TORONTO - Ontario taxpayers won't be hit by any new tax surprises in Thursday's budget, Finance Minister Dwight Duncan said Monday.
There won't be anything in the budget about asset sales either, he said, even though the government is looking at all options to help pay down an unprecedented $25-billion deficit.
"There are no new taxes," Duncan said. "And again, beyond that, I can't talk a lot about what's in the budget on Thursday."
Premier Dalton McGuinty said taxpayers shouldn't hold their breath for more tax cuts either, beyond the one that took effect in January as part of the tax harmonization package.
As of Jan. 1, the provincial rate on the first $37,106 of taxable personal income fell to 5.05 per cent from 6.05 per cent.
"We can only work with one budget at a time, and it's very difficult -- and economists will admit to this -- to know where the economy is going to be a few years out," he said.
"It looks promising for this year, but I think it's premature to talk about any further reductions in taxes because we've invested heavily as a generation now in economic stimulus, and that's resulted in a pretty significant deficit. It's going to take some time to recover from that."
Merging the five per cent federal GST with the eight per cent Ontario sales tax starting July 1 may help to slay the deficit, as it will increase the cost of many items currently exempted from the provincial levy.
The governing Liberals haven't ruled out the possible sale of assets such as the Liquor Control Board of Ontario or the Ontario Lottery and Gaming Corp. either as they try to close the gap between how much they spend and how much they're taking in.
They are looking at options that range from privatization of Crown corporations to bundling several assets into a corporation and selling off shares.
That review hasn't been completed yet, Duncan said.
Thursday's budget is also expected to provide a road map for the government to rebalance the books, which will be awash in red ink for more than five years.
Opinions are mixed about whether the province can eliminate the deficit within the expected seven years.
Hiking taxes won't be necessary to rebalance the books by 2016-17 if the economy improves and the government effectively freezes spending to no more than inflation, said TD economist Derek Burleton.
"As long as the economy recovers moderately, they can pull this off, " he said Monday.
"They can pull off balancing the budget over the six-year period, but it's going to take control in spending growth to about two to 2 1/2 per cent a year."
Scotiabank chief economist Warren Jestin has said that it would take a lot of hard work for the province to eliminate the deficit within seven years.
"The slow growth that we're predicting in the future is going to lead to a very long period of deficit turnaround," Jestin recently told the legislature's finance committee.
"Doing it in five to seven years would be an extraordinary achievement in the type of growth environment we see."
The Liberals say they won't bring in any new taxes, but they can't be trusted given that just last week, the government quietly created a new conservation tax on hydro bills, said Opposition Leader Tim Hudak.
"I mean, c'mon, they just introduced a new tax increase this week and we had to raise it in the house today," he said.
"There's a $53-million tax increase that Dalton McGuinty tried to slip through. Who knows what else he's got up his sleeve?"
The new levy will help cover $53 million of the government's conservation and green energy program and will likely appear on hydro bills in May.
The Liberals say the cost will be minimal -- amounting to about $4 per year -- but the hike will come just before consumers are hit with the 13 per cent harmonized sales tax.
Voters will be asked for their thoughts on the upcoming budget during a so-called "electronic town hall" Monday night with Hudak.
The new technology, which Hudak used during his leadership campaign last summer, allows thousands of people to connect with the Progressive Conservative leader through a conference call.
Voters are called at home and asked if they'd like to join in the town hall. Those who choose to participate will be asked questions about the budget, such as whether they'd like to see debt reduction.
