Ontario's government has introduced legislation to cap public sector wage increases at an average of one per cent annually for the next three years.

The legislation, called the Protecting a Sustainable Public Sector for Future Generations Act, was tabled by the majority Progressive Conservatives on Wednesday afternoon.

The new wage cap would include teachers and staff at post-secondary institutions and hospitals. It will affect both unionized and non-unionized workers.

"This is really good news for our public sector workers, because we are protecting jobs today," said MPP Peter Bethlenfalvy, president of the Treasury Board. "If we did not take this action, thousands of jobs could be at risk."

If passed, the bill will "ensure that increases in public sector compensation reflect the fiscal situation of the province," he told the legislature earlier Wednesday.

The PCs expect to launch a website and host consultations about the plan over the summer.

The legislation comes after the government hinted at the possibility of a wage freeze earlier this spring.

Peter Bethlenfalvy, right, said the government will host consultations this summer before passing the legislation. (Lorenda Reddekopp/CBC)

'Drastic action'

The Tories, under Premier Doug Ford, have said that limiting raises will help the province lower its estimated $13.5 billion deficit.

Ontario currently spends around $72 billion annually on public sector compensation.

The PCs have already frozen the salaries of public sector executives who earn more than $100,000.

NDP Leader Andrea Horwath said the wage freeze is the latest in a series of damaging policies to emerge from Ford's office. She highlighted the government's recent cuts to health, child care and ambulance services.

"Today, once again, we see Doug Ford acting like he's the king of Ontario, taking drastic action without any attempt to negotiate in a professional or respectful manner," she said.

Horwath went on to accuse Ford of targeting public sector workers because "he doesn't value the services that they provide."

Statistics Canada reported that the national inflation rate reached two per cent in April.

'Creating instability'

Smokey Thomas, president of the Ontario Public Service Employees Union, raised the possibility of a charter challenge, saying the legislation violated unions' ability to bargain collectively.

He also said unions are already preparing to protest.

"I think they're going to have a long hot summer," he said. "My union and others, we'll target all those Tory MPPs and their constituency offices, all their fundraisers, all their golf tournaments, all their barbecues — we'll screw every one of them up."

The government's legislation comes after the province recently started the bargaining process with the largest teachers' unions ahead of an Aug. 31 contract expiry.

The president of the Ontario Secondary School Teachers' Federation said he was at the bargaining table Wednesday, but learned of the legislation on Twitter. Harvey Bischof said he will now have to assess if bargaining will continue.

"It's a complete undermining of the good faith bargaining process," he said. "You can't sit down and negotiate when they hang legislation over your head. That's not coming to mutual agreement. They are in the process of creating instability in the system by taking this approach."

Unions calling talks a 'sham'

The Elementary Teachers' Federation of Ontario filed its notice to bargain just two days prior, and said the government is using the legislation to bully its members into a certain outcome.

The province began wage consultations with the public sector in April, but unions are calling those talks a "sham."

Recent public sector wage increases have averaged 1.6 per cent a year and the average employee makes $64,000, government officials said.

The legislation would apply for three years upon the expiration of a collective agreement and doesn't affect current agreements.

Thomas said most of the major deals with his union, including the public sector, don't expire for several years.

The bill would not prevent merit-based raises, or increases for years of service or if an employee completes a program or other professional certification.