Ontario's Premier Dalton McGuinty likes the federal Conservative budget -- with the exception of the fundamental inequity that remains for Ontarians who need Employment Insurance.

"This prime minister has actually delivered. I'm not going to look this gift horse in the mouth," he told reporters Wednesday at Queen's Park.

"It's real, it's meaningful and it's coming here just in time," he said, noting Ontario has taken a "shellacking" in the manufacturing sector.

The government of Prime Minister Stephen Harper has proposed $12 billion in infrastructure spending for its 2009 budget. Seven billion dollars of that will be new cash.

In delivering his budget on Tuesday, Finance Minister and Whitby-Oshawa MP Jim Flaherty outlined some Ontario projects that will see federal money:

  • revitalizing Union Station in Toronto
  • rehabilitating cross-border bridges at Sarnia and Fort Erie
  • bridges  in Burlington and Kingston
  • bridges connecting the National Capital Region and Quebec
  • railway stations in Hamilton, Windsor and Belleville are to be improved
  • adding a third rail line in portions of the Toronto-Ottawa-Montreal corridor

Much of the spending will require matching funds from other levels of government. McGuinty, whose own government is predicting a deficit for this fiscal year, is okay with that.

"I think it's interesting to know that what the federal government did yesterday ... (is) they issued us a $5-billion-plus bill," he said. "Traditionally, that would have been met with resistance and resentment. But these are extraordinary times.

"We're going to have to find a way to come up with that money, that is necessarily going to increase the size of our deficit. But frankly, I don't think we have a choice, given the state of our economy," McGuinty said.

Consumer confidence is fragile in the province and many have already experienced the pain of job loss, he said.

McGuinty said the spending plan has delivered an economic development agency for southern Ontario -- a $1 billion investment over five years to help cope with the manufacturing job losses.

Progress has also been made in the areas of immigration and health transfers, but McGuinty said a fundamental inequity still exists within the Employment Insurance system for Ontario residents who lose their jobs compared to other Canadians.

Flaherty defends his budget

At the Whitby Chamber of Commerce on Wednesday, Flaherty called his budget an extraordinary one for extraordinary times.

Over five years, the deficit is expected to total about $85 billion, with a $34-billion deficit this year.

In his late November economic and fiscal update, Flaherty had predicted a $100-million surplus for fiscal 2008.

"I'm a fiscal conservative and it troubles me to run deficits," he said. "But having said that, this is what our country needs today."

Flaherty said the government is intent on not running long-term deficits as federal governments did from the 1970s through to the mid-1990s.

Ontario will get a "disproportionate" amount of money to help cushion the job losses suffered by the manufacturing sector in recent years, he said.

The stimulus package is a use-it-or-lose-it deal, he said.

"We are kick-starting the Canadian economy," Flaherty said.  "We have to do the stimulus right. We need to do it now."

With a report from CTV Toronto's Austin Delaney and files from The Canadian Press