TORONTO - Public sector unions in Ontario are balking at the idea of a two-year wage freeze as long as the province is giving corporations a $4.5-billion tax cut.

Finance Minister Dwight Duncan sat down Tuesday with union leaders and employers who run public institutions such as hospitals, schools and universities to talk about freezing salaries for about 710,000 workers.

The meeting wasn't exactly the consultation process the unions had been expecting when it was hastily scheduled just a week ago, said Smokey Thomas of the Ontario Public Service Employees Union.

"This is more like a presentation to us rather than, as the minister has billed it, a consultation," said Thomas.

"It's not a consultation; he's just trying to tell us what he wants (and) just because he wants something doesn't mean he's going to get it."

What Duncan wants is to negotiate new two-year agreements with each of the public sector unions as current contracts expire that would give workers "zero and zero" increases in compensation.

"He can propose it but he has to bargain it," said Thomas.

"He's trying to fix the deficit on the backs of working people and I don't think that's right."

A similar pay freeze for 350,000 non-unionized public sector workers announced in the March budget was expected to reduce costs by about $750 million a year. The government couldn't say how much it would reduce costs if unions also agreed to a wage freeze.

"We don't save it, that money will stay with those broader public sector partners, whether it's school boards, universities, colleges, hospitals, you name it," said Duncan.

"The exercise here is not to go to zero and take the money out. The exercise is to go to zero and leave the money in."

However, most union leaders said they couldn't understand why public sector workers -- who they say didn't create the $19.7-billion deficit -- should have to take a wage freeze when corporations are getting billions in tax cuts.

"It's a horrible idea, and from a policy perspective it makes no economic sense whatsoever," said Sid Ryan, president of the Ontario Federation of Labour.

"If you have a shortfall in revenue, why is it we're giving $4.5 billion in corporate tax cuts to corporations? That defies logic."

Fred Hahn, Ontario president of the Canadian Union of Public Employees, said his members spend their paycheques in the communities where they work, but corporations can't be depended on to do the same.

"We're just giving away money and crossing our fingers and hoping (businesses) will do good stuff with it," said Hahn.

"This is not like the early '90s, this is not about sharing the pain. That's all just not true."

However, Duncan said the corporate tax cuts were a key part of the government's economic recovery plan and would not be reversed.

"We're not stopping that," he said. "This is not about broader public policy. We have to have competitive corporate taxes and ours are still among the highest in the country."

The unions want Duncan to agree that workers earning less than about $35,000 a year would be exempt from the pay freeze, something the minister suggested could be negotiated as long as total compensation packages for the sector were not increased.

Ontario spends more than $50 billion a year on salaries and compensation, about 55 per cent of total program expenditures.