Ontario Liberals dodge election with tax-the-rich deal

Mon Apr 23, 2012 5:46pm EDT
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By Claire Sibonney

TORONTO (Reuters) - Ontario's ruling Liberals on Monday agreed to introduce a new tax on the "super rich" to win support for their budget from the left-leaning New Democratic Party, averting a second election in six months for Canada's most powerful province.

The NDP said it will not oppose the minority government's spending plan after the Liberals agreed to introduce a surtax for Ontario residents earning more than C$500,000 ($500,000) a year.

The Liberals, who promised in their election platform that they would not raise taxes, needed support from either the Conservatives or the NDP to pass their budget and stay in power.

The Liberals said they will agree to a key NDP demand to raise the tax threshold to 13.16 percent for the high earners, up two percentage points.

Premier Dalton McGuinty said the extra revenue, which he pegged at around C$470 million, will help reduce the deficit, estimated at C$15.3 billion for this fiscal year.

It was a second major concession from the Liberals, who on Friday offered more money for childcare and people with disabilities in an effort to win NDP support.

"Ontarians want us to keep working together and that's why we're proposing more changes to make our budget stronger," McGuinty told reporters earlier in the day after meeting with NDP leader Andrea Horwath.

"The NDP want a tax on the rich. We want to reduce the deficit... so if you make more than half a million dollars we will ask that you do a little bit more."   Continued...

Ontario Premier Dalton McGuinty (L) looks on as Finance Minister Dwight Duncan delivers the provincial budget at Queens Park in Toronto, March 27, 2012. REUTERS/Mark Blinch