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* Ontario says doctors' wages effectively frozen
* Province still seeking deals with teachers, other unions
* Deal with doctors runs until March, 2014
By Claire Sibonney
TORONTO, Nov 13 (Reuters) - Ontario's government said on Tuesday it struck a deal with doctors in Canada's most populous province to curb fees, part of a broader push by the ruling Liberals to eliminate a large budget deficit.
Ontario Premier Dalton McGuinty, who announced last month that he would resign once the Liberals elect a new leader in January, said he hoped a tentative agreement with the Ontario Medical Association would motivate other labor groups to reach deals with the province.
The agreement, which runs to March 2014, followed months of heated negotiations and comes as the minority Liberal government is mired in contentious talks with other provincial employees, including teachers.
"We're hopeful that (the deal) will send a signal to all Ontarians that our government works as hard as we can to secure these agreements with our partners - whether that's those who work in schools, those who work in the healthcare system, or those who work in government services," McGuinty told reporters during a visit to Google Canada's new offices in Toronto.
The Liberal government angered public sector unions by passing a law that freezes wages and limits their right to strike, a move it hopes will help reduce the province's C$14.4 billion ($14.4 billion) budget deficit.
Credit rating agencies have repeatedly warned Ontario that tackling its deficit will require tough austerity measures.
Canada's provincial governments, which administer most of the country's health and education spending, have met fierce opposition in recent years as they've moved to control their budget deficits through cuts to services.
Health care is Ontario's biggest expense and wages and fees account for much of the spending. Under Canada's publicly funded health care system, doctors typically bill the government based on a negotiated fee schedule.
The government said several reforms in the deal with doctors - i ncluding r educing t ests it sees as unnecessary such as p re-op cardiac testing fo r low-risk patients - wi ll save C$100 million over two years. It said this money will be used to hire new doctors.
"We can characterize this as a real wage freeze," Ontario's Health Minister Deb Matthews told reporters. "There is a little bit more in the physician service envelope but every penny of that is offset by system savings that doctors control."
The Ontario Medical Association President Doug Weir said in a statement that he was pleased to help the province find savings in the health care system that allow for spending in other areas.