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Ontario Finance Minister Dwight Duncan is scrummed by the media after the 2012 provincial budget vote at Queen's Park in Toronto on April 24, 2012.

Nathan Denette/THE CANADIAN PRESS

The Ontario government would have broad powers to impose collective agreements on public sector workers, under proposed wage-freeze legislation.

Finance Minister Dwight Duncan announced on Wednesday that the latest restraint measures would generate savings of $2.8-billion over three years for the cash-strapped province.

"A compensation freeze would protect the jobs of thousands of hard-working Ontarians," Mr. Duncan said. "We are focused, more than ever, on eliminating the deficit."

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Public sector workers in Ontario who bargain collectively would have their wages frozen for two years. However, firefighters, police officers and other municipal workers would be exempt from the legislation.

The proposed legislation is aimed at setting the stage for the government to target other public sectors as part of a plan to rein in compensation and reduce the province's deficit of $14.8-billion.

Premier Dalton McGuinty said earlier this month that his government will call upon all public-sector workers to be "part of the solution" by voluntarily agreeing to freeze their wages for two years.

The legislation makes good on that warning. If workers don't voluntarily agree to a freeze, the government can either send them back to the negotiating table or impose an agreement on them.

The legislation would be similar to a new law freezing wages and banning strikes for the province's elementary and secondary teachers, which came into force this month.

Last week, the government announced that it plans to permanently cap the annual pay of future top executives at hospitals, universities and other public sector entities at $418,000 to set an example for rank-and-file employees.

Under the proposed legislation, chief executive officers would have their pay capped at two times the salary of Premier Dalton McGuinty, which is currently $209,000. The legislation would not apply to existing executives, many of whom make more than $1-million a year. In all, 150 employees in the broader public sector are above the $418,000 threshold.

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Collective bargaining agreements that were recently negotiated would not be captured by the legislation. However, these groups would be subject to a freeze in their next round of bargaining.

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