TORONTO -- Ontario introduced legislation Wednesday to limit wage increases for public sector workers, including teachers and nurses -- a move major unions said could derail ongoing negotiations, spark protests and give rise to a court challenge.

The bill would cap wage increases to an average of one per cent a year for three years for the broader public sector.

Treasury Board President Peter Bethlenfalvy called it a "fair and time-limited approach" as the Progressive Conservative government works to eliminate an $11.7 billion deficit.

"This is really good news for our public sector workers because we are protecting jobs today," he said.

"Our government values the important role that all public sector workers play in delivering programs and services to the people of Ontario. Our province's fiscal reality means we must be honest about ensuring sustainability of government programs and services."

The legislation applies to employees at school boards, universities and colleges, hospitals, long-term care homes, Ornge air ambulance service, children's aid societies, broader public sector organizations, and boards and commissions that receive at least $1 million in provincial funding.

More than one million broader public sector employees would be affected by the bill, which was introduced the day before the legislature is set to rise for a summer break.

Ontario recently started the bargaining process with the largest teachers' unions ahead of an Aug. 31 contract expiry.

The president of the Ontario Secondary School Teachers' Federation said he was at the bargaining table Wednesday, but learned of the legislation on Twitter. Harvey Bischof said he will now have to assess if bargaining will continue.

"It's a complete undermining of the good faith bargaining process," he said. "You can't sit down and negotiate when they hang legislation over your head. That's not coming to mutual agreement. They are in the process of creating instability in the system by taking this approach."

Smokey Thomas, president of the Ontario Public Service Employees Union, raised the possibility of a charter challenge, saying the legislation violated unions' ability to bargain collectively.

He also said unions are already preparing to protest.

"I think they're going to have a long hot summer," he said. "My union and others, we'll target all those Tory MPPs and their constituency offices, all their fundraisers, all their golf tournaments, all their barbecues -- we'll screw every one of them up."