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Ontario PC MPP Peter Shurman is pictured at Queen’s Park in March, 2013. Mr. Shurman has been dismissed as Ontario PC finance critic after billing taxpayers for his second home.

Peter Power/The Globe and Mail

Ontario Progressive Conservative MPP Peter Shurman has been fired as his party's finance critic after billing taxpayers for his second home.

PC Leader Tim Hudak met with Mr. Shurman face to face Sunday afternoon. In a heated exchange, a Tory source said, Mr. Hudak asked the Toronto-area MPP to return the funds to the treasury. When he refused, Mr. Hudak dismissed him. He will also be moved out of his front-bench position in the assembly, where he currently sits just two places away from Mr. Hudak, and into a less-prominent seat.

Mr. Shurman's use of the legislature's expense account first came under scrutiny last week, when The Globe and Mail revealed that he had received $20,719 last year from a fund intended to help MPPs from far-flung ridings pay for accommodations in Toronto. Mr. Shurman represents Thornhill, a half-hour drive from the legislature, but received the funds because his primary residence is in Niagara-on-the-Lake, some 150 kilometres away from his constituency. He used the money to subsidize his Toronto apartment.

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His actions did not break any rules. Under the current law, any MPP who lives more than 50 kilometres from Queen's Park can claim the housing allowance, whether they live in their riding or not. But Mr. Hudak said this was not enough.

"While the current rules were followed, it is clear taxpayers hold elected officials to a higher standard and those rules need to be changed," Mr. Hudak said in a statement. "As Leader of the PC Party, I believe we have a responsibility to taxpayers to operate in their best interest."

In an e-mail Sunday, Mr. Shurman wrote that he "followed Legislature rules explicitly as written."

"I agreed to stopping receipt of this payment for one reason … I was asked to in order to respect the spirit of what all parties appear to now want," he told The Globe. "I am a person of lifelong integrity and am proud of it."

Mr. Shurman previously twice told The Globe that Mr. Hudak had approved his taking the housing subsidy. Mr. Hudak's spokeswoman confirmed last week that the Tory Leader knew Mr. Shurman was living in Niagara-on-the-Lake, but said he did not know the details of his expense claim. One source said Mr. Hudak was surprised when he learned of the money involved.

Last week, at Mr. Hudak's behest, Mr. Shurman agreed to stop claiming the allowance.

Both the Tories and the governing Liberals have said they will tighten the rules to make sure that only representatives of farther-afield ridings can claim the housing subsidy.

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The Tories expect to name Mr. Shurman's replacement this week, two party sources said.

Mr. Hudak has several seasoned MPPs to choose from, as well as newcomer Doug Holyday, a former deputy mayor of Toronto and veteran municipal politician. One party insider said Mr. Holyday is slated for a prominent role in caucus.

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