McGuinty urges Ontarians to spend this Xmas

TORONTO - Ontario families should go out and do their Christmas shopping if they don't want the province's ailing economy to get any worse, Premier Dalton McGuinty said Thursday.

Many people are "feeling the pinch" during the current downturn and are worried about their jobs and savings, he acknowledged.

But if they refrain from buying holiday gifts, for example, they could "unwittingly" add to Ontario's economic troubles, McGuinty said.

"I know we've got to take steps at home and we've got to be prudent and we've got to be careful and that's understandable," he said after visiting a pharmaceutical firm in Pickering, east of Toronto.

"But if you don't buy that car -- even though you can actually afford it -- if you don't buy that fridge, if you don't shop at Christmas time, it can actually put us in a bit of a downward spiral."

McGuinty said he's not trying to tell families not to be prudent and responsible, but they should be aware that about 60 per cent of the economy is connected to consumer spending.

He made the remarks after speaking about the hardship many families will be facing now that auto parts maker Magna International is planning to close two Toronto-area plants, with the loss of 850 jobs.

It's the latest blow to the Ontario's manufacturing industry, which has lost hundreds of thousands of jobs in recent years.

Opposition parties pounced on McGuinty's remarks as further evidence that the premier is "out of touch" with ordinary people who fear they'll soon have to join the unemployment line.

The premier's advice is "just as crass and bizarre" as U.S. President George W. Bush telling Americans to "get out there and shop" after the terrorist attacks of Sept. 11, 2001, said NDP Leader Howard Hampton.

"It's insulting to people who may not have enough money to pay their hydro bill this month, who may not have enough money to put food on the table for their kids," he said.

It also shows that McGuinty has no clue how to lift the province out of its current economic problems, said Progressive Conservative Leader John Tory.

"People are not shopping because they either don't have money or they think they might lose their job and won't have money -- it's as simple as that," he said.

"He should get going on protecting and keeping and creating jobs, and not telling people how to shop and when with money they don't have."

Once the economic engine of Canada, Ontario will become a have-not province for the first time next year when it starts collecting federal equalization payments.

The Liberal government has already warned it will run a $500-million deficit this year, breaking an election promise to balance its budgets.

That figure could grow if the province decides to help its struggling auto sector.

Both McGuinty and Finance Minister Dwight Duncan have confirmed aid is needed from the province as well as the federal government to help automakers, but they have yet to announce any formal plan or timetable.

The Big Three Detroit automakers are seeking US$25 billion to help them survive the worst sales downturn in 25 years, and it's still unclear what portion of that bill Canada and Ontario could end up footing.

The Conference Board of Canada estimates the Canadian auto sector -- an industry that's almost exclusively concentrated in Ontario -- will lose 15,000 jobs by the end of 2009.