TORONTO - As financial markets flounder and the provincial economy staggers, Premier Dalton McGuinty sought to reassure residents Tuesday that Ontario will exercise "prudence" through these uncertain times.

People are justifiably worried about the credit crisis south of the border, McGuinty said, but he vowed that residents won't be left without core programs.

"We will do everything necessary to be able to maintain programs that they have to be able to count on, like our schools, our health care and job training opportunities," McGuinty said.

Seniors in particular are concerned that their savings are eroding, he noted.

With Ontario's economy already strapped, uncertainty abounds about what Monday's rejection of a US$700-billion bailout plan for the United States banking sector will mean for the province, he said.

The nixing of the plan came the same day Ontario Finance Minister Dwight Duncan warned that "tough times" are ahead for Canada's most populous province.

Duncan said that despite slight growth in Ontario's gross domestic product of 0.3 per cent in the second quarter after a decline of 0.4 per cent in the first quarter, growing economic uncertainty remains troublesome.

McGuinty conceded that Ontario's economy is tightly linked to the U.S.'s, and he said some traditional manufacturing sectors will likely vanish forever.

Some analysts are warning that Canadians should brace for shock effects of the increasingly uncertain U.S. economy, even though stock markets shot back up Tuesday amid hopes the bailout plan could be salvaged.

McGuinty said he's confident Canadian banks are more stable than those south of the border, but added he'll wait for the experts to determine the potential impact of the rejected bailout plan on the province.

"The fall economic statement will ... speak to the need for us to be prudent at this particular point in time, given what is happening to our revenues and a very slow rate of growth," McGuinty said of the statement to be delivered Oct. 22.

"We have yet to see how these most recent events will impact on us in any direct sense."

Ontario has already lost more than 200,000 manufacturing jobs since 2002. On Tuesday, the Volvo group announced that another 500 jobs would be shipped from Goderich, Ont., to a U.S. factory.

McGuinty has frequently come under fire from the opposition parties for what they call a lack of competitiveness in drawing business, but the premier said other provinces have an easier time cutting corporate taxes because they get a better deal from the federal government.

He said other provinces have been able to bolster economic development programs and chop corporate taxes "using Ontario money."

But McGuinty said he didn't think the current economic crunch would make his so-called "campaign for fairness" from the federal government a tougher battle.

"I would argue just the opposite," he said. "I think Canadians are fair-minded people. I think they want to do what they know is the right thing to do."

In response to McGuinty's warning that parts of the traditional manufacturing sector are unlikely to rebound, Progressive Conservative Leader John Tory said he'd like to see "a more positive attitude."

"What he's got to do is get off his backside and make this the most attractive place in the world for manufacturers to invest," Tory said.

NDP critic Peter Kormos said it was "incredibly regrettable" that McGuinty was "resigned" to the job-loss crisis in Ontario.

"The McGuinty government has done nothing by way of policy development to save, protect or restore industrial manufacturing jobs. Mr. McGuinty appears resigned to Ontario becoming a Third World economy with minimum-wage jobs."

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