The governing Liberals say money for Metrolinx workers' pay hikes will come from within the transit agency's existing budget, but that the raises won't affect riders.
About 1,850 staff, including bus drivers and ticket sellers are getting increases of about 8.5 per cent over four years.
However, the cash-strapped government says there's no extra money to pay for it.
Treasury Board President Deb Matthews says Metrolinx, which runs GO trains and buses, must still maintain or improve transit service, which the Liberals have promised to expand significantly over the next few years.
Interim Conservative Leader Jim Wilson says if the firm has extra of money, it should go to lower fares instead.
A Metrolinx spokeswoman says the deal is affordable.