Nova Scotia's politicians spent the night debating the merits of a controversial government bill that would grant the governing Liberals the power to set public sector wages for the next four years.

The wage package is based on the offer members of the Nova Scotia Teachers Union rejected at the beginning of the month and civil servants were expected to vote on early in the new year.

Medical residents are the only group to have accepted that wage offer. There are fewer than 400 residents in the province.

Under Bill 148, wages would be frozen for the first two years of the contract with the province's 75,000 public sector workers. Those workers would then receive a three per cent increase over the remaining two years.

Maureen MacDonald, the interim leader of the NDP, moved a motion to hoist Bill 148. That means the proposed law would be shelved for six months to give the government time to reconsider moving ahead with the bill.

Wage restraint needed, says premier

Outside the chamber, Premier Stephen McNeil reiterated his government's position that wage restraint is needed to keep the province from falling even further into debt.

He also made it clear what spurred his government to bring in legislation now rather than wait for the province's largest public sector union — the NSGEU — to pass judgment on the wage offer.

"We needed to make sure that we were able to stay within the fiscal plan," he told reporters.

"There are a number that could potentially go to arbitration. We can't have, quite frankly, a third party — an unelected person — determine what is the province's ability to pay."

Opposition denounces Bill 148

Civil servants, doctors and road construction workers all have recourse to arbitration if contract talks fail.

A succession of opposition politicians have denounced Bill 148 as heavy-handed and unnecessary. Progressive Conservative leader Jamie Baillie has suggested it may also be unconstitutional.

"When a government has to resort to highly questionable legislation, it is a signature of failure in their ability to manage the public sector of this province," said Baillie.

"It is an admission of guilt and losing track of the finances of the province."

New Democrat MLA Dave Wilson, who is a former paramedic, took the premier to task personally for suggesting he would respect collective bargaining.

"He doesn't respect the process," Wilson said. "He comes in with legislation that hammers them over the head."

Physicians disappointed

The province's doctors issued a statement saying they were disappointed that the physicians' right to arbitrate is removed but are pleased the government left the door open for negotiations to continue.

"While we continue to believe that the negotiations process provides the greatest opportunity to find long-term solutions to our health-care system needs, I don't want to minimize the importance of the arbitration option," said Dr. David Milne, the president of Doctors Nova Scotia.

"We see this as a significant loss and an unnecessary and heavy-handed government tactic."

Milne says doctors will continue to negotiate in good faith.