March 12, 2012 / 7:13 PM / 6 years ago

Ontario NDP wary on backing Liberals' next budget

TORONTO (Reuters) - The left-wing New Democratic Party warned on Monday it would vote against the Ontario budget if the governing Liberals put forward something that’s “significantly austere,” raising the specter of an early election in Canada’s troubled economic powerhouse.

Ontario NDP leader Andrea Horwath poses for a portrait at Queens Park in Toronto, March 12, 2012. The left-wing New Democratic Party warned on Monday it would vote against the Ontario budget if the governing Liberals put forward something that's "significantly austere," raising the specter of an early election in Canada's troubled economic powerhouse. REUTERS/Mark Blinch

The Liberals hold only a minority of seats in the Ontario legislature, so a “no” vote from the New Democrats could force the Liberals out of power and trigger a second election in only six months.

The budget is likely later this month or early in April. The province racked up a big deficit during the recession and the Liberals now want to rein that in.

“I would hope that the government knows that and at the end of the day, if we can’t support the budget they bring forward, we will not support it. We’ve told them that very clearly,” NDP leader Andrea Horwath said in an interview.

Horwath said she has no single demand for the Liberals in return for NDP support for the budget. But she suggested the government should take a balanced approach and address some of her priorities on corporate taxation, health care and job creation.

“We’ve voted against every budget that I’ve been here for because we think that they’ve gone down the wrong track,” she said.

The Liberals fell one seat short of a majority in last fall’s provincial election, so they need support from at least one other party to stay in power. The NDP, with 17 seats in the 107-seat provincial legislature, is the most likely kingmaker. The Conservatives, the second biggest party in the legislature, are unlikely to support the budget.

Horwath wants Ontario to raise the corporate tax rate to 14 percent or freeze it at 11.5 percent, while the Liberals had wanted to cut it to 10 percent by next year.

She also urges salary caps for public sector executives, an end to privatization in home care, and only rewarding companies that invest and create jobs.

Ontario Finance Minister Dwight Duncan said last week that the Liberals may cancel their plans to cut corporate taxes to ensure the business community shares the pain as the province seeks to balance its budget.

The Liberals have been less receptive to other opposition ideas, such as a bill introduced by the NDP and Conservatives to reduce taxes on home heating bills.

Horwath said time will tell if the Liberals want to work with the other parties. “The Liberals are still to a large extent operating like they have a majority here,” she said.

Faced with a C$16 billion ($16 billion) budget deficit, the Liberals are under mounting pressure from rating agencies and investors to slash spending and raise revenue. Duncan says he will balance the budget by 2018 “come hell or high water.”

The Liberals spent eight years with a majority in the Ontario legislature before last year. The next election is due in 2015.

($1=$0.99 Canadian)

Editing by Janet Guttsman

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