The Alberta Union of Provincial Employees has rejected the province's latest contract offer

“Again, we are stuck trying to negotiate with a government that isn’t interested in any real negotiation," said AUPE president Guy Smith in a website posting.

While the province stuck to its demands of a two-year pay freeze, it added a one-per-cent hike in year four of the agreement. 

It also topped up two lump-sum payments totalling nearly $3,900 with additional paid days off.

But the union rejected the offer. 

“Every reliable economic forecast shows Alberta average wages increasing by approximately 3 per cent for the next two years," said AUPE negotiator Dale Perry. "There is absolutely no way to justify a wage freeze, especially when the government is able to post billion-dollar operating surpluses.” 

The union wants a 3 per cent salary increase for each year. Smith said they're prepared to let an arbitrator settle it.

"If the government believes that its position is sustainable and viable then take it to arbitration because that where an independent third party can decide which position is most reasonable and rule on that."

In a written statement Deputy Premier Dave Hancock says he's disappointed after they spent three days negotiating this week on the improved offer.

He says the deal was fair to both employees and taxpayers.

Both sides said they are willing to return to the bargaining table.