TORONTO - Ontario's Liberal government will open talks with nurses, teachers and civil servants on ways to eliminate the province's record $25 billion deficit, Premier Dalton McGuinty said Wednesday as he refused to rule out unpaid days off for public sector workers.

Former NDP premier Bob Rae had proposed a similar strategy to deal with a deficit in the early 1990s, which the unions condemned as "Rae Days."

McGuinty joked at the Ontario Economic Summit in Niagara-on-the-Lake that he liked the sound of "Dalton Days."

"I like the alliteration," he told the business audience.

"We're going to have to sit down with our public sector partners, both those who work in the immediate government and our broader public sector, and see what our responsibility is."

McGuinty defended the government's decision to go deep into the red to counter the impact of the economic downturn, something he said public sector workers had been "sheltered" from until now.

"By and large it's been a private sector recession, not a public sector recession," he said.

"We all understand that, and I think that's one of the reasons why we're going to want to make sure we do our share when it comes to finding more efficiencies in government."

The public sector has a duty to help eliminate the deficit, said McGuinty, but the government won't implement any plan to deal with the shortfall - such as "Dalton Days" or pay cuts - without consulting the workers who would be affected.

"I think what's important is to begin this conversation with our partners - and that's how we've treated them from the outset, whether you're talking about our teachers, our nurses, those people in the various ministries, water inspectors, our meat inspectors - we're all in this together," he said.

"I think we all feel a sense of responsibility to find a way to make our government more streamlined."

Any strategy for eliminating the red ink won't be announced before next spring's provincial budget, added McGuinty.

"There's no quick fix, and there's no easy way out of this," he said.

The premier also launched into a spirited defence of his plan to harmonize the eight per cent provincial sales tax with the five per cent GST starting next summer. He said he understood the HST was controversial but was convinced it would help the economy grow.

"I know the HST is controversial and I can understand why Ontarians on an individual basis have some reservations," he said.

"But I want all of us to understand that we're doing this for good reason: to strengthen the economy so we'll have the continuing capacity to create jobs for our kids and our grandchildren and to support our schools, hospitals and environmental protections."

The government also released a report by Jack Mintz of the School of Public Policy at the University of Calgary, who said harmonizing the sales taxes combined with corporate and income tax cuts will help create an estimated 591,000 new jobs over 10 years.

It would also lead to an additional 8.8 per cent increase in annual incomes and boost capital investment in Ontario by $47 billion in a decade.

"It's not just that you're going to create more jobs, but because of the significant capital investment that's induced by these tax changes, it will allow businesses to invest in capital with the latest technologies and allow people to get higher incomes as a result, said Mintz.

Securing an additional $47 billion in investment is equal to getting five new car assembly plants every year for the next 10 years, said McGuinty.

"Remember how excited we all were when we landed the new Toyota investment? That was $1 billion."