CTV Toronto has learned the Ontario government will blend the provincial sales tax with the federal GST in Thursday's budget, but will provide help to a wide swath of the province's families.

The Liberal government of Premier Dalton McGuinty will mail out cheques totalling up to $1,000 to families making less than $160,000 per year, CTV Toronto's Paul Bliss reported Wednesday.

About three cheques will be issued over a 12-month period to compensate for the expanded range of the tax.

The move -- without adjustments -- would extend the province's tax take to new homes, children's clothing, heating fuel, books, fast food meals under $4 and feminine hygiene products.

Sources say that the government may offer some exemptions from the harmonized tax, including new homes.

The government has already announced that its budget deficit will total $18 billion, based on $5 billion in the year concluding and $13 billion in the new budget year. One reason for that is that the govenrment will be spending $27.5 billion on infrastructure spending in an effort to kickstart the economy.

Finance Minister Dwight Duncan said Wednesday that his budget will detail a plan to get Ontario out of that massive financial hole.

McGuinty echoed that, saying: "There is a concerted global effort on the part of national and sub-national jurisdictions to find ways to stimulate the economy.

"That necessarily means higher deficits than usual, and that's compounded by the fact that governments like ours don't want to make cuts to our schools and our hospitals, so we're going to run a significant deficit," he said.

In the legislature, however, the opposition smelled political blood over the possible blending of the five per cent GST and eight per cent PST.

"Premier, you already have the folks in this province by the throat," said interim Opposition Leader Bob Runciman. "How much tighter are you going to squeeze them?"

The Speaker forced him to withdraw that remark.

NDP Leader Andrea Horwath picked up that line of attack.

"That's eight per cent more to heat their homes, eight per cent more to dress their kids, eight per cent more for a hot dog on the corner," she said. "Why is the premier slapping an eight per cent sales tax on families at a time when they can least afford it?"

McGuinty appeared calm and confident, perhaps because knew about the soon-to-be-announced rebate plan.

"We will find ways to provide better supports to Ontario families," he said.

"We're going to take measures at the same time to strengthen the economy because we know that unless we enhance our capacity to do so we are going to place our public services at risk."

Runciman replied: "It's pretty clear from the premier's public comments that they're going ahead with this, and I'm not sure that he understands the scope of this tax grab."

Most analysts suggest it will take at least a year to prepare for the switch to the new tax regime.

Business groups have lobbied for the move, saying it will save them about $100 million per year in red tape costs.

The Canadian Press reported Wednesday that some government sources are suggesting the budget may accelerate corporate tax cuts to help existing businesses and lure new investment.

With a report from CTV Toronto's Paul Bliss and files from The Canadian Press