In a budget that provided few surprises, one development in education is sure to ruffle a few feathers. A tax credit for parents whose children attend private schools in Ontario was announced by Finance Minister Jim Flaherty Wednesday.

The Equity in Education Tax Credit will be phased in over five years and will be good from kindergarten through high school. It can be applied to the first $7,000 of tuition fees, giving parents with children in independent schools a maximum credit of $3,500 a year by the time it is fully phased in.

The government says it expects to lose $300 million in tax revenue because of the credit. About 100,000 children attend 700 private school in Ontario.

Officials say the credit comes in response to parents' complaints that the cost of sending their children to private schools limited their choices for education.

"This funding is to ensure that students, whether they go to a public, Catholic or francophone schools, have the tools they need to succeed," said Flaherty. "We will continue to make new investments in the publicly funded education system to improve the quality of education in Ontario."

But Opposition Leader Dalton McGuinty says the credit is designed to help wealthy families, not ensure a bigger choice.

"This budget shifts $300 million out of public education and into private schools. Don't make any mistake about this, if it walks like a duck, swims like a duck, and quacks like a duck, it is a duck. We have a new voucher program in place in the Province of Ontario effective today. It's a program that's going to enable everybody, especially the wealthy, to send their children to private schools. I mean how does that help our working families? Obviously it does not," he said.

"I think what we should be doing is investing in public education," said McGuinty, adding he would scrap the credit if his party were to win the next election.

Howard Hampton, leader of the provincial NDP, says the new credit is a "clear signal" the Tories prefer private schools over public ones. "The small increase in public school funding will not even cover soaring costs for heating and electricity schools are facing," he said.

Annie Kidder of the group "People for Education" says the government is actually heading down the road to a two-tier education system.

"No matter what you call this tax credit, it's a voucher. When you take tax money and spend it in private schools, that's what a voucher is. We're beginning to have a two-tier system in public education. This new tax credit will allow people who can afford it to send their children to private schools and get [the tuition] back," said Kidder.

"What we really needed was an announcement of more funding for public education," she said.

Two days before the budget came down, the head of the Secondary School Teachers Association had good things to say about the government. Earl Manners was singing a different song Wednesday.

"This budget is the death knell for public education," he said. "They have just implemented a two-tier education in a voucher model."

In the past, Premier Mike Harris promised not to bring in vouchers a system where students can use public funding to attend any school they want. And on Wednesday, Flaherty denied the credit is a voucher and said it will be of benefit to lower income families.

"Certain religious and cultural communities, where many of the families find the cost of sending them to religious schools is prohibitive, particularly if they have a number of children."

Flaherty also announced additional funding for post-secondary education and confirmed previously announced increases to the public education system.

Flaherty says support for colleges and universities will reach $293 million this year.

"In the fall of 2003, a record number of new university and college students will arrive on campus. There are three reasons for that. First, more young people are pursuing higher education than in the past. Second, the baby-boom echo will cause those numbers to swell. And third, all Grade 12 and OAC students graduate together for the first time," said the minister.

Flaherty also confirmed his earlier announcement of a one-time cash infusion of $60 million to build the Ontario Institute of Technology in Durham.