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Ontario Progressive Conservative Leader Tim Hudak speaks in Toronto on Jan. 13, 2014.FRED LUM/The Globe and Mail

Tim Hudak is proposing a sweeping plan to contract out government services and force public sector unions to compete with private companies to see who can do the work at the lowest cost.

With this move, the Ontario Progressive Conservative Leader is re-focusing attention away from controversial "right-to-work" policies with an anti-union measure likely to find broader support.

The plan is also an attempt to offer a solution to one of Ontario's most expensive problems: the costly provisions of the government's many labour deals. Premier Kathleen Wynne has taken steps to deal with the issue – earlier this week, she announced civil servants will have to pay a greater share of their retirement benefits – but Mr. Hudak's proposal goes far beyond anything the Liberals have tried.

"If you want the best services and you actually want to have people innovating and providing the best possible quality, there's nothing like a good old competition to do so," the Tory leader said at Queen's Park on Wednesday. "To actually put the best offers on the table for the best quality at the best price."

The PCs' Financial Accountability Act – which MPP Doug Holyday tabled on Wednesday as an amendment to Liberal legislation to create a budget watchdog – would order the new agency to review services and recommend what to outsource. The Tories pointed to information technology and some administrative jobs as examples. Health care professionals, teachers and police officers would be exempt.

Ms. Wynne slammed Mr. Hudak's idea.

"It's an attack on the gains that organized labour has made over decades and, in fact, would drive our work force to the bottom," she said in the legislature.

The Liberals have made some moves of their own to reduce labour costs as they try to dig the province out of a $12-billion fiscal hole. On Tuesday, they announced that, starting in 2017, retiring public servants will have to pay half the premiums for life, health, dental and vision benefits, which taxpayers currently cover in full. The government estimates the change will save more than a billion dollars over five years.

The Tories said public sector unions could continue performing contracted-out services if they could do them more cheaply than a private company.

Mr. Holyday said when he outsourced garbage as mayor of Etobicoke in the 1990s, his administration found a contractor willing to do the job with half the employees the union had. Mr. Holyday said the province could provide services for 25 to 30 per cent less cost than it currently does.

"To continue doing things the way they've been done just because that's the way it's always been done is wasteful, and needs to be changed," he said.

Economist Don Drummond, who wrote an extensive report on provincial cost savings, recommended contracting out at least some IT services. British Columbia, Alberta and Saskatchewan, he said, already do this.

Such precedents are likely to make Mr. Hudak's plan more acceptable than some of his previous anti-union proposals. While the Tory leader is keen to take on organized labour, which he says exacerbates the province's fiscal problems, some of his policies are controversial.

The so-called "right to work" plan – which would ban mandatory union dues – caused a rift in the Tories, with some members arguing it would cost votes in working-class ridings. In recent weeks, Mr. Hudak has stopped promoting right to work, referring to it merely as an idea for discussion.

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