TORONTO - There will "absolutely" be savings for taxpayers as the Ontario government merges two Crown corporations responsible for real estate and infrastructure, Premier Dalton McGuinty said Tuesday.

However, neither McGuinty nor senior cabinet ministers would say how many people will lose their jobs or how much the government will have to dole out in severance to fold the Ontario Realty Corp. into Infrastructure Ontario.

"There are always upfront costs, but over the long term you end up saving money, and that's just the way it works," McGuinty said after a 40-minute speech to the Peterborough Chamber of Commerce.

"Those are two significant agencies (and) we think we can find some efficiencies by bringing them together."

The realty corporation is the first agency to get the axe as the Liberals try to trim their $18.7-billion deficit amid a looming fall election.

Finance Minister Dwight Duncan promised Monday there would be more announcements to come as he works to eliminate about five per cent of the 259 provincial agencies.

Getting rid of the ORC will save about $5 million a year once the costs of merging the two Crown corporations have been spent, he said in Toronto.

Legislation will be introduced to merge the ORC, which manages the province's extensive real estate holdings, and Infrastructure Ontario, which oversees the renewal of the province's hospitals, courthouses, water systems, roads, bridges and other public assets.

The ORC employs about 350 people while Infrastructure Ontario has about 200 workers, but Duncan remained tightlipped on how many jobs will be lost in the shuffle.

Those figures will "become very clear" within the next three months, said Infrastructure Minister Bob Chiarelli, who joined Duncan for the news conference.

"We have concluded that it would be grossly unfair to mention those numbers at the present time, while these employees are still employed by the same employer as we proceed to the merger," he said.

One position that isn't in doubt is that of ORC chief executive David Glass, whose position will be eliminated in the shuffle. The province has named Infrastructure Ontario's CEO David Livingston to take over as CEO for both agencies.

Once the legislation passes, the two corporations will be replaced by a new agency that will be run by a single board and CEO.

By eliminating the ORC, the cash-strapped Liberals are paving the way for a fire sale of valuable properties, said NDP critic Peter Kormos.

The Crown agency manages one of the largest real estate portfolios in the country, with 6,400 buildings and 50 million square feet of space, both owned and leased.

Selling off that impressive portfolio piece by piece could hurt taxpayers in the long run, since they'll have to pay more to lease space from private companies, Kormos said.

"The alarm bells are ringing very clearly," he said.

"What it does is it shifts the philosophy, it shifts the agenda, it shifts the goal of that ministry -- Chiarelli's ministry -- from one of maintaining and stewardship of properties that are public assets to privatization of public assets. Very dangerous course."

Duncan denied that he has any plans to sell off properties.

But even with the elimination of the ORC, there's still a lot more trimming to be done, said Progressive Conservative Lisa MacLeod.

"I find that it's interesting that after seven-and-half years in office, that they're only now starting to look at some of these bloated bureaucracies of these agencies," she said.

The Conservatives under former premier Mike Harris had promised to sell off Crown assets as part of a major cost-cutting agenda.