TORONTO - Ottawa needs to move past its "tax cut slogans'' in Tuesday's budget if it wants to win the support of voters in Canada's largest province and help kick-start Ontario's struggling economy, Premier Dalton McGuinty said Monday.
Ontario generates 40 per cent of the country's wealth, but could do even more if the federal Conservative government were to work together with the province, McGuinty said in a Toronto speech to municipal officials.
But that doesn't mean the province will be following federal Finance Minister Jim Flaherty's advice by giving tax breaks to businesses in order to stimulate economic growth.
"Tax cuts aren't magic. There's no magic to be found anywhere when it comes to building a strong economy,'' McGuinty said.
"It takes hard work and it takes thoughtfulness.''
The warning was just the latest salvo in the province's war of words with the federal Tories over Ontario's struggling economy -- a fight that degenerated into name-calling and insults last week between Flaherty and provincial Economic Development Minister Sandra Pupatello.
Pupatello called Flaherty, a former Ontario finance minister, a "cartoon character'' and accused him of ''bald-faced lies'' after he criticized the provincial Liberals for lacking leadership when it came to dealing with the province's economic problems.
The ugly exchange conjured memories of old battles between the provincial Liberals and Ontario's former Conservative government, some veterans of which were hand-picked by Prime Minister Stephen Harper following his election victory in 2006.
"Tax cuts create jobs'' was the defining economic philosophy of the Ontario Conservatives during the tenure of former premier Mike Harris, who was elected at the expense of the Liberals in 1995 and again in 1999, and his successor, former finance minister Ernie Eves.
McGuinty's Liberals were first elected in 2003, then again last year.
Hard times in Ontario, highlighted by major job losses in the manufacturing sector, have re-opened those old divides, particularly over how best to stimulate economic growth. Flaherty is pushing for tax cuts while McGuinty is asking for government help to hard-hit manufacturers.
On Monday, McGuinty repeated his demands that Ottawa partner with the province in providing direct help to beleaguered Ontario businesses and address inequalities in employment insurance, which he says provides fewer benefits to Ontario workers than others elsewhere in the country.
"We no longer enjoy the luxury -- assuming we ever did -- of infighting, bickering, and working at cross-purposes,'' McGuinty said.
"It is absolutely essential that we combine our strengths and harness this power of shared purpose.''
McGuinty also announced Monday that Ontario municipalities would receive an additional $150 million to help build and repair roads, bridges and other public infrastructure.
The money, which McGuinty said will create 6,700 construction jobs, will be added to a $300-million municipal infrastructure fund the provincial Liberals launched in 2007.
