11/16/2011 11:50 EST | Updated 01/16/2012 05:12 EST

McGuinty to meet with opposition leaders ahead of new legislative session

TORONTO - The Progressive Conservatives are planning to back an NDP bill to slash the HST on home heating bills when the legislature returns next week, setting the stage for the first showdown in Ontario's minority parliament.

The Tories campaigned on taking the provincial portion of the HST off heat and electricity bills, as well as removing the debt retirement charge from hydro, during the Oct. 6 election, Hudak said Wednesday.

"So this is HST off heat only — we'll support that," he said after a meeting with NDP Leader Andrea Horwath.

"It's not fully what we would like to do. It's a step in the right direction. The PCs will obviously support that."

It's the first sign of a co-ordinated opposition strategy since last month's election, which left the governing Liberals one seat short of a majority government.

But even though the opposition parties have more votes combined than the Liberals, it's unlikely the private member's bill on the HST will become law.

The Liberals still control which bills get called for third and final reading, and have made it clear that they won't call up the HST bill.

Premier Dalton McGuinty has been pushing his own agenda instead: a promised renovation tax credit for seniors to stay in their homes, which he says makes more economic sense than an HST break.

"I think we need to be smart and strategic in the kinds of investments that we make," he said after visiting Savaria, a Brampton, Ont., company that manufactures chairlifts and elevators.

"Our ... tax credit will create jobs, taking money off of home heating doesn't create jobs. The credit I'm talking about will also save us health-care dollars, so I just think it's a smarter approach."

Finance Minister Dwight Duncan said he's open to ideas from the opposition parties, but with Ontario expected to rack up another $16 billion in red ink this year alone, his first priority is to balance the budget.

If Hudak and Horwath are serious about their "reckless" HST cut, they must provide specific recommendations on how they would come up with the $350 million a year needed to finance it, he said.

"I suspect the NDP will want us to raise taxes," Duncan said. "I don't know that Mr. Hudak would agree with that."

Once it's fully implemented, the home renovation tax credit will cost about $136 million a year, he said.

Duncan acknowledged that the Liberals will likely need the support of one of the two opposition parties down the road. But he wouldn't say how the government would proceed if the parties demand third reading of the HST bill in exchange for their support on another piece of legislation.

"Well, we'll have that debate," he said.

Both the party leaders will have their chance to bend McGuinty's ear on Friday after weeks of complaints that he isn't listening to them.

McGuinty has scheduled separate meetings with the two party leaders, saying it's a matter of "common courtesy."

Horwath said she's looking forward to her tete-a-tete with McGuinty and hopes it will be as productive as her meeting with Hudak.

"The Liberals did not form a majority, which means the majority of people didn't vote for the Liberals," she said after emerging from the meeting.

"That makes it incumbent on us — Mr. Hudak, Mr. McGuinty and myself — to find the places where we can work together to deliver for everyday families."

A new legislative session will kick off Monday with an election of the Speaker, followed by the throne speech on Tuesday and an economic update on Wednesday.