TORONTO - The cash-strapped Liberals have taken their first step towards labour peace with Ontario teachers ahead of the new school year, but it's unclear whether they'll be able to make it to the finish line.

A new agreement was reached with the Ontario English Catholic Teachers Association, the first one to break ranks with other unions, which have refused to negotiate after the government pushed for a wage freeze to slay a $15-billion deficit.

The union agreed to a two-year wage freeze and three unpaid "professional development days" in the second year of the contract, which the government said would amount to a 1.5-per-cent pay cut. The same will apply to principals and vice-principals.

"We have reached an agreement that is fair and reasonable, that acknowledges the fiscal challenges that are facing this province, and ensures that everyone — from the director of education down to the first-year teacher — shares in these fiscal restraints," said union president Kevin O'Dwyer.

Under the agreement, teachers will no longer be allowed to bank sick days and their allotment of 20 sick days a year will be cut to 10, said Education Minister Laurel Broten.

But the sick days that have already been banked will be protected and can be cashed out at retirement.

There are 10 PD days a year and teachers are obliged to show up for work, said O'Dwyer. However, the province agreed to let teachers take the three unpaid days off.

Ontario teachers start at $41,766 to $44,292, and can make up to $92,813 in elementary schools and $94,942 in secondary schools, depending on years of service and education.

The government wanted to freeze the grid so no one gets a raise because of seniority or improved credentials.

By agreeing to the unpaid days, the union avoided the proposed freeze to the salary grid, allowing younger teachers to move up the pay scale, O'Dwyer said.

The deal may have an impact on negotiations with the other unions.

The Elementary Teachers Federation of Ontario, the most vocal opponent of the province's wage freeze demands, wouldn't comment Thursday. But the union, which represents 76,000 education workers, is planning a joint news conference Friday with three other unions representing teachers and other education workers.

ETFO has called the government's demands "insulting" and walked away from the provincial discussion table after just one hour. The voluntary process allows teacher and staff unions, as well as trustee associations, to discuss issues come up with a framework to take into local collective bargaining.

O'Dwyer said OECTA, which represents 43,000 elementary and secondary school teachers in 29 Catholic school boards, isn't pulling the carpet out from under the feet of other unions.

They all had an opportunity to negotiate and do what they had to do, he said.

"Some left early in the process, some left later in the process," O'Dwyer said.

"But frankly, I'm going to respect that they did what they felt was best for their members. We did the same thing."

Broten said the deal will serve as a "road map" for bargaining with all of the other unions and urged them to come back to the table over the summer.

"Many people thought that this day would never come, that we would never agree, that we were too far apart," she said. "But this agreement demonstrates the value of partnership."

Just because the government reached an agreement with one union doesn't mean they'll automatically reach one with the others, said New Democrat Gilles Bisson.

"Each union is different, they have different issues, so the government should not take this as a victory lap and flaunt it as a pattern for what's going to happen with the other unions," he said.

The Ontario Medical Association, which represents Ontario's doctors, said it's "disappointing" that the Liberals won't do the same for them and try to find a way to meet their fiscal targets.

The agreement is far from a victory, said Progressive Conservative education critic Lisa MacLeod.

"I'm not sure necessarily that this is going to save us any money or prevent any labour disruptions," she said.

Ontario Catholic School Trustees Association, which left the negotiating table Wednesday night, was upset to learn that a deal had been reached behind its back, she said.

The deal with the province was reached early Thursday.

In an email obtained by the Tories, OCSTA said it left the talks because there remained "significant" issues that it couldn't accept.

"We are dismayed at the dangerous precedent this agreement sets as to how this government interprets its commitment to its educational partners and labour relations more broadly," the email said.

OCSTA was never informed that there was a potential deal between OECTA and the government, it said. "We are firmly opposed to any agreement made without our boards involved."

The Liberals are trying to broker similar deals with other teachers' unions to save $250 million in 2013, plus one-time savings of $1.4 billion. They've threatened to legislate a wage freeze if all other options fail.

Local collective agreements between school boards and employees still need to be negotiated and signed.

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