Updated: Thu Mar. 26 2009 4:39:21 PM

ctvtoronto.ca

TORONTO — A reporter's cheeky question about changes to the retail sales tax triggered an emotional response from Finance Minister Dwight Duncan as he defended his budget in a news conference.

The reporter asked Duncan on Thursday if he would consider naming the new tax, which will be harmonized with the federal GST, the Single Harmonized Tax, or SHT.

The remark triggered laughs, but not from Duncan.

"There is nothing more serious than building the most strong, competitive economy that we can for people in communities like mine (Windsor) that have lost their jobs, their livelihoods -- and their hope," he said.

"This is about bringing that back, and this is the most serious undertaking we can do."

He said the $34 billion in stimulus spending would get "more shovels" in the ground and help people get back to work.

However, he did chuckle when one reporter later asked him, "I hope you don't mind if I call you Floyd" -- a reference to former NDP finance minister Floyd Laughren, who presided over massive deficit budgets in the 1990s.

The combined budget deficit for the year just ending and 2009-10 is $18 billion. The minister said the province's books should be balanced again by 2015-16.

Duncan said the tax harmonization move is part of broader tax reform in the 2009-10 budget that should leave more money in the pockets of most Ontarians and make the province's economy more competitive.

The move joins the eight per cent Retail Sales Tax with the broader federal five per cent GST into a single 13 per cent tax by July 1, 2010.

However, the government has announced transitional payments worth more than $4 billion. Duncan also said that income tax cuts should reduce the amount of personal income tax revenue by $2.3 billion over four years.

On balance, Ontarians won't be paying more tax as a result of these reforms, Duncan said.

Conservative reaction

But interim Opposition Leader Bob Runciman said the new budget is worthless as it will mean more taxes today and more tomorrow "when we'll have to pay for (Premier) Dalton McGuinty's record deficit."

Duncan told reporters that proportionally, Ontario's deficit is about the same as the current federal one.

Runciman said this budget only puts taxes back to where they were before McGuinty raised them.

However, Runciman also said his party supported the "principle" of harmonization. His party might have reduced the harmonized tax to a total rate of 10 per cent -- if the province were in better shape.

"But given the fact that we are facing the toughest economic conditions this province has seen in 70 years, this is a horrible time to be doing what they are doing," he said.

Finance critic Tim Hudak said the payments of up to $1,000 to families to aid in the transition were "bribes."

With an auto sector in crisis, the only line item in the budget is $3.4 billion in "contingency" funding to provide assistance to Chrysler and GM.

"They've done nothing for the auto sector in this budget," Hudak said.

The Tories have proposed programs such as tax holidays or credits for trading in older cars, he said.

"We actually think you should stimulate demand for the purchase of cars to help our auto sector," he said.

NDP reaction

NDP Leader Andrea Horwath pronounced herself "profoundly disappointed" with the McGuinty government's budget, saying it delivered a tax hike.

"Make no doubt about it, Ontarians will be paying more," she said.

"Ontarians will be paying eight per cent more for gas at the pump," she said, adding the average family will pay another $150 per year for gasoline under the new harmonized tax.

"Families will be forced to pay more to keep the heat on in the winter and the lights on at night."

She sidestepped questions about accompanying income tax cuts.

Horwath said the budget won't deliver "smart growth," instead touting her party's policy of targeted investments in industry.

The NDP's "Buy Ontario" policy, if adopted, could make the province a leader in sectors such as wind turbines or transit vehicles, she said.

Horwath also attacked the Liberals for not doing more to help workers facing layoffs.

On the auto file, aid to the troubled North American manufacturers should come with "iron-clad job guarantees," she said, adding government should also perhaps have equity stakes and seats on the companies' boards.

Horwath didn't have a philosophical problem with running a deficit. "I don't believe it's a matter of the size of the deficit. I believe it's what you do with it," she said.

The NDP did support the accelerated child benefit payment, she said.

Both the NDP and Tories said they would be opposing the budget, but the Liberals hold a very comfortable majority in the legislature.