The federal public service's largest union has walked away from the bargaining table, the first step toward a strike that could potentially see 90,000 workers off the job later this year.

The Public Service Alliance of Canada has declared an impasse at the bargaining table, and has rejected a separate proposal the government was offering to compensate public servants for stress caused by the disastrous Phoenix pay system.

"If we can't get this done by June, by the time the House of Commons rises, then we're looking at continuing on with the impasse process and looking towards a possible strike mandate later on this year," PSAC president Chris Aylward said.

The government was offering annual pay raises of 1.5 per cent over the four-year contract. Aylward said that increase won't even keep pace with inflation, and lags behind the raise members of Parliament are set to receive.

"If we were to accept that, we would be falling simply further and further behind," he said.

The two sides will now enter into what's known as a public interest commission process, under which a three-person panel will examine the dispute and write up a report. That could take months, but seven days after the report is issued, the union can hold a strike vote.

PSAC president Chris Aylward said his union wants a much better deal from the government and won't return to the bargaining table unless a serious offer emerges. (Matthew Kupfer/CBC)

'A disappointing development'

Treasury Board spokesperson Martin Potvin said the government is negotiating in good faith, and hopes to get the union back to the table.

"While PSAC declaring impasse is a disappointing development, we believe that productive conversations can continue through negotiations and are open to returning to the bargaining table, at any time," Potvin said in an email.

Potvin said the government reached an agreement with nearly every public service union in the last round of negotiations, and is confident it can do the same this time.

"We're committed to bringing that approach to the current round of bargaining," he said.

Phoenix offer not enough

Several other major unions accepted the government's offer for Phoenix compensation, which would have given most public servants five days of paid leave for the disruption and stress caused by the system's widespread failure to pay employees properly, on time, or in some cases, at all.

It would also have set up a new process to allow public servants who have faced late payment charges or missed out on investment opportunities because of Phoenix to file compensation claims.

But Aylward said it's simply not enough.

"They obviously have no concept as to what our members have truly gone through," he said. "The anxiety that this has caused regarding, you know, getting up every Monday ... and wondering, am I going to get paid this week?"