TORONTO - Last week, Premier Dalton McGuinty was warning Ontario's Liberals to get ready to board the campaign bus for a summer election.
This weekend, he'll be explaining why his budget — despite all the changes the New Democrats forced him to make — isn't so bad after all.
The budget war, which pushed the province to the brink of an election, is a cautionary tale about governing in a minority parliament.
Deals with the opposition parties must be made if the Liberals want to push their agenda forward and that may include last-minute changes they don't like.
But faced with a fragile economy and a $15-billion deficit, McGuinty is under pressure to make things work without pressing the panic button and threatening to take voters back to the polls.
The premier says all the parties have learned their lesson, but wouldn't rule out another major dust-up that could spark a snap election.
"I think we're still in ... a little bit of a learning mode when it comes to dealing with a minority government," he said, while still pointing the finger at the NDP.
"You can play around with a lot of things and we can negotiate, we can tinker and we can try to tailor other things. But when you threaten a big part of the substance of the budget, that's a matter of confidence."
The premier's already lost the confidence of Ontarians who witnessed his ham-fisted attempt to ram the budget through the legislature, said Tory finance critic Peter Shurman.
McGuinty was a lawyer before he entered politics, yet "didn't get so much as a handshake" with Horwath when he made a deal to pass the budget, he added.
"I think the election was the great big bluff," Shurman said.
"So we got into a mess, and how are we out of the mess? With a ridiculous set of priorities set by the NDP ... and a budget that doesn't resemble the original paperwork presented to us on March 27."
Despite all the talk about burying the hatchet, it's clear there are still some hard feelings.
Leading up to the final vote, the Liberals were accusing Horwath of being disingenuous and a backstabber, saying she broke two previous agreements to let the budget pass.
They were furious with the NDP, saying they teamed with the Tories to make more changes to the budget after the government made concessions to get New Democratic support.
But the NDP say they never agreed to rubber stamp the budget bill and gave the Liberals plenty of warning that they planned to make amendments in committee.
McGuinty and his government have lost credibility and dragged down the level of political debate in the province by resorting to personal attacks, said NDP house leader Gilles Bisson.
Last week, the Liberals claimed the opposition-led amendments to the budget bill would create a multibillion-dollar fiscal gap, he said. Now they say they'll be able to meet their targets.
"So which is it?" Bisson asked. "This government has been notorious for saying one thing and doing another."
McGuinty will have to explain to northerners why he's decided to privatize Ontario Northland rail service after promising never to do so, Bisson added. Yet the Liberals accused Horwath of lacking leadership because she supposedly went back on her word.
"So yeah, he's got a credibility problem and I think last week didn't help him," he said.
Next time around, McGuinty said he'll start working with the opposition parties sooner to find some common ground — and maybe get something in writing.
"Obviously we're all going to want to work a little bit harder to make sure we nail everything down so we have all the clarity Ontarians would require of us," he said.
But after the messy breakup with the New Democrats, the premier seems to be looking to the Progressive Conservatives for his next dance partner.
The Tories, who opposed the budget the day it was introduced, say they're willing to hear McGuinty out. The two parties would likely find some common ground on wage and contract arbitration for public-sector workers that were removed from the budget, but are expected to be re-introduced this fall as a separate bill.
But McGuinty's conciliatory tone may change once he calls a byelection in Kitchener-Waterloo, the seat vacated by veteran Tory Elizabeth Witmer. Winning that prize would push the Liberals into majority territory, with no need for support from one of the opposition parties.
What's In The Ontario Budget 2012
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.
Crime & Security
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.
Gambling & Lotteries
The province aims to increase revenue by increasing the number of gambling facilities. [Details to come]