Freezies and Ice Caps in the Alberta Budget

During its tenure, the NDP have instituted a number of freezes on various costs. Its rationale for salary freezes is the revenue drop during the recession.

Its rationale for cost freezes is a ‘Robin Hood like’ urge to move costs from families and individuals to the public purse.

The trouble with every freeze is that there is eventually a thaw!

Government Workers

Salaries make up about $26.6 Billion of the Alberta government’s budget.  Part of the NDP government fiscal strategy is to tamp down salary and employment costs.

  • Salaries of the 7,000 non-union workers were frozen in 2015 – a continuation of a freeze initiated by the previous government.
  • The government’s unionized workforce is about 24,000. That contract expired April 2017.  Negotiations continue.  The Union is positioning itself for other improvements, assuming low or no salary increases.
  • A review of compensation for the heads of public agencies has been undertaken.

For the most part, government has limited new hiring within the public service.  It isn’t a freeze, think of it more as slush.  In budget 2019, Alberta Health Services is funded for 1,120 new positions in long term, continuing and home care. Children’s Services will hire 59 new staff.

Health Care Wage Costs

The NDP government has used the rationale of an ailing economy and comparisons with other provinces in negotiations with public sector unions and health care associations:

  • The Licenced practical nurses and aides received a 1.2% increase in 2015 and 0.8% increase for 2016. The agreement ended March 31st, 2017. New negotiations are on-going but the union complains of a very slow pace.
  • In February 2018, the nurses ratified a 3-year agreement with no salary increases; at least until the third year. The nurses were able to improve job security and shift cycle conditions.
  • Alberta’s doctors are in the midst of difficult discussions with government. In the past 7 years, two increases of 2.5% and one cost of living adjustment of 1% were made. Increases in fees and stable government funding for doctors are top priorities.
  • In 2017, dentists were pressured by government to accept an 8.5% decrease for many dental procedures.
  • A variety of pharmacists’ dispensing fees have been rolled back and increases capped at 2.5% for the next two years. Pharmacists are unhappy about these reductions. They come on top of a push by various governments to lower costs by prescribing generic drugs instead of the more lucrative brand names.

The budget for health care proposes to “bend the cost curve” slightly with a 3% increase to operations funding in 2018-19. This is below the benchmark calculation of 3.5% for estimated inflation and population growth.

Education

  • The teachers’ salary agreement currently covers a two-year term to the end of June 2018. The is no salary increase but the agreement provided for some improvements on class size and school resources.
  • Budget 2017 provides $54 million extra funding to school boards to offset the reduction of school fees in primary and secondary schools and bussing costs for students
  • Funding for post-secondary operations will increase by 2% annually for each of the next three years.
  • In 2015, Government began a program to freeze advanced education tuition fee increases for four years to the end of March 2019. It isn’t a freeze for the taxpayer though, government provides about $17 million annually to compensate institutions for the foregone revenue.

Severely Normal Albertans will note that the NDP government has made a concerted effort to restrain public sector wage costs.  When government can no longer point to empty pockets during a recession, public sector unions like the AUPE (which represents 90,000 workers) will expect to see wage increases.

Some of the freezes, like the school and tuition fees are short term measures and seem very unwise considering that government is taking on long term debt to pay for them.