Speaking at a party convention in Sudbury, McGuinty promised to keep the bus lines going amid resistance in northern Ontario to the privatization scheme.
"If you have a bus service right now that's being delivered by ONTC, we will make sure that bus service continues to run," he said after his speech.
The governing Liberals had promised to keep subsidizing the money-losing feeder bus lines, but New Democrat France Gelinas said it's the first time McGuinty has guaranteed that the buses will keep running.
"We know that some of them will always be run at a deficit because the population density is not there to support them, so I guess that's one little step forward," she said.
"It's very tiny. I celebrate the small victory. The rest of it — we still have to climb Mount Everest here to get this decision reversed."
McGuinty's promise may also appease irate northern residents who say Ontario Northland Transit Commission provides a vital service in a region where people often have to travel long distances to get to work, school or access other public services like hospitals.
More than a hundred demonstrators rallied outside the hall at Laurentian University where the premier was speaking to stop the privatization of the transit service.
They invited McGuinty to meet with them, but he declined, saying Northern Development Minister Rick Bartolucci — who is trying to hold on to his Sudbury riding — would connect with them.
While he's sympathetic to their cause, McGuinty said the cash-strapped government just can't sustain a rail and bus service that's losing money when the province needs to focus on investing in things like homecare, nursing homes and post-secondary education.
"I want to assure all the communities affected that we'll work closely with them to ensure that there's a smooth a transition as possible, so that transportation services are still there for them," the premier said.
"But we're just not getting the value for our money that we have a responsibility to get."
But one ONTC worker who brought his family to the rally said he feels that northern Ontarians are getting the short end of the austerity stick.
"They put a lot of money into southern Ontario like GO Transit and the TTC," said the 43-year-old diesel shop supervisor from North Bay, who brought his wife and two young sons to the rally.
"Obviously we don't have the numbers in northern Ontario that Toronto has, but it's still a service for northern Ontario. You've got to sacrifice to help out northern Ontario."
Progressive Conservative Vic Fedeli, a former mayor of North Bay, said McGuinty's fire sale of Ontario Northland won't save as much money as he claims.
The government will be stuck with an unfunded pension liability of between $100 million to $200 million, he said. They're also keeping the Polar Bear Express, which costs $10 million a year, and keep bus lines that are running at a loss.
They would have known what they were getting into if they'd actually consulted ONTC's clients and residents in northern Ontario before embarking on the poorly thought-out plan, Fedeli said.
"You've got Toronto bureaucrats making decisions about the north when most of them have never been north of Vaughan," he said.
McGuinty once made a promise — in writing — never to privatize Ontario Northland. Gelinas said she hopes he'll keep his word this time around.
"I'm a very optimistic person," she said.
On another front in his fight to eliminate the deficit, McGuinty was asked about reports that his government is close to reaching a new labour agreement with Ontario English Catholic Teachers' Association. But he wouldn't say if a deal was imminent.
"We'll work as hard as we can to try to secure an agreement at the earliest possible opportunity so that we can maintain a sense of stability with respect to September and a sense of tranquility through the summer," he said.
The Liberals are trying to get workers in the broader public sector to accept a wage freeze as they battle the deficit, and say they'll legislate one if all other options fail.