McGuinty listening to NDP budget proposals

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Ontario Premier Dalton McGuinty is not outright rejecting New Democratic Party Leader Andrea Horwath's proposal to tax the rich, an idea that apparently has some support within his caucus.

Striking a conciliatory tone on Thursday, Mr. McGuinty said his party is engaged in a "healthy and respectful dialogue" with the NDP.

"Nobody gets everything they want, including us in government," Mr. McGuinty told reporters. "You've got to reconcile competing interests."

Mr. McGuinty said he wants to see the NDP's proposals in their entirety before he passes judgment. But he declined to reject out of hand Ms. Horwath's proposal to have people who earn more than $500,000 a year pay higher income taxes.

NDP insiders said members of the Liberal caucus have told them that they agree with the proposal to create a new tax bracket for the rich and raise their tax rate by two percentage points.

"We are simply redistributing a little bit of the wealth," an NDP insider said.

Ms. Horwath says the higher taxes would raise additional revenues of $570-million. Finance Minister Dwight Duncan disputes the NDP's math, saying the measure would generate considerably less than that.

The NDP is proposing to use most of the new revenue to cut the provincial portion of the harmonized sales tax on home heating. But a senior Liberal source said that's a "non starter."

Ms. Horwath is trickling out her demands in return for saving the minority Liberal government. On Thursday, she called for a cap on executive pay in the public sector and stronger protection for whistle blowers. She plans to unveil her next set of demands as early as Tuesday, sources said.

The vote on the budget motion must take place no later than April 24.

The pay for all newly hired executives of hospitals, universities and other public sector entities should be capped at twice the premier's salary, or $418,000, Ms. Horwath said in recycling an idea from her campaign platform for last fall's provincial election. The pay for existing executives, including bonuses and other incentives, should be frozen, she said.

Ms. Horwath made it clear at a new conference that she is more interested in working with Mr. McGuinty than in toppling his government.

"We don't have a massive laundry list that's not reasonable," she said. "If it was only a political game-playing exercise, we would have asked for the moon and known we wouldn't have got it."

With Progressive Conservative Leader Tim Hudak's outright rejection of the provincial budget released last week, the Liberals need the NDP's support to pass the budget bill.

Unlike the Tories who "abandoned" an opportunity to change the budget, Mr. McGuinty said, the NDP are making a "sincere effort."