Ontario's new Liberal government has frozen auto insurance rates effective immediately. Premier Dalton McGuinty made the annoucement shortly after he and his cabinet were sworn in.

"We've instructed the minister of finance to take all necessary steps so we can freeze auto insurance rates effective today," McGuinty told a news conference.

McGuinty said Ontario's new Finance Minister Greg Sorbara had been instructed to do whatever is necessary to freeze rates immediately.

McGuinty said he will know by next week what Ontario's fiscal health is, once the report by former provincial auditor Erik Peters had been released.

"We're looking forward to the report from Erik Peters .... That will obviously influence the pace at which we proceed to deliver on our commitments but we will proceed none the less."

The Liberals are prepared for a deficit of up to $2 billion, but the Fraser Institute, a right-wing think tank, claimed during the election campaign that the deficit could be as high as $4.5 billion.

McGuinty never mentioned the Oak Ridges Moraine controversy in his brief press conference. Over the weekend he said he would move to stop development on the environmentally sensitive area where developers were rushing to build houses.

Asked about his cabinet appointments, McGuinty said building a cabinet was more art than science. He simply tried to match up people with the challenges the portfolio would likely offer.

One of the new ministries is childrens' services. Marie Bountrogianni (Hamilton Mountain) was tapped to head it.

McGuinty described her as very capable, adding, "she understands how important this ministry is to me."

McGuinty became the 24th premier of Ontario Thursday morning. It ends a 13-year absence of Liberals from the government benches. Conversely, it will be the first time since 1995 that Ontario won't be governed by Progressive Conservatives.

"I, Dalton McGuinty, swear that I will duly and faithfully and to the best of my skill and knowledge, execute the powers and trust reposed in me as premier and president of the executive council and minister of intergovernmental relations, of the province of Ontario," he read out, wearing a dark suit and striped tie.

The 48-year-old McGuinty's face tightened as he read the words.

After his cabinet was sworn in, he told Ontarians his government will "starve cynicism and feed hope."

Former premiers Bob Rae, David Peterson, Bill Davis -- and outgoing premier Ernie Eves, whom McGuinty defeated -- were among those to witness the handover of power.

The Health portfolio was given to Smitherman, a Toronto-area member who was elected in 1999. Smitherman was the Liberal point man in attacking the Tories during the election. He said he wants to restore confidence in public health care.

Gerard Kennedy, one-time head of Toronto's Daily Bread food bank, is education minister. The Liberals have promised to shrink class sizes and raise the drop-out age from 16 to 18. Kennedy said one of his first acts will be to cancel a private school tax credit created by the Tories.

Here are the other appointments to cabinet, which observers have called a good mix of veterans and newcomers:

• Gerry Phillips -- Chairman of Management Board
• Dwight Duncan -- Energy
• Michael Bryant -- Attorney General
• Steve Peters -- Agriculture
• Marie Bountrogianni -- Minister of Citizenship, head of a new Children's Services Ministry
• David Ramsay -- Natural Resources
• Monte Kwinter -- Community Safety
• Jim Watson -- Consumer and Business Services
• Harinder Takhar -- Transportation
• Christopher Bentley -- Labour
• Mary Anne Chambers -- Training, Colleges and Universities
• Sandra Pupatello - Community and Social Services
• Leona Dombrowsky -- Environment
• Madeleine Meilleur - Culture, Francophone Affairs
• John Gerretsen -- Municipal Affairs
• Joe Cordiano -- Economic Development and Trade
• Rick Bartolucci -- Northern Development and Mines
• Jim Bradley -- Tourism and Recreation
• David Caplan -- Public Infrastructure and Renewal

There are 23 ministers, down from 26 under the Tory government. The Liberals were elected in 72 of the 103 ridings. There are eight Toronto MPPs in cabinet plus an additional three from the Greater Toronto Area.

Dave Levac will be Chief Government Whip.

On Wednesday, McGuinty announced Liberal backbenchers will take part in powerful cabinet committees. NDP critic Peter Kormos called the move an attempt to "muzzle" backbenchers.

As for Eves, he has named Bob Runciman as house leader, while former education minister Elizabeth Witmer will serve as the party's deputy leader.

Jim Flaherty, who finished a close second to Eves in the last Tory leadership race, wasn't on the list.