A pay dispute between Alberta's teachers and the provincial government will go to arbitration in January, the Alberta Teachers' Association said Monday.

A one per cent hike in teachers' pay based on a Statistics Canada index is to be considered by an arbitrator. (CBC)"We both agreed that this would be expedited," said Carol Henderson, president of the ATA. "That's part of the agreement."

The dispute centres on pay raises in the teachers' five-year contract that are tied to the national average earnings index.

Last year, that index was calculated at 4.85 per cent for 2008-09. But in March, Statistics Canada changed the method it used to calculate the index, and came up with the new figure of 5.99 per cent.

That increase of just over one per cent would put an extra $23 million into the payroll for Alberta's 43,000 teachers. The province has said it wants to stick to the lower number.

"There's a great interest in getting it resolved," Henderson said. "It will make a firm commitment about what will happen in the next two years of the agreement, whether that schedule will be adhered to, or whether something else will have to be designed."

The teachers' contact runs through 2012. The arbitration hearing is set for Jan. 23-24, with a decision expected some time in February, Henderson said.