The Liberals hoped to save $2.4 billion when they passed legislation in Sept. 2012 to freeze teachers' pay for two years and reduce banked sick days and pension benefits, but the auditor found they gave some of the savings back to the unions.
"The savings were reduced as a result of subsequent discussions," said Lysyk.
Of the total cost, $200 million went toward giving teachers and school board workers more paid sick days, hiring more substitute teachers to cover the sick days and changing the eligibility threshold for retirement benefits, she said.
It cost another $155 million to reduce the number of unpaid professional activity days, give teachers one day's pay if they take fewer than six sick days a year, improve maternity benefits and compensate school boards for increased expenses because of the new deals.
And it cost another $113 million to eliminate wage differences between teachers' unions, which have so-called "me too" clauses so every group benefits when one negotiates a new or increased benefit, added Lysyk.
"So if you add the $200 million, the $155 and the $113, that is the total for the additional costs," she told reporters.
Wynne was not available for comment on the auditor's report even though she was in question period and attended a cabinet meeting at the legislature Wednesday.
Education Minister Liz Sandals refused to comment on the additional costs for the decision to reopen the teachers' deals, and ended up walking away from reporters.
"I am absolutely delighted that we have a new way of doing collective bargaining," Sandals said repeatedly. "We saved what I said we would save."
Public school teachers withdrew from extracurricular activities and staged protests after the Liberals legislated the two-year wage freeze, and blocked the streets outside Maple Leaf Gardens during the Liberal leadership vote in Jan. 2013.
Wynne knew the Liberals needed to get the teachers back on side before the spring election and so she reopened their contracts to appease them, said Progressive Conservative Lisa MacLeod.
"This information would have been better in the hands of moms and dads before the election, but it wasn't," said MacLeod. "Today parents are learning that $500 million that should have been intended for kids in classrooms went to renegotiate contracts so that Kathleen Wynne would be more popular."
MacLeod said she felt vindicated but not happy that the auditor confirmed the extra costs for the move to reopen the teachers' contracts and accused Wynne of trying to buy labour peace.
The New Democrats said the Liberals created a huge mess by violating the Constitution when they legislated the teachers' pay freeze, and warned that could result in a hefty legal bill for the government because of a court challenge.
"They broke open collective agreements, they took money that they shouldn't have taken and they caused turmoil in our schools," said NDP education critic Peter Tabuns. "The government wrote the law for its own convenience and students, parents and teachers have to deal with the fallout."
The auditor said the new deals with teachers, which reduced their ability to bank sick days and cash them out at retirement, would save about $2.1 billion, but warned about the unknown costs of the teachers' court challenge of the wage freeze bill.
"We're saying that there's $2 billion in savings, but depending on what the courts decide in that situation, it would have an impact on this if there was a ruling against the government," Lysyk said.
On Tuesday, Sandals admitted the Liberals would cut the education budget by half a billion dollars over the next three years to help eliminate the $12.5-billion deficit, suggesting hundreds of schools with low enrolment would be shut down.
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