Relations between the City of Toronto and its unionized workers remained tense Thursday as contract negotiations bogged down and a deadline loomed at the end of the month.

Both sides accused the other of bargaining in bad faith, setting the stage for a nasty labour dispute just weeks away from the end of the existing contract.

City contracts with a number of unions end on Dec. 31

The union also said that the city filed for the appointment of a conciliation officer with the Ministry of Labour one Wednesday ramping up the tensions between the two sides.

"The city has been making contingency plans for quite some time – it is of no surprise to me that they are planning for a labour disruption rather than negotiating at the table," said Mark Ferguson, president of the Toronto Civic Employees Union, Local 416 of the Canadian Union of Public Employees.

"What we want is that the city come back to the table and negotiates in good faith. Negotiate an agreement that respects employees and protects vital public services."

Ferguson insists that the city broke off talks on Wednesday and went straight to the Labour Ministry to file its request for a conciliator.

"Yesterday they tabled a proposal that they were not prepared to negotiate with the union and walked away," he said. "Five minutes later we found out they were filing for conciliation. We're interested in getting back to the table so we can negotiate a deal that makes sense."

But Mayor Rob Ford is optimistic a deal can be reached.

"We are bargaining in good faith," he said in a wide-ranging interview with CP24 earlier on Thursday. "Let's get a deal with the unions, and let's move on. We want to strike a deal.

"No one wants to see a strike . . . but on the other hand, we can't be pushed around or bullied."

Looking ahead to 2012, Ford also said he plans to cut a portion of the land-transfer tax and push ahead with his plan for a Sheppard subway line.

"We are going to build subways," he said. "(Transit City) is a disaster."

As for the Sheppard line, Ford said he has $333 million in funds from the federal government for the project, which has been estimated to cost about $4 billion.

The mayor said he planned to talk with Premier Dalton McGuinty soon on the transit issue.

Several media outlets have said that the cost to shut down Transit City will be about $65 million, but Ford called that number "fictitious."

Metrolinx, the provincial's transit agency, has said it is still finalizing the cost to cancel Transit City.

Ford also said he plans to run for mayor again in 2014.

"I'm already out campaigning."