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Ontario Finance Minister Dwight Duncan.

The Ontario government is rejecting accusations that it's driving up the cost of policing.

Finance Minister Dwight Duncan says he disagrees with complaints from the civilian body that oversees Toronto police, which claims his government's generous wage hikes and benefits to the Ontario Provincial Police are causing expensive municipal contracts.

Mr. Duncan says the increase to the provincial police is simply a way to catch up with other police forces.

Premier Dalton McGuinty also stuck by his statement that the province's collective agreements came in below federal and municipal settlements - the very stance that initially angered Toronto Police Services Board chairman Alok Mukherjee.

In his letter to Mr. McGuinty, Mr. Mukherjee says provisions like wage hikes that will make the provincial police the highest paid police officers in the province weakens municipalities' bargaining positions.

The province is already under fire over a deal that would grant a three per cent pay hike to about 34,000 Ontario civil servants after the fall election, despite an earlier promise to freeze public sector wages.

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