Ontario budget 2016: Kathleen Wynne tries to find carbon pricing 'sweet spot'

A day after Finance Minister Charles Sousaunveiled theLiberal government's 2016 provincial budget, Premier Kathleen Wynneis getting down to the tough business of selling itto Ontarians. These include students, seniors, business owners andeveryone who has to fill up agastankorheat ahome.

• What's going to cost you more after Ontario's latest budget
• Low-income seniors, students get relief in Ontario budget

We've overachieved on our targets every single year and there's every reason to believe that we'll be able to do the same thing next year.- Ontario Premier Kathleen Wynne

The budget contains some major components, including free college and university tuition for low-income families and a cap-and-trade system to combat climate change.

CBC Radio Metro Morning guest host Helen Mann spoke withthe premierfollowing Sousa'sbudget speech about the provincial debt, changing costs for seniors, the Hydro One saleand what the premier would fund if there were more money in the budget.

Your debt-to-GDP ratio is still just under 40%. Are you concerned about the province's long-term credit rating being downgraded?

I don't have control over the bondrating agencies. I think that as they look at our plan, they will see that it's credible. They will see that we're one year away from eliminating our deficit,which is exactly what we said we were going to do and we're on track to do that.

How confident are you that you're going to be able to do that?

I'm very confident ...We've overachieved on our targets every single year and there's every reason to believe that we'll be able to do the same thing next year.

We're outperforming other parts of the country and that's because we've been making these investments ... [The] unemployment rate is lower than the national average, our economic growth is going to lead and that's because we've been making the investments that we said we were going to make.

What wasn't working about the way that the province was funding post-secondary education before?

What we heard from students is that there were still low and middle-income students who looked at the cost of tuition and the living costs associated with college or university and the sticker shock was just too much. They didn't even apply.

We've reorganized the way the grants work so students living in families of $50,000 or less and will actually have more than their tuition costs covered. That's the kind of change that we know is going to mean more students, more young people will go into college and university.

• New grant will cover average tuition for low-income students

How do you respond to critique from the Conservative finance critic that taxes are going up on alcohol, tobacco, gasand home heating, but tax credits that help seniors and families are being cut?

I think he's not looking at the whole picture. The fact is that 170,000 more seniors are not going to pay anything for their drugs. We looked at the way that medicine was being allocated and we said there were too many seniors on low income who were having to pay. They're not going to have to pay anything.

What about higher co-payments, drug dispensing fees going up a dollar? Why should seniors have to pay more?

What we know is that there are people who need supportmore than others: low income students, low income seniors need that support ... I think that's the kind of evidence-based change that needs to happen and I think people understand that.

• More seniors to qualify for low-income drug program

You've increased funding for hospitals after a four-year freeze, but given inflation and a growing economy, some critics would call that cuts. How do you respond to that?

If you look at the money that we've put into home care and mental health supports, the overall budget has gone up every single year. But this year, we're increasing hospital budgets, as well.

Why not focus more on the issue of hospital care for the aging population?

We have to continue to put money into community care because there are more seniors who want care at home and even if they are in the hospital for a period of time, they want to be able to go home There are many, many demands when it comes to health care and what we're trying to do is target those needs.

Critics are saying that you haven't priced carbon high enough to make a significant difference. What do you think about that?

We're trying to find that sweet spot because there is another chorus of voices who say we shouldn't be doing this at all, it's hard on businesses. We know we have to tackle climate change, there is no doubt about that ... we're bringing in a system that's consistent with what's happening in Quebec, California, Manitoba.

• Liberals' cap and trade expected to generate $1.9B

Are you still planning on moving forward to sell off your majority stake in Hydro One?

We've committed to a $137 billion in infrastructure investment We can't do that unless we have the resources, unless we have the funding to make those investments. Part of that is taking an asset, Hydro One, broadening the ownership in that asset and repurposing those dollars for new assets for the 21st century It will be a better-run company.

Will that impact electricity prices?

The reality is that the way electricity prices are set now is by the Ontario Energy Board. That's exactly how they will be set after that. So that kind of fear is not realistic.

If you had the extra money to invest in onething, what would it be?

We have a plan to reduce chronic homelessness in Ontario. I think I'd like to be able to move more quickly to build all the affordable housing we need. My hope is that the federal government will be able to support us in that.

This interview has been edited and condensed for clarity and length.