02/20/2012 10:17 EST | Updated 04/21/2012 05:12 EDT

Ontario Budget, Ornge Scandal Hot Topics As Legislature Resumes

TORONTO - Ontario's growing debt is the boogeyman that keeps Finance Minister Dwight Duncan awake at night.

For everyone else, the new nightmare is where he'll swing the axe in his spring budget — and who will end up paying the price if he doesn't.

The daunting task of putting together a budget that will meet the minority Liberals' deficit-elimination target while satisfying at least one of the opposition parties will dominate the upcoming legislation session, which resumes Tuesday.

But a criminal probe into "financial irregularities" at Ornge, Ontario's troubled air ambulance service, is also threatening to steal the spotlight.

The Opposition Conservatives have already called for Health Minister Deb Matthews to resign over the publicly funded Ornge, which they see as yet another example of mismanagement and waste under the Liberals.

The criminal investigation of a provincial agency is the type of scandal that could, under the right circumstances, trigger an election.

But that's highly unlikely, said Bryan Evans, a politics professor at Toronto's Ryerson University.

All three parties need to pay off their election debts and replenish their coffers, he said. Opposition chief Tim Hudak, who won another mandate after a disappointing defeat last fall, also needs to consolidate his leadership and rebrand the party before making a play to topple the Liberals.

"The appetite for an election in the next year is pretty minimal," Evans said. "Will they go after the government? For sure, but they're not going to make an election the objective."

The other big hurdle is the upcoming budget, a document that needs to satisfy voters — and lenders — that the government is serious about slaying the province's massive deficit by 2017-18 without going too far with its cost cutting.

Economist Don Drummond has already cleared a path towards austerity in his highly anticipated report on how to reduce costs without raising taxes. But many of his recommendations are controversial, from forcing teachers to work longer, to bigger class sizes, fewer hospitals and higher utility bills.

He's made it clear that all 362 recommendations must be implemented to eliminate the deficit and avoid the same fate that befell debt-plagued Greece.

But Duncan insists the governing Liberals will do what they think is right and may not adopt them all, such as scrapping full-day kindergarten. That means they'll have to find other areas to trim in order to curb growth in program spending to just 0.8 per cent a year.

He's suggested that he's open to the New Democrats' suggestion to scrap July's scheduled corporate tax cut from 11.5 per cent to 10 per cent, which would save $800 million a year. It may also be enough to win NDP support for the budget.

The Tories, meanwhile, are demanding that Duncan hurry up and table his budget rather than dither while the province continues to pile on the debt.

NDP Leader Andrea Horwath said she's willing to work with the Tories and the Liberals to make the legislature work, but has her doubts that the other two parties will be as co-operative.

"It's easy words to say that we're ready to work together, that we're ready to talk to the other parties, but we haven't seen much evidence of that yet," she said.

Duncan has invited the NDP finance critic to meet with him to discuss the Drummond report, Horwath said.

"Now perhaps this is a turning of the page ... and if it is, I certainly welcome it," she said.

The upcoming session may also yield a few surprises. Rumours persist that a New Democrat is interested in crossing the floor, which would bolster the Liberals' voting power.

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