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Labour negotiations provide opportunity to reduce ballooning government compensation

Author: Franco Terrazzano 2020/01/18

For too long, Alberta politicians would pretend to arm wrestle with union bosses while submissively letting government labour costs balloon. Without the political backbone to truly stand up for taxpayers, those politicians stuck Albertans with the bill for salaries and benefits that are often far higher than those in other provinces. It’s time to start reversing course.

Premier Jason Kenney has an opportunity to right past wrongs and lower taxpayer costs as his government heads into labour negotiations with union bosses. And not only are cuts needed, they’re clearly warranted.

Through freedom of information requests, the Canadian Taxpayers Federation obtained Alberta government data for 81 government positions. Of those 81 positions, 74 are paid more in Alberta than the average of similar provinces (government data compares Alberta with numbers available for British Columbia, Saskatchewan, Manitoba and Ontario). And many Alberta government positions are paid significantly more than their provincial counterparts.

Take a senior museum scientist for example. The maximum compensation for a senior Alberta government museum scientist is $125,900. If that seems like a large sum of money to you it’s because that’s $17,300 more than the same employee would receive in B.C.

The museum scientist is the rule, rather than the exception. About 57 per cent of government occupations that the CTF received data for are paid more than $10,000 more in Alberta than the average in the comparable provinces. More than 10 per cent of the Alberta government occupations receive more than $20,000 above their provincial counterparts.

There’s no doubt that some of these government positions provide significant benefits for Albertans. But do Alberta doctors, whose average fee-for-service earning is $413,000, provide benefits so much better than counterparts in Ontario that they deserve nearly $100,000 more from Alberta taxpayers?

Salaries and benefits are so inflated among the government’s ranks that taxpayers would save $3 billion every year if the Alberta government’s per-person spending on compensation were brought in line with similar provinces, according to the 2019 Alberta budget.

The experts say Albertans are being overcharged.  

“Alberta’s spending per capita is the highest in Canada,” explained the Blue Ribbon Panel on Alberta’s finances. “The Panel also found that, in some key areas, in spite of the higher levels of funding, the results achieved are no better and, in some cases, worse than in other provinces.”

Maybe Alberta pays our government employees more because of competition with the private sector?

Well, for many government employees, such as Alberta’s registered nurses whose maximum compensation is $20,000 more than the same nurse in Manitoba, the most obvious comparison is between provincial governments.

But even when considering Alberta’s private sector, it’s clear that government cuts are needed.

Alberta’s government employees (all levels of government) receive a nine per cent wage premium compared to their counterparts working for a business. That’s on top of the golden pensions, earlier retirement and greater job security that government employees receive.

Workers outside of government have taken it on the chin for years. While total workers’ pay in the province has dropped by over $865 million, the Alberta government’s employee compensation increased by $3 billion between 2014 and 2018. It’s not right to charge taxpayers more to cover inflated salaries and a growing government workforce while taxpayers are struggling.

Alberta's inflated government salaries and benefits stem from past politicians who weren't willing to stand up for taxpayers. As Kenney works to pull Alberta out of its $70-billion debt hole, he will need to bring these bloated labour costs back down to reality.

This column was originally published in the Calgary Sun on Jan. 18, 2020.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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