The Canadian Press - ONLINE EDITION

Will the Ontario budget trigger an election or will NDP prop up Liberals again?

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TORONTO - With much of Thursday's Ontario budget already released through official announcements and unsanctioned leaks, the remaining question is will it trigger a June election or will the NDP again prop up the minority Liberal government.

The New Democrats warned they wouldn't support a budget that hikes taxes on the middle class, and said they wanted corporations to pay more towards transit and infrastructure, conditions the Liberals appeared ready to meet with their fiscal plan.

NDP Leader Andrea Horwath said Wednesday she wants to actually see the budget, and consult with the public, before she announces whether or not the party can support the Liberals on the confidence vote that will follow within weeks.

"What we're going to do is have a look at that budget, listen to the cues we get from the people of Ontario, and make a decision," she said.

Premier Kathleen Wynne complained Wednesday that she'd been trying unsuccessfully since February to arrange a meeting with Horwath, and would still like to talk to the New Democrat leader about how to get the budget approved.

"I need to know what her intentions are in terms of the process going forward," said Wynne. "Are we going to be able to discuss getting the budget passed? Has she already made a decision? I just don't know any of that."

Horwath has to walk a fine line, deciding whether it's better to keep dealing with a left-leaning Liberal government or force an election in which she could have to face a right-wing Conservative party that won't be inclined to make concessions to the NDP.

Wynne announced the budget would allocate $29 billion over 10 years to expand public transit and repair and upgrade roads and bridges, but when asked how she would raise the money she said only that the Liberals would not tax middle-income earners and wouldn't raise the gasoline tax or the HST.

However, documents The Canadian Press obtained from a source outside the government show the Liberals will hike taxes on high-income earners, corporations and smokers to help raise money for public transit — a centre piece program in a budget that could turn into the basis of the government's re-election platform.

The documents say the budget will announce the phase-in of a four-cent-per-litre increase in the tax on aviation fuel over four years, restrict tax credits for large corporations and stop construction companies from claiming the fuel tax exemption.

Wynne also announced the budget will include a $2.5-billion fund to give grants to corporations to help attract jobs and will create an Ontario Retirement Pension Plan, which will require contributions from employers and workers.

The Progressive Conservatives said they would end "corporate welfare," and quickly condemned the provincial pension plan as a "job-killing payroll tax," but improving retirement income is an idea that the New Democrats have championed in the past.

Many of the other pre-budget announcements from Wynne were designed to win NDP support for a third consecutive year, such as $280 million to increase the pay for personal support workers and $269 million to raise wages of child-care workers.

The Liberals also promised $1 billion to develop the Ring of Fire mineral deposit in northern Ontario, $50 million to help would-be parents pay for in-vitro fertilization treatments, $32 million to enhance school lunch programs and $1 million to give seniors grants to help them stay in their homes.

Unlike the last two years, when the NDP negotiated changes in each budget to get a tax on incomes over $500,000 and a promise to lower car insurance premiums by 15 per cent, this year there were no negotiations with the Liberals, public or private.

"It was a completely different process this time," said Horwath. "We've set out some fundamental priorities that we wanted to see addressed, and I guess we'll see what the budget holds."

The government is facing shrinking revenues and an $11.3-billion deficit, which Finance Minister Charles Sousa insisted will be balanced on schedule by 2017-18.

However, Sousa signalled the deficit will rise in the next couple of years and said he won't slash spending to meet interim deficit reduction targets, something the credit rating agencies will be watching closely.

"We've made it clear that notwithstanding revenue shortfalls that may occur, we're not going to sacrifice those programs that are going to create jobs," he said. "So if in the short-term some of the targets aren't met, that is what we always said we would do."

Wynne refused Wednesday to dismiss the idea of calling an election herself if the New Democrats take too long making up their mind on the budget, and said she's ready to campaign on the fiscal plan if necessary.

"I'm not going to rule anything out because I don't know what is going to happen when we bring the budget into the legislature," she said.

"I am absolutely confident to take this budget to the people of the province and campaign on what's contained in it."

The Progressive Conservatives said it's hypocritical for the NDP to call the government corrupt over the $1.1 billion spent to cancel two gas plants, accuse the Liberals of trying to cover-up the scandal by deleting emails, but still keep supporting the government.

While Horwath wasn't tipping her hand about how the NDP may vote on the budget, her nomination meeting to become the party's candidate in the Hamilton Centre riding is scheduled for this Saturday.

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