers have recently won the right to wage increases.

Horwath said she was surprised by the Liberal's stance, which would mean that "some people get more frozen than others."

Horwath said she would rather freeze the salaries of top hospital executives than front-line workers.

Flaherty endorses Hudak

In Toronto, Federal Finance Minister Jim Flaherty championed Ontario Progressive Conservative Leader Tim Hudak on Friday during a speech he made at a luncheon hosted in Toronto.

Flaherty, a former Mike Harris cabinet minister, spoke about the dangers of ignoring the province's $14-billion deficit, saying Ontario "can't afford four more years of the same Dalton McGuinty government."

"As you know, we have a challenging situation in Europe and weakness in the U.S. economy and deficits and debt," Flaherty said. "Our country needs Ontario to get back on the right track."

Following a speech from Hudak who was also in attendance, Flaherty also took the opportunity to endorse his wife, Christine Elliott who is running for the Ontario Tories in Whitby-Oshawa.

"It won't surprise you that I received some guidance at home this morning over breakfast on what I might say," Flaherty said.