Canada

Ontario Premier Dalton McGuinty surprised political observers by announcing he has prorogued the legislature and will step down as party leader.

McGuinty made the surprise announcements to an emergency meeting of the Liberal caucus after his government faced a second contempt motion over two cancelled power plants.

He says there was little hope of getting the public sector wage freeze the minority government needs to trim the $14.4-billion deficit because the opposition parties are opposed, so he adjourned the legislature to allow time for negotiations.

McGuinty also says after 16 years as Liberal leader and the past nine as premier, it's time for new blood to take over.

He told the caucus the Liberals have made some mistakes in government, but got the big things right in education, health care and the environment.