Blaming the recession for Ontario's record $24.7 billion budget deficit, Premier Dalton McGuinty admits his cash-strapped government is actively considering the sale of Crown assets like liquor stores, casinos and the electricity system.

Although he once campaigned against similar moves by previous Progressive Conservative administrations, McGuinty said Wednesday that changing his mind might be the "right thing to do."

It would be the second time this year he's done a major policy U-turn. In March, he agreed to harmonize the provincial sales tax with the federal GST into the 13 per cent HST, which he once opposed.

"We've got a responsibility to look at all our assets to make sure we're getting the best bang for the buck and especially now in the context of a global recession and a significant deficit," the premier told reporters.

"I'm not scaring anybody. Given the season, nobody wants to scare anybody."

Reminded of his past opposition to the 1999 sale of Highway 407 for $3.1 billion as a "fire sale," McGuinty replied: "Did I say that?"

In fact, he criticized the sale in May 2003, saying: "The Harris-Eves government sold the 407 at a fire sale price. Not only did they sell out taxpayers who owned the highway, they sold out 407 users."

McGuinty also opposed a Tory scheme to sell off Hydro One in 2002. "I will not move to privatization," he pledged at the time.

Critics maintain asset sales bring money up front but forgo an ongoing revenue stream – $1.4 billion in the case of Ontario's 610 Liquor Control Board of Ontario stores and, for example, $133 million in taxes paid by Ontario Power Generation alone.

"Look what happened with 407. We got the quick cash and now we're paying for it through our noses day in and day out. That's the same thing that's likely to happen," warned NDP Leader Andrea Horwath, referring to fees on the GTA toll highway.

"There is absolutely no mandate this government has to sell off public assets, just like there was no mandate for the harmonized sales tax, and it's disconcerting," she said.

Progressive Conservative MPP Peter Shurman (Thornhill) blasted the Liberals for "a panic-driven fire sale strategy."

"It's not principled. What it's about is a $25 billion deficit of Dalton McGuinty's creation," said Shurman, labelling it another "broken promise" by the Liberals.

McGuinty countered that if voters don't like what he's doing they could toss him out of office in the 2011 election.

"People get to make a judgment."

Finance Minister Dwight Duncan confirmed two investment banks were approached earlier this month to investigate selling public assets – even as he and Transportation Minister Jim Bradley attacked the Tories in the Legislature last week over the 407 debacle.

"We routinely look at the value of our assets. There's a considerable amount of public capital tied up in these assets," Duncan said.

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"Are we getting an adequate return from our gaming operations? Are we getting an adequate return from the LCBO?"

Duncan conceded he did not know the return on equity for the Ontario Lottery and Gaming Corporation or liquor stores, or what might be a more appropriate target.

The asset evaluation is the latest trial balloon from a government scrambling to find savings for the spring budget.

Earlier this fall, McGuinty considered "Dalton Days" – unpaid furloughs for civil servants – before rejecting the idea.

The premier said no one should jump to conclusions on the planned asset evaluation by CIBC World Markets and Goldman Sachs.

Added Duncan: "Even if you get to the point where you make the decision ... you may not get the deal you want. You may not get a deal that's good for taxpayers."

The Liberals have yet even to sign any contract with the two investment banks so no review has actually begun.

With more than half the provincial budget dedicated to the government's two priority areas of health care and education, it's not surprising asset sales are under consideration, said Sandford Borins, a professor of strategic management at the University of Toronto's Rotman business school.

"There's not a lot left," said Borins.

McGuinty has always adamantly opposed privatizing Ontario's liquor monopoly and used to lambaste officials in the previous Conservative government whenever they mused about selling it.

In 2005, the Liberals shelved a $600,000 report they commissioned, which recommended the selling off of the LCBO, just 30 minutes after a blue-ribbon panel submitted its findings.

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