October 26, 2015

Alberta: We're cutting back, so why isn't the government?

Paige MacPhersonAlberta CTF Director

(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.

Oil and gas company Canadian Natural Resources Ltd. announced in September that they were cutting salaries to save from laying off employees. Many other companies have been forced to cut staff.

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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commented 2015-10-27 18:01:44 -0400
Brent, I’m afraid that trudy can’t wait to give it all away at Paris in December.
commented 2015-10-26 21:36:08 -0400
I’m afraid King Ralph will be rolling in his grave after this budget is released. I hope you can give us an update tomorrow afternoon Paige.
commented 2015-10-26 20:38:04 -0400
Planned event! The country is now run by foreign governance through UN world control, we no longer have any representative governance easily seen at expressed in all the degenerate activities now forced down the throats of innocent kids with parents except Muslims and very few others like the rebel demanding a stop to this, the phoney climate change politicians surrounded by their corporate funded masters and tax free foundations. They are ready to pull biggest private property theft through UN Agenda 21 rules and regs! Stock up on grub cause they are coming fast. They stole the through false flag polytechnic with first Trudeau hope they don’t make use of prescription drug users to enforce same theft again.
commented 2015-10-26 17:13:45 -0400
won’t change, even if we had another great recession, protected, in fact, if times got tough for gov’t revenue they would decrease services first before ever cutting benefits to gov’t bureaucracy.
commented 2015-10-26 16:05:52 -0400
Public employees should not be union members period, definitely at the bureaucratic level. When a new government is elected, it should be able to use a broom. This was the problem Federally for both Mulroney and Harper, they could not use a well needed broom on overpaid, underworked, unnecessary bureaucrats who still whinged. Unionized public employees only creates a new privileged plutocracy, who only think of themselves and not the public good. The public service is where the graft and corruption exists, and there are no checks on them…less so now.

Example is the Truth and Reconciliation where all the recommendations boil down to two: first is to pay the chiefs and chieflets more graft; Second, and important to the discussion, is to grow Indian affairs by hiring more Indian experts and increase their salary.
commented 2015-10-26 13:34:00 -0400
Public employees should be paid, on average, the same as the per capita GDP.. GDP goes up, so do salaries, gdp goes down, salaries too… At least this way, public unions would have an interest in growing the economy rather than hurting it… Having the vast majority of public employees outside of the normal supply and demand market has deluded their thinking and fostered an unrealistic sense of entitlement.