(This op-ed by Paige MacPherson, Alberta Director of the Canadian Taxpayers Federation, was published in the Calgary Sun and Edmonton Sun on Sunday, October 25, 2015.)
It’s no secret that large firms across the province are implementing hiring and salary freezes and reducing their number of employees.
There’s no reason that, in tough economic times and with a bloated bureaucracy, government shouldn’t do the same.
Yet, recently the Alberta government intended to give senior government officials a 7.25 per cent pay hike, a decision they later reversed after public scrutiny. The reversal was commendable, but the initial willingness to dish out raises was concerning.
Government employees make well above the Albertan average. The government should not be shielded by a golden bubble paid for by taxpayers. Our government sector should set an example and tighten its belt, too.
To quote the late Ralph Klein: the government has a spending problem, not a revenue problem. The first step in recovery is admitting you have a problem. The next is dealing with it. In Alberta, we’re still on step one.
Total provincial government expenses have increased by 21 per cent since 2003-04, adjusted for inflation and population growth. Had spending been held at 2003-04 adjusted levels, Albertans would be spending $9.3 billion less in 2015-16. Even the Prentice government admitted our spending was out of line.
Salaries and benefits comprise a large part of that. Alberta currently has 197,582 public employees in the "Alberta Public Service."
Based on the $24 billion spent on compensation, the average cost for each full-time government sector employee is $121,696.
Looking for savings within the bureaucracy would show struggling private sector workers in Alberta that their government counterparts are also making sacrifices to collectively improve our economy.
Government employees in Alberta enjoy a salary premium over their private sector counterparts. A 2015 Fraser Institute report found that the average wage in Alberta’s government sector (including all three levels of government) is 6.9 per cent higher than salaries in the private sector, controlling for qualification factors.
The report also found that government employees enjoy much higher job security and pensions, and take more time off. Simply, government employees do not face the same realities as the private sector.
The private sector has faced over 35,000 job cuts according to an industry association. The government could take a page from the private sector and simply not refill positions as government employees retire, outside of frontline services.
When asked about spending reductions, this government says they don’t want to hurt frontline services. That’s a great line, but they don’t need to. Reducing the size of the government through attrition and reducing salaries actually represents a much rosier reality than the private sector is facing. It’s the least government could do, and it’s much better than continuing to hike Albertans’ taxes and shovel debt onto the backs of our children.
Yes, these are tough decisions, but that’s why we elect governments.
A 10 per cent salary trim and modest reductions by not refilling non-essential positions at a time when Albertans are losing their jobs would be nothing more than the government stepping in line with reality.
Former federal Liberal leader Stephane Dion famously asked, “Do you think it’s easy to make priorities?” He was attacked relentlessly, but he’s right. It’s not easy to make priorities. It didn’t work out for him, because although making priorities is very challenging, it’s exactly what we elect our governments to do.
When Alberta’s premier and finance minister are telling us they can’t balance the budget because of a lack of revenue, don’t buy it. They can balance the budget. It just involves making priorities.
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