TORONTO -- Ontario's cash-strapped Liberal government moved Thursday to hold the line on salaries for senior public sector executives as a "symbolic" sign of fairness before it legislates a pay freeze for about 1.3 million workers.

"You cannot ask a front-line teacher (or) health-care worker to take a freeze when non-bargained employees effectively aren't," said Finance Minister Dwight Duncan.

"It's all about being fair and reasonable."

Duncan promised legislation to permanently cap salaries for public sector executives at hospitals, universities, agencies and the civil service at $418,000 -- twice Premier Dalton McGuinty's pay.

However, it won't cut incomes for the 150 public sector managers who already make more than that amount -- including hydro executives and hospital CEOs -- and will also allow exemptions for jobs such as Chief Nuclear Officer at Ontario Power Generation.

The Liberals will freeze the pay for about 8,800 managers in the Ontario civil service, 98 per cent of whom qualified for a performance bonus in 2010.

The government cannot say how many people in the broader public sector will be affected by the legislation, or how much it will save by freezing their pay, but says freezing the pay of civil service managers will save about $12 million a year.

"Dollar-wise these are modest," admitted Duncan. "Symbolically they're important."

The Progressive Conservatives have been demanding a legislated wage freeze for the broader public sector to help eliminate the $13-billion deficit, and said Duncan "missed the mark completely" with his announcement.

"We don't need symbolism in Ontario today," complained PC finance critic Peter Shurman.

"We need to freeze, we need to fix and we need to reduce, and I see no sign of this."

The Tories supported the minority government's bill imposing a new deal on public school teachers earlier this month, but couldn't say Thursday if they would vote in favour of Duncan's proposed new legislation.

The salary cap and eliminating managers' bonuses were first put forward by the New Democrats, who said their original legislation would have been tougher on senior bureaucrats and public sector executives and would have saved more money.

"If they're going to steal our ideas, I wish they'd steal more than just the headline and actually look at the meat of our proposals," said NDP Leader Andrea Horwath.

"He's basically entrenching the bonuses that were received. He's not getting rid of them."

The Canadian Union of Public Employees said the Liberals are sending "the absolute wrong message" by preparing to freeze worker's wages instead of raising corporate taxes, especially on the big banks.

"This is political double speak. This is unfair and unreasonable," said CUPE Ontario president Fred Hahn.

"This is all a set up so they can freeze low paid workers at their wages, and at the end of the day that's not going to help the economy."

The government warned in last spring's budget that it would legislate a two-year wage freeze for the broader public sector if workers refused to negotiate zero-increase deals.

It already passed legislation -- with help from the Tories -- to impose a contract on public school teachers that allows younger teachers to still get raises but freezes salaries for the majority.

The teachers' bill angered public sector unions, who helped the New Democrats take the Kitchener-Waterloo riding from the Tories in a byelection this month, and in the process prevented the Liberals from getting their majority government.

So far the Liberals have not moved to legislate a wage freeze for all public sector workers, saying they need to at first try negotiations so the courts do not strike down the bill whenever it is introduced.

Duncan has been complaining about recent contracts negotiated at universities and by firefighters that provided salary increases, which he warned will lead to service cuts because the government will not providing additional funding to pay for them.

The Liberals say they need the wage freeze to avoid layoffs and service cuts as they move to eliminate the budget by 2017-18 and avoid an expensive credit downgrade.

The government has said it will not open up existing contracts, but Duncan has warned that everyone paid for by the Ontario taxpayers can expect a two-year wage freeze in their next contact if they don't agree to one now.