TORONTO — Ontario's Conservative government is being forced to withdraw $1 billion from its reserve and contingency funds because of the economic impact of SARS, Finance Minister Janet Ecker said Tuesday.

Ecker, who released her first-quarter economic statement at the Ontario legislature, said the province's two rainy-day funds currently contain $1.7 billion, but will be depleted to $700,000.

"The impact of SARS is something that was unique, unusual," said Ecker. "It is not something one goes through, thank heavens, on a regular basis and that's what contingency and reserve funds are for."

To offset the depletion of those funds, Ecker reiterated what the Ontario Tories have been saying for months: the federal government must provide more funding for health care to cover the high cost of combating severe acute respiratory syndrome.

"They have a responsibility here too," said Ecker. "When the federal finance minister stands up and acknowledges that the economy for the country has been impacted by SARS and then for the federal government to turn around and say we don't think it is a crisis for Ontario, that defies belief."

In Ottawa, Prime Minister Jean Chretien said if Ontario didn't want the $250 million in federal money offered to cover SARS-related costs, there was nothing he could do.

"On SARS, we've done a very good job -- as much as we could," Chretien said after a cabinet meeting. "It was a very difficult problem and we worked in great collaboration with the governments."

"We have made an offer -- a very substantial offer of money to the Ontario government. But they don't want to take the money, so it's not my fault."

Despite the health-care costs of SARS and its impact on tourism, Ontario's economic growth is still expected to average 2.9 per cent this year, Ecker said.

"The Ontario economy is very strong, very resilient and quite capable of bouncing back from challenges," said Ecker, who pointed to the example of the province exceeding growth expectations during the fiscally challenging period following the Sept. 11 terrorist attacks in the U.S.

The government also contends that it will be able to keep pace with the funding commitments it made in the budget, including money for education and job creation.

Ecker's statement comes as Premier Ernie Eves prepares to call an election, possibly by month's end.

Ecker's revelation that revenues in the province decreased by $127 million but spending increased by over $1 billion reinforced the opposition's belief that there is no possible way Ontario will balance its budget.

Critics say the Tories are running a deficit as high as $5 billion and are making pre-campaign spending commitments they can't afford, including the promise of more tax cuts.

"If they don't call an election soon they are going to have to bring us back in September and bring forward a whole new budget so that we can deal with the multi-million dollar deficit we are dealing with here," said Marilyn Churley, NDP critic. "What I heard today just reinforces the feeling you just can't trust Ernie Eves," said Liberal critic Monte Kwinter. "This government is irresponsible. When the federal government offered them $250 million for SARS, I agree that I don't think it is adequate, but what they should have done is taken that money and continued to fight."

In the March 27 budget, the government also said it would sell $2.2 billion in unidentified assets. So far, only Teranet, a land registry system, has been sold for $370 million.

The government has also indicated it wants to find $800 million in savings across all ministries.

Leah Casselman, president of the Ontario Public Service Employees Union, said that those savings would require eliminating at least 10,000 public service jobs.

"The fat is gone, much of the muscle is gone, and many of the limbs have been amputated," Casselman said in a release. "As citizens, we are paying the price in reduced services."

Ecker said that without the funding from the federal government, Ontario will dig deeper into its already shallow pockets.

"If we need to find additional savings, we will do so because at the end of the day the budget must remain balanced," said Ecker.

Eves has not ruled out a Sept. 18 election.