What appears to be happening is that the mayor is no longer in charge of the finances of the municipality because CUPE is in charge. And CUPE has set the wages of the workers higher than an average worker in the private sector would get for the same job. Also, the mayor might not also be able to reduce expenses by letting workers go, because CUPE is likely also in charge of that.
So, who is in charge, CUPE or the mayor? It looks like CUPE.