Mayor David Miller says an arbitrated settlement in the 31-day-old civic strike would cause huge budget problems for the city in the months ahead and could possibly lead to layoffs.

"Every time there's been an arbitrated settlement, the cost of that settlement has been very high," he said at a Wednesday news conference in city hall, pointing to Toronto police officers being awarded three-per-cent hikes.

If Toronto's 24,000 unionized workers were given a 12 per cent wage hike over four years, there would be service cuts and the ability to hire young people would be restricted, he said.

"It's my duty as mayor to keep providing public services. The only way we're going to succeed in achieving an affordable collective agreement is through negotiations," he said.

Ending the strike through a provincially-mandated back-to-work order "would mean we would be in an even-worse position," he said.

Layoffs would affect public services, he said.

Miller was vague on whether progress is being achieved in negotiations with CUPE Locals 416, the outside workers, and 79, the inside workers.

The mayor said every time he's felt optimistic, there's been a setback.

Strikers holding firm

A group of striking union members began their day holding informational pickets outside Union Station.

One told CTV Toronto that from his perspective, this strike is an attempt by the city to take away gains that workers made in earlier negotiations.

They marched through the downtown core, holding up traffic along the way, before making their way back to city hall.

A lone anti-union protester greeted them there. The protester said he was sick of four per cent property tax hikes every year.

The key issues appear to be wages and the fate of the current sick leave plan.

The city has offered the workers a 1-1-2-3 per cent deal over four years. The union wants the same settlement that other municipal employees such as police officers got last year, namely three per cent hikes in each contract year.

Unionized workers at the LCBO, represented by the Ontario Public Service Employees Union, recently ratified a negotiated deal that will give them a 7.75 per cent raise over four years.

City union members currently get 18 sick days per year. They can collect a lump-sum payment upon retirement of up to six month's pay. The city wants to replace this with a short-term disability plan. Miller has characterized the city's position as offering a buy-out, not taking something away.

Other developments

Miller said he will call a special council meeting for Aug. 5 and 6, although it could be cancelled if the strike is resolved before then. The meeting will be restricted to urgent business.

The city's chief medical officer of health has issued two orders: Applying pest control measures at Campbell Park and to remove illegally dumped garbage from Bluffer's Park.

"If for any reason, the city is unable to gain entry to comply with the orders, we will seek a court injunction to allow access to those sites," the mayor said.

Staff in the parks, forestry and recreation department will be processing refunds for those families that signed up for day camp, swimming and leadership programs. More information on that will be forthcoming on Thursday, he said.

Miller said the city won't be issuing refunds on property taxes.

On Centre Island, the Centreville amusement park sits closed, costing its owners an estimated $3 million so far and leaving hundreds of young people without summer jobs. The company couldn't reach an agreement with the union to allow it to operate the park without picketing.

"What we're trying to do to help Centreville is to get our employees back to work," Miller said.

"What I've been trying to do from the beginning is do the right thing, not the easy thing."

The right thing would be a fair-but-affordable collective agreement that would get the Toronto Island ferries working again, he said.

With a report from CTV Toronto's Austin Delaney