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Ontario Premier Dalton McGuinty is seen in this 2011 file photo.

Peter Power/The Globe and Mail

Ontario Premier Dalton McGuinty is providing additional funding for child care and for people who live on disability in a bid to save his minority government.

Mr. McGuinty announced on Friday afternoon that his government will provide $90-million in additional funding for child-care operators in the current fiscal year. It is also increasing Ontario Disability Support Program payments by 1 per cent, or $33-million in total.

These were two of the items on New Democratic Party Leader Andrea Horwath's list of demands in return for supporting the Liberal budget and preventing a snap election.

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Mr. McGuinty said he met with Ms. Horwath on Friday and indicated his willingness to work together to reach an agreement before next Tuesday's budget vote.

"The NDP has shown a willingness to work across party lines to reach an agreement," Mr. McGuinty said in a statement.

Mr. McGuinty stressed that he is not increasing program spending to meet the NDP demands. The additional funding for child care will come out of the Ministry of Education's budget. The extra funding for disability payments will come from savings on generic prescription drugs. The government cut the price of generic drugs in 2010.

"We still have a long way to go," NDP House Leader Gilles Bisson said. "But as long as we're talking and exchanging ideas, that's reason to be optimistic."

The statement did not mention Ms. Horwath's key demand – a new tax bracket for individuals who earn more than $500,000 a year. But Mr. McGuinty is meeting Ms. Horwath part way just one day after she made a major concession by dropping her demand for a break on hydro rates.

The NDP has said the tax-the-rich measure, which has strong support in the McGuinty government cabinet as well as from the public, would raise additional revenues of $570-million a year. That money could be used for child care, disability and other programs to help families, Ms. Horwath said.

"Over the weekend, we'll continue to analyze how else we may be able to work together to make the budget stronger," Mr. McGuinty said.

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The Liberals need the NDP's support to pass their budget because the Progressive Conservatives have said every one of their caucus members will vote against it.

"The PCs abandoned Ontarians from the outset," Mr. McGuinty said. "They decided to vote against the budget before they even read it, risking an unnecessary and expensive election."

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