TORONTO - Ontario delivered a garrison budget Tuesday designed to paint the governing Liberals as white knights defending vital public services against the threat of penny-pinching Conservatives and "job killing" New Democrats ahead of a fall election.
Finance Minister Dwight Duncan circled the wagons around education and health care in his $113.8-billion spending plan, taking a few stabs at curbing double-digit deficits that will see Ontario submerged in red ink longer and deeper than any other province.
But if the Liberals were planning to ply voters with a few goodies ahead of the Oct. 6 vote, they weren't in this budget.
There wasn't a single new tax cut or credit to be found, just a smattering of strategic investments that will provide insurance for more farmers, expand breast cancer screenings for women and add new college and university spaces.
By contrast, environmental spending was cut by $12 million and the economically ravaged north was barely mentioned.
With 68 cents on every dollar spent on education and health care -- and another $10.3 billion a year to service Ontario's massive debt -- Duncan didn't have much cash to play with.
Instead, he painted the Liberals as prudent fiscal managers who are slowly whittling down the deficit, while protecting services from deep cuts their more popular political opponents would make.
"The choice could be made to slash benefits for our low-income people, let our infrastructure age and allow our universities and colleges to fall into disrepair," he told the legislature.
"But we reject those choices," he said. "We know from past experience that across-the-board cuts do not work."
Duncan also pointed out that both Alberta and Ottawa have delayed their deficit-slaying plans.
It's not a major concern as long as Ontario doesn't prolong it any further, said TD Bank economist Sonya Gulati.
"But certainly Ontario is in the worst fiscal shape across Canada," she said. "And that's at the provincial level and federal level, in terms of its deficit."
Opposition Leader Tim Hudak has provided few clues about his plans for the province, so Duncan took the unusual step of laying out the Tory threat in the budget document itself.
"New major cuts would either delay Ontario's deficit reduction plan or jeopardize gains in education and health care," the budget states.
Reducing the harmonized sales tax by just one per cent would rob the treasury of $3 billion a year, it states. To make up for the loss, the province would have to lay off 33,000 teachers or cut 62,000 nursing home beds.
During the budget lockup, political operatives distributed an ominous "menu" of cuts that would be needed to eliminate $1 billion from government revenues -- from slashing welfare to scrapping a benefit that supports more than a million children.
Last time Hudak sat at the cabinet table under former premier Mike Harris, the Tories closed hospitals and fired nurses, Duncan said.
"Look at the nurses we hired versus the nurses they have fired," he said, carrying a prototype BlackBerry Playbook tablet on loan from Ontario-based Research in Motion. "So it is very much an election budget. And it is very much about a public debate about the future of this province."
Anticipating opposition attacks on his own government's spending scandals, Duncan outlined belt-tightening measures aimed at finding $1.5 billion in savings over three years.
They included the potential sale of ServiceOntario, the rapidly expanding agency that delivers services like drivers' licences and health cards.
The province plans to have major agencies reduce their spending by $200 million by 2013-14, cut 1,500 civil service jobs by 2014 and trim executive compensation packages among Crown corporations, hospitals and universities by 10 per cent.
It will also shut down construction of a new Toronto courthouse despite case backlogs, close old jails and move inmates to newer, bigger facilities.
Program spending won't drop as planned in the coming year, but won't increase by much -- just 0.4 per cent. Future years will see modest growth of between $1 billion and $2 billion annually.
The controversial HST -- a favourite target for the opposition parties -- and other sales taxes will bring in $20 billion this year, a figure that will increase about $1 billion annually.
Still, Ontario will add $67.5 billion in red ink before the province returns to balance in 2017-18. That's when the provincial debt will reach an estimated $307.5 billion, compared to $132.6 billion when Premier Dalton McGuinty took office in 2003.
Hudak seized on that staggering figure as proof the Liberals can't be trusted with a third term after forcing the HST on voters and driving up electricity bills.
This year alone, the debt works out to about $18,576 for every man, woman and child in Ontario.
The Liberals have increased spending by 70 per cent while the economy has grown by only nine per cent, Hudak said. Yet Duncan spent most of his time slinging mud at the Opposition instead of explaining his budget.
"They will increase spending and they will raise your taxes to pay for it. I know it, Ontario families know it and Dalton McGuinty knows it," Hudak said. "This is his routine: get elected, break promises, spend your money, increase your taxes, repeat."
The Canadian Taxpayers Federation joined in, slamming the Liberals for failing to stop Ontario from sliding into a "major debt crisis."
Hudak said he'd give families with real tax relief and balance the budget, but wouldn't provide any specifics.
He hinted that a Tory government would zero in on the pay of civil servants to cut costs, saying details will come this spring when the party releases its platform.
The New Democrats dismissed the budget as yet another setback for families worried about rising household costs, dwindling savings and lost jobs.
"Dalton McGuinty's answer has been a new sales tax on people's everyday essentials and a multibillion-dollar handout to some of Ontario's richest corporations," said leader Andrea Horwath.
Proceeding with those corporate tax cuts even pit the premier against his campaigning federal cousins, including his brother David, she pointed out.
"He had a chance to fix that in this budget. He chose to stick to the status quo that just isn't working," she said.
Duncan claims deep cuts would jeopardize Ontario's fragile economic recovery. But that's not necessarily the case, said one economist.
Ontario's recovery has pretty much taken hold at this point, said Helmut Pastrick, chief economist of Central 1 Credit Union.
Cutting tens of billions of dollars could result in some falloff in economic activity, but a few billion wouldn't make much of a difference, he said.
"It would have to be very, very considerable to bring this economy back down into a slowdown or even a recession," Pastrick said. "It would have to be very drastic."
