09/13/2011 05:42 EDT | Updated 01/12/2012 02:22 EST

Immigrant tax credit issue peters out, leaders talk jobs and government waste

TORONTO - A surprise hot-button issue in the Ontario election campaign over an immigrant tax credit petered out Tuesday almost as quickly as it flared up, allowing the leaders to get some traction with their pet issues.

The campaign thus far had been marked by sparring between the Liberals and Progressive Conservatives over a Liberal proposal to give a $10,000 tax credit to businesses that hire certain new Canadians.

Tory Leader Tim Hudak initially slammed the plan as an "affirmative action program to hire foreign workers," and the Liberals immediately decried the attack as xenophobic.

The Conservatives prepared a new round of onslaught against the merits of the plan Monday, with radio ads, press releases and talk from Hudak. But with the language noticeably softened and the inflammatory "foreign workers" term all but deep-sixed, the controversy fizzled Tuesday.

Hudak made only a passing reference to McGuinty's "misguided $10,000 affirmative action subsidies" at an event in London, Ont., focusing instead on slamming Premier Dalton McGuinty over government waste.

The tactical switch comes as two polls -- one conducted over the first week of the campaign, the other done over the past weekend -- suggest the Tories are losing the lead they had before the election campaign began.

Hudak turned the page Tuesday by charging that McGuinty would increase taxes, drive hydro bills up and engage in more eHealth-style waste, while a Conservative government would give families relief by taking the provincial portion of the HST off hydro bills and home heating.

"I won't be signing these pie-in-the-sky contracts that are driving up hydro rates through the roof," Hudak said.

"My plan is to get out as much as I can and talk about our vision of change."

On Tuesday, all three major party leaders were able to talk about their own agendas, which for McGuinty and NDP Leader Andrea Horwath focused on jobs.

Horwath visited a skills training centre in Windsor, Ont., and talked about youth unemployment.

"Our plan will give hope to young people trying to break out of a long-term reliance on part-time work," she said.

"I don't want to help people compete for a shrinking pool of jobs. I want to create more jobs so everyone can share in Ontario's opportunity."

A key plank in Horwath's platform is a job creation tax credit that she estimates would create 20,000 new jobs each year in Ontario. The credit would reimburse employers for 20 per cent of the salary paid to a new hire during their first year of employment, and the employer would have to prove a new job has actually been created.

Her message did get a bit sidetracked Tuesday as she was forced to come out against a veteran Toronto New Democrat's campaign after it used an auto-dialling system to call voters with a pitch for support. The calls said the party was going through a rough patch since federal leader Jack Layton died last month.

The issue of jobs tends to resonate well with voters, as well as health care and education, said Carleton University political science professor Jonathan Malloy.

"Given concerns about unemployment, especially further pressures and closings in the automotive and other traditional manufacturing sectors, it's not surprising that jobs are a concern," he said.

"Also, slowdowns and freezes in public service hiring, and difficulties particularly for youth and recent graduates" make jobs top of mind, Malloy said.

McGuinty has been trying to focus on jobs all along too, albeit a very specific type of job. He has held events to talk about green energy jobs nearly every day of the campaign, with a particular focus on solar power.

Wind power hasn't really been raised yet, but McGuinty said that's coming.

"When it comes to talking about how we're going to strengthen this economy, how we're going to create more jobs, we are on to something today in Ontario," he said. "It's clean energy. We're at the head of the pack here in North America and I want to keep moving us forward."

It remains to be seen whether the narrow jobs focus pays off for McGuinty. Malloy said the premier is trying to score points both with those concerned about labour issues and those concerned with the environment at the same time.

However, he said any payoff will likely be seen more with the green vote.

"It resonates more with educated, white-collar professional voters and probably less with the sectors actually under economic pressure," Malloy said.

"It looks good as a general idea, but problems in its implementation, costs, and the relationship to higher hydro rates all present a number of downsides for the Liberals."