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Ontario NDP Leader Andrea Horwath speaks to the media at a news conference at Queen's Park on Toronto on Friday, June 15, 2012Chris Young/The Canadian Press

New Democratic Party Leader Andrea Horwath has come up with a compromise aimed at salvaging Premier Dalton McGuinty's minority Liberal government and ending the impasse over the budget bill.

But relations between the two leaders have cooled significantly since last week, when Mr. McGuinty accused Ms. Horwath of being "disingenuous" and blamed her for the spectre of a summer election just nine months after voters in Ontario went to the polls.

"I don't believe that name calling and sandbox politics is the right way to go," Ms. Horwath told reporters at a news conference Monday morning. "Frankly, I think it's a little undignified. I think it turns people off."

Ms. Horwath said the NDP will now restrict its objections to measures in the bill dealing with changes to labour arbitration that her party "simply cannot support."

The NDP members on the legislature's finance committee will now call for the deletion of four entire sections of the bill, all dealing with arbitration, during clause-by-clause debate on Monday.

Initially, the NDP planned to vote against 13 entire sections of the bill. But Ms. Horwath is pledging to restrict her party's objections to the arbitration measures if the NDP's amendments to other sections of the bill are passed.

As a result, the NDP will no longer call for deleting measures dealing with plans to outsource services to the private sector – the section that has drawn the most fire from labour leaders and health care activists.

"We are very concerned about that section," Ms. Horwath acknowledged. However, if her party's proposed amendments pass, she said, the province will have the "proper amount of oversight and accountability that's necessary if and when any government contemplates privatization."

Ms. Horwath was responding to a letter from Mr. McGuinty on Sunday, asking her to commit in writing that her party will not vote against entire sections or block passage of the budget bill when it goes to a vote on Wednesday.

"Ultimatums, name calling and election threats do not impress me," Ms. Horwath said, adding that she answers to the people of Ontario, not to Mr. McGuinty.

"I never wavered in my commitment to allow this budget to pass," she added.

Finance Minister Dwight Duncan issued a tersely-worded response, saying he is disappointed that Ms. Horwath has "no intention of keeping her word."

Mr. Duncan said he plans to monitor clause-by-clause debate on the bill. If any Section of the bill is blocked, he warned, He will have no choice but to ask the Premier to "review all options."

The government has argued that the budget bill in its entirety is needed to address the province's $15-billion deficit.

"A bill, stripped of much of its contents, would not constitute a strong budget plan," Mr. Duncan said.

Ms. Horwath did not speak to Mr. McGuinty over the weekend. But she did speak to Progressive Conservative Leader Tim Hudak, who has said from the outset that his party will not support the budget bill.

Mr. Hudak told her that "he's not all that interested in making minority parliament work," she said.

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