Transit users in Toronto heaved a collective sigh of relief as buses, streetcars and subways rolled out in time for Monday morning's rush hour, after a last-minute deal was struck between the city and its main transit union.

But although most people are relieved a strike didn't create chaos, some are already looking ahead and asking, "What about next time?"

An agreement was reached at about 6 p.m. ET Sunday — two hours past the deadline set by the union for a deal to be in place — and ended days of concern for commuters.

About 750,000 riders use the TTC each day every workday.

Bob Kinnear, the Amalgamated Transit Union's Local 113 president, said Sunday he's happy with the tentative three-year agreement, which contains no concessions and would make TTC employees the best-paid transit workers in the Greater Toronto Area.

"This is an agreement that all parties can live with and therefore our executive board will be recommending ratification of this agreement," Kinnear said.

The agreement includes a three per cent wage increase in each year, plus an improved benefits package.

Had a strike been called, 8,900 drivers and maintenance workers would have hit the picket lines on Monday morning.

Essential service or not?

Although the TTC contract was settled before the all-out strike was to take effect at 4 a.m., several city councillors are saying they want the TTC designated an essential service.

Such a move would take away the union's right to strike.

But it would also pave the way for binding arbitration, and Toronto City Hall does not necessarily welcome that idea, with Mayor David Miller and TTC chair Adam Giambrone appearing lukewarm about it.

Giambrone points out that Toronto hasn't been hit by a legal transit strike since 1999, and essential service legislation wouldn't necessarily stop labour disruptions. In May 2006, TTC workers staged a one-day illegal walkout.

"It doesn't always work the way you plan out. I'm pretty happy with the system we have now," he said in an interview on Monday. If the union loses its right to strike, it gains the right to binding arbitration, and Giambrone says those settlements are often more expensive. Anil Verma, a labour relations expert at the University of Toronto, agrees.

"Generally workers get more than they would under bargaining and it is for this reason that many employers in the private sector are reluctant to go to arbitration," said Verma.

Designating the TTC essential would be up to the Ontario government.

Premier Dalton McGuinty said on Friday he'd be willing to look at that option, but only if a request comes from City Hall. Two councillors have introduced a motion to make that request, which could be debated at the next council meeting.