The university had offered a raise to $17,500 from $15,000 for the annual funding package that PhD and master's degree students receive for their work.
Canadian Union of Public Employees 3902, Unit 1, said just over 1,100 members voted to reject, while 992 voted to ratify.
"Our members have clearly indicated that continued strike action is necessary to achieve the gains that are necessary for long-term financial security as student workers," said Craig Smith, spokesman for CUPE 3902.
Without contract for 10 months
Teaching assistants and course instructors have been without a contract for more than 10 months.
Members say tuition fees in Ontario are the highest in Canada, and that the province spends the least per student in Canada.
CUPE 3902 Unit 1 represents 6,000 workers. Union members have been on strike since Feb. 27.
The proposed agreement provided enhanced wages, improved benefits, better financial assistance and tuition fee offsets — making it one of the best teaching assistant compensation packages in Canada, the University of Toronto said in a statement.
“We continue to be in close contact with the provincial mediator and remain committed to finding a solution to this impasse that would end the strike and allow affected students to complete their academic term without further disruption,” said Prof. Angela Hildyard, vice president of human resources at the University of Toronto.
Meanwhile, more classes are set to resume on Monday at York University, where two of CUPE 3903's three bargaining units remain on strike.
Classes were cancelled at York when the strike began on March 3, but have gradually resumed, leading to some tense confrontations between picketers and people trying to get on campus. York's website has a list of courses that will resume.