My location is Ontario Canada.
In may of 2011, I accepted a new position with the company I was working for. In the past two years they have been adding and adding to my work load. Last year the boss decided to re-do my work description. At that time I asked for them to re-visit my salary grid as all the added work should be considered. A pay raise was accepted. The boss told me that since my salary grid could not be changed to add the 4% increase to it, that instead I would be moved to a level up on my salary grid. It was done.
But when it came time for me to automatically move-up on my salary grid due to my anniversary date of May 1st, they refused. The finance person told me they had changed my anniversary date to October 1st of 2013 (the date I received my salary increase) and I would only move up on the grid on October 1st.
My problem is, there is no mention of this on my letter accepting my raise. This was not what was discussed and we have no policy on this.
So by doing it this way, I actually see a pay increase from October to may, but when may comes, I find myself at the axact level of pay that I would have been before the increase. So I have a pay increase 7 months out of the year. Their explanation for this is that I moved up on the salary grid earlier than I should and there is my pay increase.
I now have a new job description with a different work load that they did not have to post and that I somewhat accepted and they are getting out of giving my full pay increase.
A few years back all salary grids were raised of 1.5% due to government increase. None of the anniversary dates were changed at that time, but they say it's not the same.
What should I do and is this legal?

.. 'raised of 1.5% due to government increase'.. what does that mean? Do you work for the gov't or a private company?
If there is no policy on this as you state, then you are at the mercy of what they do, unless you can find out somehow that there really is a policy that has been routinely applied to others. The fact that it wasn't spelled out in the offer letter isn't illegal. If they verbally told you something different, then you need to call that to their attention. It may be tough if they deny it.
I'm not sure I understand exactly what you missed out on, other than that your start date has been changed, and you have to wait for another raise. That is common as far as I know - you started a new position, and got more money sooner.
In these recovery days, no one can afford to lose their job by getting argumentative. Ask to sit down with HR for a full explanation. Most people are being asked to do more and more, just to keep their jobs, just to keep the company alive.

1.5 per cent is the 'cost of living bonus' initiated in the 80s Ontario.

It sounds like you were promoted out of your pay scale and you now have a new pay scale and a new anniversary date for pay purposes.

It sounds perfectly normal and correct. You somehow thought you were getting two raises, sorry that is not how it works with promotions.

Your promotion and that date of raise is now used to look at future raises.

While it is purely company rules, ( not law) this is standard and customary. Most people would have know that.

Companies have their own rules, and procedures so be grateful you have a raise, and can look forward to another one. Most cannot.