Liberals and NDP Reach Budget Deal and Avoid Election
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Liberals and NDP Reach Budget Deal and Avoid Election

McGuinty agrees to surtax on top earners, NDP agrees to back budget.

NDP leader Andrea Horwath on the day the budget was introduced last month.

Ontario, you have a budget deal.

At a final meeting today, Premier Dalton McGuinty and NDP leader Andrea Horwath discussed a proposal that would integrate some key NDP goals into the 2012 budget and avoid an election (which is automatically triggered if a government loses the budget vote). The biggest element of that deal: the Liberals have accepted NDP calls for a two per cent surtax on those who earn more than $500,000. Revenue from that tax will go to reducing the deficit, and it will be eliminated when the deficit is, in 2017. McGuinty has also agreed to provide additional financial support to hospitals in northern Ontario, support for some child-care spaces that were previously in danger, and some transitional funding for the horse-racing industry.

Speaking to reporters earlier today, McGuinty described the proposal as a “sensible compromise,” one that provides for key NDP goals while also respecting the fact that citizens aren’t clamouring for a return to the polls anytime soon. Several Liberal MPPs are also supportive of the surtax as a matter of policy, and have been urging McGuinty to accept it in caucus meetings.

Today is, without doubt, a big win for the NDP and for Andrea Horwath, who emerge from these negotiations with a stronger political voice than ever before. They won real concessions from the government that reflect core NDP values, but also showed themselves to be true to their word when they say they are committed to having the current minority government work. “I still have many concerns…for everyday people this budget still falls short,” Horwath told reporters, “but I feel that we serve the public better by working together in the legislature.”

It is something of a bitter pill, especially because the budget calls for a freeze on public sector wages and pension rollbacks that unions strongly oppose. It is also prudent, given that the NDP has a debt from the last election it has yet to pay off. But most of all it keeps the NDP at the centre of the debate, and is proof positive that they now have policy influence at Queen’s Park.

The Tories, by contrast, have been nowhere in evidence. Tim Hudak came out the day the budget was presented and said his party would be opposing it; in so doing, he put himself on the sidelines. (Whether the Progressive Conservatives reward the principle or condemn the politics of that move is yet to be seen.)

The Ontario Legislature votes on the budget tomorrow morning.