Toronto's annual Caribana festivities kicked off Tuesday at Yonge-Dundas Square after its launch was forced to move locations because of a weeks-old city worker strike.

Caribana celebrations have been launched at Nathan Phillips Square for the past 42 years but striking municipal workers have been picketing in front of City Hall for more than three weeks, forcing the party elsewhere.

Organizers of the Caribbean fest say the move cost them about $10,000.

There are fears the strike could scale down Caribana events, which typically draw about a million people from all over North America to Toronto.

Caribana's king and queen competition and the Pan Alive competition could be cancelled, as they are both held at Lamport Stadium -- a city-owned facility that striking city workers are regularly picketing.

If that happens, Island Foods at Dufferin and King Street West, a popular Caribbean eatery, will take a hit. It sells the most during Caribana during the three days when Lamport is hosting events.

The Olympic Island party is also in jeopardy as the strike has halted all ferry services to the Toronto Islands.

However, Joe Halstead, the chair of the festival management committee, said he's optimistic that everything will work out at the end. Organizers have been eyeing Ontario Place as an alternative destination.

"We are quite positive. We are not cancelling any events," he told CTV Toronto at the launch party. "I am very pleased to tell you we are not cancelling any events and it will work out very well for us."

Garbage pick-up is also a huge issue this year for festival organizers. The strike, which involves about 24,000 city workers, has frozen city services for the past three weeks including garbage pickup.

Halstead says he is hoping volunteers will come through and that city management will work with the organization to come up with a solution much like they did for the Pride parade held in June.

Ontario Premier Dalton McGuinty said Tuesday he is seeing signs that progress is being made between city management and the two unions representing inside and outside workers.

McGuinty said the city and the workers have made it clear that they want to go back to work and that's why back-to-work legislation isn't necessary.

With a report from CTV Toronto's Reshmi Nair and files from The Canadian Press