In a bid to rein in spending, Premier Doug Ford is threatening to impose a cap on pay hikes for 1 million public servants.

Ford’s Progressive Conservatives on Wednesday tabled legislation that would limit annual wage increases to 1 per cent when current contracts expire — some of which remain in place for another three years.

The austerity move would not take effect right away because the legislature is rising for the summer on Thursday so, barring an emergency session in July or August, the bill cannot become law until the fall.

It does, however, send a signal to public-service unions about to enter into negotiations with the government — including teachers and school support staff — that belts will be tightened. And it sets up a legal battle with unions, which say the legislation infringes on bargaining rights.

“If we did not take this action thousands of jobs could be at risk,” Treasury Board President Peter Bethlenfalvy said, although he was unable to pinpoint how much money the government will save.

The legislation, which unions are vowing to challenge on constitutional grounds, also impacts universities and colleges, hospitals and long-term-care facilities, among others, although 250,000 municipal workers are exempt. The government also retains the power to exempt contracts from the restrictions.

Caps in the proposed Protecting a Sustainable Public Sector for Future Generations Act ensure increases in public-sector wages “reflect the fiscal situation of the province,” Bethlenfalvy added, calling the 1 per cent limit “fair and reasonable.”

The bill will go to a legislative committee for study this summer and be up for public comment.

“We will not be rushing it through,” Bethlenfalvy said as MPPs prepared to leave on their summer break.

Still, the legislation will be top of mind as teacher unions bargain new contracts as their existing agreements expire at the end of August.

NDP Leader Andrea Horwath accused Ford of “taking drastic action without any attempt to negotiate in a professional or respectful manner.”

“He’s taking aim at working people in our province — at the people who educate our kids, keep our roads safe and work in our hospitals taking care of our loved ones,” she said.

Ford is “setting the stage for instability that Ontario doesn’t need,” added Green Leader Mike Schreiner.

The wage restraint was announced almost two months after Finance Minister Vic Fedeli tabled the biggest budget in Ontario history — a $163.4 billion fiscal blueprint earmarking $4.9 billion more in expenditures than the previous Liberal government.

Despite the big spending, the Tories are scrambling to limit future costs.

The bill, which passed first reading 64-40 on Wednesday, will not reopen any existing contracts, but the cap will be retroactive in any new agreements signed before it passes.

Some education unions have already begun preliminary talks with the government and school board associations to hammer out what issues are handled in provincial-level talks — typically big-money items — and what’s to be bargained with individual boards in the two-tier bargaining system.

However, the Ontario Secondary School Teachers Federation says the two sides are already at an impasse with the province and school boards, which are “proposing a more extensive list of central items (than the OSSTF) is willing to agree to” such as notes for sick-days.

OSSTF President Harvey Bischof said the wage-cap legislation “means that the government’s claim to be coming to the table in good faith is an absolute sham.”

The Ontario Public Service Employees Union (OPSEU) said Ford’s cap is to help offset the up to $1 billion in financial penalties to the Beer Store that the Conservatives will have to pay to liberalize booze sales.

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“Who’s he coming after next to pay for his stupid buck-a-beer and beer in corner stores?” said OPSEU president Warren (Smokey) Thomas, who represents 155,000 workers. “This boondoggle is going to cost taxpayers. Everything he’s doing is on the backs of workers.”

Thomas warned his union is consulting its lawyers about the constitutionality of imposing a cap and noted average wage settlements in the public sector have been around 1.5 to 1.7 per cent, roughly the inflation rate.

The dramatic move by the Ford government comes two months after Bethlenfalvy asked public-sector workers to temper their wage expectations or risk legislation to keep the $72-billion provincial payroll “sustainable” in Ford government’s fight to eliminate annual deficits within five years.

Major contracts with the government’s two major unions, OPSEU and management and professional employees in AMAPCEO, don’t expire until 2021 and 2022 respectively.

Public service wages were frozen from 2012 to 2016 to help the previous Liberal government balance the budget in 2017.

The Tories, who were in office from 1995 until 2003, also introduced austerity measures and, in 1993, a New Democratic government imposed a wage freeze and mandatory unpaid furloughs — known as Rae Days after then-premier Bob Rae — for public servants.

Every increase of 1 per cent in compensation to public servants adds $720 million to the government’s costs.

Like OPSEU, the Ontario English Catholic Teachers’ Association said it will take legal action if necessary.

“But this is not just about us — it is about every worker in the province,” said president Liz Stuart. “The government is attempting to pit Ontarians against one another.”

The proposed legislation does not apply to doctors under the physician services agreement with the Ontario Medical Association. It does allow for merit pay as well as for employees — such as teachers — to continue to receive raises as they progress through a wage grid based on qualifications and years of experience.

Public-sector compensation in the province is more than $72 billion a year — about half of all government spending — and provincial government workers earn an average of $64,000 a year.

Liberal MPP Mitzie Hunter (Scarborough-Guildwood) said Ford is trying to distract voters from the outcry over its decision to rip up its contract with the Beer Store.

“Once again, they’ve fumbled the ball.”

Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie

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