The Canadian Press - ONLINE EDITION

New help for Ontario farmers in Tuesday's pre-election budget: sources

By: Maria Babbage, The Canadian Press

TORONTO - There will be new help for Ontario farmers in Tuesday's pre-election budget, The Canadian Press has learned.

Finance Minister Dwight Duncan will expand risk management programs, which help farmers offset losses caused by low commodity prices, a government source said.

The current risk management program for grain and oilseed producers will be extended and made permanent in the budget, the source said.

Duncan will also announce a new program for cattle, hog, sheep and veal farmers, and a self-directed program for the "edible horticulture sector" — that is, fruits and vegetables.

"They help mitigate difficulties by providing stable support for managing costs," the source said. "This is another program and investment that's helping improve the competitiveness and innovation in the agriculture sector here in Ontario, and another example of our government helping farmers through difficult times."

The program — described as a type of insurance for farmers — is driven by demand, so it's not yet clear how much it will cost.

Current estimates peg the total cost at $150 million, including farmers' premiums, the source said. Income-stabilization programs for the agricultural sector have totalled $1.9 billion since 2003, when Premier Dalton McGuinty was first elected.

Tuesday's budget, which will set the stage for the fall election, is not expected to contain any big-spending initiatives to entice voters.

Nor will it include the kind of targeted tax credits that the federal Conservatives embedded in their spending plan last week.

Duncan ruled out those kinds of goodies Monday, along with any new tax hikes or cuts.

"Tax credit is a tax cut," he said. "There will be none in the budget tomorrow."

Details of the Liberals' spending plan have been trickling out for days, including smaller-than-expected deficits and $1.5 billion in savings over three years.

On Monday, Duncan announced plans to create 60,000 new spaces for post-secondary students by 2015-16, starting with 15,000 spaces next fall.

The move will cost the deficit-ridden province $309 million a year once fully implemented.

Even though Ontario will be awash in red ink for another six years, the budget will also include a few "strategic investments" in jobs and health care, sources said.

Those investments will help position Premier Dalton McGuinty as the protector of public services ahead of the Oct. 6 election.

Duncan has been hammering that message in recent days, warning that the Opposition Conservatives — who are ahead in public opinion polls — will slash services to rebalance the books.

Instead, Duncan said he'll find ways to make taxpayer money stretch further, which may include contracting out non-essential government services if someone else can do it better and more efficiently.

The government will also create a task force of experts to look at different ways to address Ontario's growing debt, he said.

Some may argue that Ontario can't afford to spend more money on things like college and university spaces, but the province must make those investments to remain competitive, Duncan said.

"I think, quite candidly, that to do anything else would threaten the future of our economy," he said.

"The other guys haven't laid out a plan," Duncan added. "They won't put on paper what it is they plan to do. So we have. We will protect the gains we've made in health care and education and get back to a balanced budget."

But that won't happen until 2017-18, a few years after the federal government is expected to eliminate its deficit.

The Liberals can't be trusted not to hike taxes, said Opposition Leader Tim Hudak. If it's not in Tuesday's budget, voters will get a nasty surprise after the election, he added.

Duncan has even failed to deliver on his promise to freeze public sector wages to cut costs, he said.

"Their plan is to bring in another tax grab on the backs on Ontario families," Hudak said.

"They did it before. They said they wouldn't increase taxes; they brought in the health tax and the HST," Hudak added. "They're just hard-wired to increase taxes. It's in their DNA."

The New Democrats are taking aim at corporate tax cuts, saying big business is getting a break while families are still struggling to pay rising household bills.

And those better-than-expected deficit figures are nothing to brag about, said NDP Leader Andrea Horwath.

"It's the same trick that the government plays pretty much every year," she said. "They overestimate what the deficit's going to be, so that when we get to the day before budget day, they can start patting themselves on the back in terms of what a great job they've done."