P.E.I. Treasurer Wes Sheridan says the government will not be rolling back the wages of civil servants, or legislating any wage freezes.

Sheridan made that commitment during a phone-in show Thursday morning on CBC Radio.

"We will not be rolling anything back," Sheridan said. "You can mark that in stone. … There is just no way. We're going to look at how we govern. We'll make sure every dollar we spend is spent correctly.

"We're not going to legislate. We're not going to mandate. We'll be here and negotiate."

Sheridan also addressed the issue of reducing the size of the civil service to deal with the deficit.

"Upwards of 22 per cent of our civil servants in the next 18 months have the ability to retire," he said.

"That really puts a different challenge in front of us. It allows us to take a look at exactly what services we provide for Islanders and what do Islanders want us to do."

Shelley Ward, president of the P.E.I. Union of Public Sector Employees. (CBC)Sheridan did not rule out the possibility the government might not replace some of the retiring civil servants, and that concerns Shelley Ward, president of the P.E.I. Union of Public Sector Employees.

"I would hope they would all be replaced," she said. "We're at skeleton staff right now with regards to providing services for Islanders."

Ward said cutting staff further would hurt the services staff are supposed to be delivering.

But the province will have to rein in its $85-million deficit if it's going to balance its budget in 2012, Sheridan said.

The government and public sector are expected to go to the bargaining table early in the new year.

Premier Robert Ghiz first raised the wage-freeze issue last week when he imposed a two-year salary freeze on politicians and senior bureaucrats.

He said they were leading by example and noted that unions in other provinces were taking zero wage increases.

Ward argued that government overspending created the problem.

"We're in the deficit situation because we have a government that has been foolishly spending our money as taxpayers, and people have to realize that public-sectors workers are taxpayers, and we are really concerned about where this tax money is going," she said.