Finance Minister Dwight Duncan has made a new jobs retraining program and modest business tax cuts his weapons of choice for helping Ontario fight the impact of a slowing U.S. economy.

Duncan's provincial budget released Tuesday outlines a three-year, $1.5 billion plan to help train more apprentices, boost financial aid for students and help retrain 20,000 unemployed Ontarians.

Ontario Finance Minister Dwight Duncan says cities could get more funds from the province this summer.
(CBC)

It also includes business tax cuts worth $750 million over four years, including a retroactive cut to the capital tax that Duncan says will immediately give manufacturers $190 million.

Duncan defied a demand from his federal counterpart Jim Flaherty to sharply cut corporate taxes in the wake of grim economic forecasts.

He says his government has chosen a more comprehensive plan to cope with the slowdown.

That includes boosting spending on health care by six per cent to more than $40 billion in 2008-09 — a move Duncan says will help Ontario attract business investment.

The budget also includes a previously announced $1 billion plan to help municipalities fix aging roads and bridges and improve transit systems in greater Toronto and Hamilton.

But a projected $600 million budget surplus falls short of the threshold the government said was needed in order to be able to share the wealth with municipalities.

Duncan says it's "likely" cities will get extra funds when the books for fiscal 2007 are closed later this summer.

$63M to clean up PCBs

Despite calls from environmentalists for Ontario to direct the bulk of its infrastructure spending to public transit projects and to reduce reliance on nuclear energy, the province's financial plan for the environment focuses instead on reducing toxic emissions and providing tax incentives for energy efficiency.

It will spend $41 million on a four-year plan to reduce toxic emissions, $10 million over four years to help ban the use of non-essential pesticides and $63 million to clean up PCB-contaminated soil, most of it in London.

To promote energy conservation, the government is extending its Retail Sales Tax exemption on qualifying household appliances and light bulbs until the end of August 2009. It will spend $7.5 million to support research into chemicals and fuels made from agricultural products and $25 million on a centre of research and innovation in the bio-economy, to be located in Thunder Bay.

The province will also provide $100 million to rehabilitate social housing units by, in part, making them more energy efficient.

Budget offers mere 'morsel' to businesses: Tory 

Ontario's opposition parties said Tuesday's budget doesn't do enough to help the province's struggling economy and manufacturing sectors.

Ontario's economy is in trouble, and the Liberal government's budget doesn't do anything to help, Progressive Conservative Leader John Tory told reporters after the budget announcement.

"We're in a situation where Ontario's tax and spend and regulatory policies are chasing jobs out of Ontario and failing to attract the ones we need," he said.

Finance Minister Dwight Duncan offered a mere "morsel" to businesses, Tory said, and provided no tax cuts for individual taxpayers and families.

Broader-based tax relief would have done a better job of attracting investment to Ontario, the opposition leader said.

NDP Leader Howard Hampton, meanwhile, said the budget "overwhelmingly underdelivers and shortchanges" the people of Ontario.

"The child nutrition program will provide $1 per week; the dental plan provides for $90 per child per year," Hampton said.

The budget didn't do nearly enough to stem the tide of job losses in the manufacturing sector, he added.

Hampton also criticized the budget's investments in long-term care, saying the small boost in funding will only buy an extra six minutes a day of nursing care for seniors.

The Liberals are promising $107 million over the next three years to hire 2,500 personal support workers in nursing homes; an increase of 2,000 nurses for nursing homes over the next four years; $278 million over three years for various as yet unspecified long-term care programs; and $700 million over three years for home care and other services for seniors still living at home.