TORONTO - Ontario's Liberal government has sailed about as far as it can go with New Democrats and may need a Progressive Conservative shoulder on the rudder, Premier Dalton McGuinty said Wednesday.

"I hope to have more opportunities to work with the official Opposition," McGuinty said of the PCs, after steering an amended budget through the minority legislature.

"A lot of people will tell you that if you are a Liberal government and you're leading a minority government, some days you're going to have to tack left and some days you're going to have to tack right.

"I'm hoping I'm not going to have to keep tacking only to the left for a number of years."

Tacking left has given Ontarians a budget with an NDP-proposed high income surtax, a freeze to planned corporate tax cuts, and modest increases to welfare and disability benefits.

New Democrats were also able to water down provisions in the budget on privatizing public services, arbitration and environmental approvals.

None of the changes were enough to satisfy NDP objections, though -- the third party allowed the budget to pass by abstaining.

The Liberals registered 52 votes in favour of the budget while the Tories mustered 35 votes against it.

PC MPP Jerry Ouellette was the sole absentee.

"We're reserving our right to be critical of the parts of the budget that we can't support," NDP Leader Andrea Horwath said.

"At the same time we think there are pieces that we are quite able to support."

PC Leader Tim Hudak was unapologetic about refusing to horse trade with the Liberals, ensuring a Grit-NDP budget compromise.

"You know if Dalton McGuinty were looking for someone to pick up the shovel to dig a deeper debt or somebody to help him take more money out of people's pockets ... that's not me," he said.

But Hudak said the Liberals might find him receptive in the fall if they do intend to revisit the arbitration changes the NDP rejected.

"We have a private member's bill on the table right now to fix a broken arbitration system," Hudak said.

As concessions to the New Democrats, McGuinty's budget cancels a corporate tax cut planned for July 1 and places a temporary 2% tax surcharge on Ontarians who earn $500,000 or more a year.
Both measures required an amendment to the Taxpayer Protection Act.