TORONTO - The fate of Ontario's Liberal government will hang in the balance next Tuesday when the legislature holds a high-stakes budget vote.
It's the first opportunity for the opposition parties to bring down the minority Liberals, sending voters to the polls for a second time since last fall's Oct. 6 election.
The Liberals need at least two opposition votes to survive and have yet to strike a deal with the NDP. But they can't put it off any longer, as the rules of the legislature require that a vote on the budget motion be held no later than April 24.
The Progressive Conservatives have already vowed to vote against the budget, saying it does nothing to create jobs or stop the province from spiralling further into debt.
Government house leader John Milloy said he'll continue to work with the New Democrats, but made no promises to compromise to avoid another election.
"Coming back from a break week, I had everyone asking me, 'Reassure me that there won't be an election'," he said Monday. "I can't give that reassurance."
The NDP want to hike taxes for anyone making more than $500,000 a year, which they say will allow the province to lift a planned freeze on welfare rates and put more money into home care and community care.
They also want a new job creation tax credit, the provincial portion of the HST removed from home heating bills and Ontario Northland railway to remain in public hands.
Premier Dalton McGuinty has poured cold water on the NDP's demands, claiming they'll add $1 billion a year in spending when his government is trying to slay a $15.2-billion deficit.
NDP Leader Andrea Horwath fired back in the legislature Monday, saying McGuinty "knows very well that New Democrat proposals will not add one red cent to the deficit."
If a deal isn't reached within the next week, the NDP could buy more time by supporting the budget or abstaining from the April 24 vote. That would allow them to put off their final decision until a second confidence vote on the budget legislation is called.
All three parties are still mired in campaign debts, which will likely weigh heavily on any decision that could result in another election.
Horwath wouldn't reveal the NDP's game plan, saying she remains optimistic that an agreement can still be reached before the vote next Tuesday.
"We'll use up every minute that we can to get to a place where we can see a budget that's more balanced and more fair for Ontarians," she said.
Milloy wouldn't say whether the Liberals would be prepared to accept any of the NDP's suggestions, saying he's leaving those negotiations behind closed doors.
"We're certainly not there yet because our analysis shows their suggestions will add to the deficit," he said.
Instead, he accused the Tories of forcing another costly election that no one wants — a familiar refrain from the Liberal camp in recent weeks — by nominating candidates in various ridings.
However, Milloy acknowledged that he's talked to his riding association and campaign staff about "contingencies."
Tory Leader Tim Hudak said he asked to have nominated candidates in place before December. The party's new president, Richard Ciano, has also made it clear that he wants to strengthen local campaigns and riding associations before the next election.
"We want to have early nominations of folks in place, because when you're in a minority government, you never know," Hudak said.
The 2012 Ontario budget freezes pay for doctors, and extends a pay freeze for health care executives. The province will begin means-testing seniors' prescription drugs, paid for under the Ontario Drug Benefit Plan, effectively meaning that the 5 per cent wealthiest seniors covered by the plan will have to pay more into the plan. Seniors with incomes over $100,000 and senior couples with combined incomes above $160,000 will be affected. Increases in health care spending will be capped at 2.1 per cent per year.
The budget freezes pay for teachers. A pay freeze for educational executives, already in place, will be extended. School boards in low-population areas will be amalgamated, and "under-utilized" schools will be shut. Student transportation will be cut by $34 million.
The province will begin means-testing seniors' prescription drugs, paid for under the Ontario Drug Benefit Plan, effectively meaning that the 5 per cent wealthiest seniors covered by the plan will have to pay more into the plan. Seniors with incomes over $100,000 and senior couples with combined incomes above $160,000 will be affected.
Welfare rates will be frozen and planned increases to the Ontario Child Benefit will be delayed.
There are no tax hikes in the 2012 Ontario budget, but it does freeze the corporate tax rate at 11.5 per cent, foregoing planned reductions in the tax rate to 10 per cent. The freeze is expected to save $1.5 billion over three years.
Ontario will cap the 10 per cent hydro bill rebate at 3,000 kilowatt-hours, a limit high enough that most homes won't be affected, but businesses could be. Reducing the tax credit will save $470 million over three years.
On top of the four jails the province already plans to close, the budget adds two more to the closure list -- one in Brantford and one in Chatham. Overtime for jail guards and the Ontario Provincial Police will be reduced.
Ontario plans to reduce spending on business support programs by $250 million by merging a number of different programs.
The province aims to increase revenue by increasing the number of gambling facilities. [Details to come]