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Ontario would stop providing taxpayer dollars to automotive companies who want to set up manufacturing facilities in the province under a Progressive Conservative government.

Leader Tim Hudak said Friday that he would not provide funds for any one company trying to build a new facility in the province, but would instead create a better business environment to attract large corporate investments.

"We will not be in the corporate welfare business," he said, when pressed by The Globe and Mail editorial board on how his government would deal with auto companies looking for funds. "This isn't ideological – it's practical."

Mr. Hudak said he supported the $4.8-billion bailout that helped keep Chrysler and General Motors alive in the province during the recession because it was intended to save an entire sector, adding the package was approved under "exceptional circumstances" that were unlikely to be repeated.

He said the province is in a compromised position every time a potential employer makes inquiries because companies know they are able to demand funds in exchange for factory jobs. He said Liberal Leader Dalton McGuinty wouldn't be able to break the cycle.

"If you're playing cards with Dalton McGuinty you can always bluff, because you know he's going to throw down his hand," he said.

Mexico and most American states are eager to attract manufacturers through deep cash incentives, and Ontario has a long history of providing funds. Provincial money has helped Ford rebuild its Oakville plant, for example, and also helped attract Toyota to Woodstock.

When asked what he would do if it was a choice between losing the company's interest or competing with another jurisdiction over funding, he said he would let the company walk away before cutting them a cheque.

Instead, he said he would invest in things such as more efficient transportation and electrical delivery systems, and lower corporate and personal taxes to woo companies into the province.

"I actually believe in the stimulative effect of tax relief," he said.

Friday morning, Mr. McGuinty toured the Chrysler Brampton Assembly plant, which received some $961-million in government loans between 2008 and 2009. He took the opportunity to suggest Mr. Hudak would devastate the sector.

"Just as Tim Hudak did nothing in the past to stand up for the auto sector, if we were called upon to do so in the future, he would not stand up for the auto sector," Mr. McGuinty said.

The Chrysler plant employs 3,500 workers and the company paid back its loans in May.

"There was a very important public debate that unfolded and there were many, including the PC opposition, who said just let the economic forces play themselves out," Mr. McGuinty said.

He said instead, he called Prime Minister Stephen Harper and said something needed to be done.

"Today, the sector has turned around. We're once again the No. 1 producer of cars in North America," Mr. McGuinty said. "This is due in part to what we did as a Liberal government."