Budget 2015 and 2016 Feedback
The Overview
It is clear Alberta is facing a challenging fiscal landscape. But the problem has much more to do with revenue than spending.
Past Progressive Conservative governments have been entirely unwilling to examine the revenue side of the ledger, which always put public service cuts squarely at the centre of the agenda. Alberta has had a long history of justifying cuts to public services. Whether it is zero-based budgeting initiatives or discussions about “trimming non-essential services,” the narrative has not been whether we will cut, but how much?
The new Government of Alberta has a critical task ahead as it attempts to turn the page on decades of austerity. Since being elected four months ago, it has made considerable progress in raising new revenues needed to support public programs and services. However, given Alberta’s continued reliance on high commodity prices, much remains to be done as Minister Ceci now anticipates a record budget deficit of at least $5.9 billion.
By eroding tax fairness, past governments have placed the new government in an extremely difficult position as it asserts the need to maintain public services and staff levels, while addressing serious revenue shortfalls.
Read more2015 Prentice blames Albertans. Unions launch campaign aimed at unmasking the real culprits: the Tories themselves
Better Way Alberta campaign offers Albertans solutions to government’s budget woes
Edmonton – A coalition of major public-sector unions is launching a $500,000 province-wide campaign aimed at saving public services from deep cuts, and encouraging the provincial government to address its budget woes by fixing the province’s broken revenue system.
The Better Way Alberta campaign, which presents evidence that the government’s budget woes are caused by systemic problems in taxes and royalties, will be launched at an event today at the United Nurses of Alberta offices (Sixth Floor, 11150 Jasper Avenue), featuring the presidents of the Alberta Federation of Labour, United Nurses of Alberta, the Health Sciences Association of Alberta and the Canadian Union of Public Employees (Alberta Division).
“Premier Jim Prentice has said that Alberta’s budget is sinking, but if that’s true, it’s because his party has spent decades blowing holes in the revenue system that’s supposed to pay for the services on which Albertans rely,” Alberta Federation of Labour president Gil McGowan said. “Instead of dealing with the problem, the premier has proposed a reckless nine-per-cent budget cut across the board. That will cause pain to everyday Albertans, put people out of work, and possibly deepen the economic turmoil the province is facing. There is a Better Way.”
What: Better Way Alberta press conference and launch
When: 1 p.m. March 5 (TODAY)
Where: United Nurses of Alberta offices, 6th Floor, 11150 Jasper Ave. Edmonton
Who: Alberta Federation of Labour president Gil McGowan
United Nurses of Alberta president Heather Smith
Health Sciences Association of Alberta president Elisabeth Ballermann
Canadian Union of Public Employees (Alberta Division) president Marle Roberts
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MEDIA CONTACT:
Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell) or via e-mail [email protected]
Prentice cuts will move Alberta to 8th place among provinces in terms of public spending
Cuts would weaken public services and deliver a significant blow to the provincial economy
Edmonton – Proposed nine per cent cuts to government spending will drop Alberta to near the back of the pack among Canadian provinces in terms of per-capita spending on public services.
If the cuts proposed yesterday by Premier Jim Prentice are enacted, Alberta will move down to eighth-place amongst Canada’s ten provinces in terms of per-capita spending on health care, education and other public services. At present, the province is in sixth place.
“Premier Prentice’s plan to lop nine per cent off the province’s spending on public services is wildly irresponsible,” Alberta Federation of Labour president Gil McGowan said. “What the so-called Klein revolution taught us is that deep cuts don’t end recessions, they make them deeper and longer.”
According to figures published by the Royal Bank of Canada, Alberta currently spends about $9,786 per person on public services, slightly less than the average for other provinces. If the proposed cuts are enacted, this would be reduced to $8,905, ahead of only Ontario and Quebec, whose more urbanized populations allow them to deliver services more cheaply.
“Obviously, the declining price of oil is a big concern. But the effect of low-priced oil on the provincial budget has been magnified by irresponsible choices made by successive PC governments. Specifically, things like the flat tax, corporate tax cuts and royalty cuts have blown a hole in the revenue base that we need to fund important public services like education and health care,” McGowan said. “The solution is to fix the holes, not sacrifice the services that our growing population needs.”
The RBC figures also show that no other province spends less on public services as a proportion of its economy than Alberta. In Alberta, the government spends only 11.3 percent of the provincial economy on public services, while the Canadian average is 18.7 percent. The next-lowest spending province is Saskatchewan, where they use 16.1 percent of their economy to fund public services.
“Premier Prentice wants to leave the impression that we have no choice but to cut spending, even on core services like health care and education,” McGowan said. “But the truth is that we have many options. If we collected revenue at a rate that was closer to the national average we’d be able to weather this storm more easily. The Tories themselves admit that we could raise taxes by $11 billion a year and still be the lowest tax jurisdiction in the country. And it’s important to remember that we still have no debt. The point is that cuts are not the only alternative.”
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Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell)
or via e-mail [email protected]
Proposed budget cuts would drop Alberta to near the back of the pack
Cuts would weaken public services and deliver a significant blow to the provincial economy
Edmonton – Proposed nine per cent cuts to government spending will drop Alberta to near the back of the pack among Canadian provinces in terms of per-capita spending on public services.
If the cuts proposed yesterday by Premier Jim Prentice are enacted, Alberta will move down to eighth-place amongst Canada’s ten provinces in terms of per-capita spending on health care, education and other public services. At present, the province is in sixth place.
“Premier Prentice’s plan to lop nine per cent off the province’s spending on public services is wildly irresponsible,” Alberta Federation of Labour president Gil McGowan said. “What the so-called Klein revolution taught us is that deep cuts don’t end recessions, they make them deeper and longer.”
According to figures published by the Royal Bank of Canada, Alberta currently spends about $9,786 per person on public services, slightly less than the average for other provinces. If the proposed cuts are enacted, this would be reduced to $8,905, ahead of only Ontario and Quebec, whose more urbanized populations allow them to deliver services more cheaply.
“Obviously, the declining price of oil is a big concern. But the effect of low-priced oil on the provincial budget has been magnified by irresponsible choices made by successive PC governments. Specifically, things like the flat tax, corporate tax cuts and royalty cuts have blown a hole in the revenue base that we need to fund important public services like education and health care,” McGowan said. “The solution is to fix the holes, not sacrifice the services that our growing population needs.”
The RBC figures also show that no other province spends less on public services as a proportion of its economy than Alberta. In Alberta, the government spends only 11.3 percent of the provincial economy on public services, while the Canadian average is 18.7 percent. The next-lowest spending province is Saskatchewan, where they use 16.1 percent of their economy to fund public services.
“Premier Prentice wants to leave the impression that we have no choice but to cut spending, even on core services like health care and education,” McGowan said. “But the truth is that we have many options. If we collected revenue at a rate that was closer to the national average we’d be able to weather this storm more easily. The Tories themselves admit that we could raise taxes by $11 billion a year and still be the lowest tax jurisdiction in the country. And it’s important to remember that we still have no debt. The point is that cuts are not the only alternative.”
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Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell)
or via e-mail [email protected]
Prentice budget cuts will deepen recession
Reckless PC spending cuts will make oil downturn worse for Albertans
Edmonton – The nine per cent budget cuts proposed by finance minister Robin Campbell and Premier Jim Prentice will plunge Alberta into a downward economic spiral, harm Albertans who rely on public services, and further threaten to push Alberta toward recession.
On Wednesday, February 11, the finance minister joined Premier Jim Prentice in a press conference updating Albertans on their plan to tackle government deficits caused by low oil prices and an irresponsible tax system. In the conference, the premier cited the languishing price of oil as a pretext for austerity measures and spending cuts.
“Jim Prentice has an opportunity here to show some leadership and political courage. Today’s press conference is an indication that he isn’t going to take that opportunity. This is terrible news for all Albertans,” Alberta Federation of Labour president Gil McGowan said. “The premier knows that we’re facing a possible recessionary period – and every credible economist will tell you that slashing spending at this time will only deepen that recession.”
Despite the Premier saying he has heard that Albertans want a measured and reasoned response to the current fiscal reality, the PC government announced up to a nine per cent cut in government spending across the board. This will mean billions of dollars less each year for the front-line services on which Albertans rely, without addressing the underlying problem that the province’s budgets are too dependent on fluctuating resource revenues.
“When you cut spending this drastically, you put people out of work. When you put more people out of work, they stop spending. And when that many people stop spending, the economy grinds to a halt,” McGowan said. “Unless Premier Prentice can step up and provide leadership on royalties and taxes, Alberta could be heading for some very dark times.”
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MEDIA CONTACT:
Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell)
or via e-mail [email protected]
Alberta budget based on lies
Government puts itself on “collision course” with workers
Edmonton – Today’s provincial budget is a flawed document designed around false economies and myths about public-sector workers.
During his budget speech, the Finance Minister Doug Horner argued that public-sector wages should be “competitive” with those in the private sector – completely ignoring the fact that Statistics Canada data shows that public-sector wages are statistically indistinguishable.
“As a result of this approach to budgeting, the government is putting itself on a collision course with workers,” AFL president Gil McGowan said. “Public-sector workers earn on average the same as their counterparts in the private sector. But this government has workers in the crosshairs – whether it’s attacking their pensions or their wages.”
The minister took aim at pension plans during his speech, insinuating that the plans needed drastic changes to keep them as defined-benefit plans – completely ignoring the fact that independent actuaries have confirmed that the unfunded liabilities of the two largest pension plans, the Local Authorities Pension Plan (LAPP) and the Public Service Pension Plan (PSPP), are shrinking, and will be paid off by 2025.
“This is a budget based on two big lies, and they’re big lies that are disrespectful to workers in health care, in education, in law enforcement and in every part of the public service,” McGowan said. “The facts are that public-sector worker compensation is on par with the private sector, and their pensions are modest, sustainable and stable.”
The budget, which includes plenty of spending on capital projects, does not have much allocated to maintaining the services that Albertans value. The Minister proudly trumpets how they’re ‘holding the line,’ on public-sector wages, ignoring how much those wages have been falling behind inflation. By comparison, wages in the private sector are going up on average three to five per cent each year.
“I’m concerned because this is a burning-bridges budget. It’s a budget that sets the stage for tension with labour, it sets the stage for employees looking for jobs elsewhere, and it sets the stage for costly court battles,” McGowan said.
“I might say that it sets the stage for labour strife, but they’ve made it illegal for me to suggest such a thing.”
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MEDIA CONTACT:
Olav Rokne, Communications Director, Alberta Federation of Labour at 780.289.6528 (cell)
or via e-mail [email protected]
Redford’s vision-free Throne Speech pledges more broken promises
More public service cuts coming, says Alberta Federation of Labour
Edmonton – AFL President Gil McGowan said the Speech from the Throne is a blueprint for a rehash of Redford’s failed record: more cuts to front-line services, lack of revenue reform and a continuation of selling raw non-renewable resources at below-market prices.
“Premier Redford was elected on promises to safeguard our public services. Instead, she’s cut them and her agenda will continue this broken promise,” McGowan said, in attendance for the Speech from the Throne at the Alberta Legislature this afternoon.
McGowan said Albertans should be concerned about the government’s promise to hold spending to below population and inflation growth, while turning a blind eye to any semblance of revenue reform.
“Alberta’s booming, but program spending won’t reflect that. How many more jobs will be cut in healthcare and education?” asked McGowan noting that hundreds of jobs have already been cut for Alberta’s civil service.
“Add this to the failed rip-it-and-ship-it policy of raw-resource exports, rather than upgrading to higher value products, and you’ve got a recipe for disaster for the public services Albertans rely on.”
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Gil McGowan, President, Alberta Federation of Labour, on site at the Legislature Rotunda,
780.218.9888 (cell) or via twitter @gilmcgowan
The two faces of Premier Redford
Generosity for an overpaid inner circle while freezing workers' wages
Edmonton – Premier Alison Redford offered a fierce — and disingenuous — defense of high salaries for her inner circle today.
In response to questions about high salaries being paid to her chief of staff and inner circle of advisors, the Premier claimed that compensation of public sector workers in Alberta was high in general.
At the press conference in Okotoks, the premier said: "In all of our labour negotiations we continue to provide increases to public servants." A statement that is blatantly false given that just two months ago, the legislature passed Bill 46, which imposes a wage freeze on tens of thousands of government workers.
"It seems like Alison Redford is always willing to stand up for the wealthy, and is always willing to make claims that she's on the side of working people," Alberta Federation of Labour president Gil McGowan said. "But the proof is in the pudding — wage freezes, gag orders, and pension cuts are the facts that frontline workers face."
The average government wage may be higher than the average wage for workers – but as Albertans have found out this week, that average is skewed by extremely high pay for people in the premier's inner circle.
"The premier tried to suggest today that the province is paying public sector workers well. But the facts show that outside of her inner circle, that isn't the case," McGowan said.
The latest reliable Census data available — a survey of more than 92,000 public-sector workers — shows that the average government workers' wages are two per cent lower than in the private sector.
Other evidence supports this. Statistics Canada's shows that Alberta's civil servants earn an average $1,283.65 a week in November 2013, down from the previous period. The wages of workers in several other sectors' are higher, such as those in construction and utilities.
"It is important to make sure that we have high quality people who can provide effective support and services to the government of Alberta and the people of Alberta and we're not going to shy away from that," the Premier said.
"Redford says that workers deserve to be compensated, but her words are in conflict with her actions," McGowan said. "Premier Redford has undermined collective bargaining with Bill 46. At the same time, she's given massive and unjustifiable wages and wage increases to her inner-circle of political staff."
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MEDIA CONTACT:
Gil McGowan, President, Alberta Federation of Labour at 780.218.9888 (cell)
Olav Rokne, Communications Director, Alberta Federation of Labour at 780.289.6528 (cell) or via e-mail [email protected]
Redford government’s proposed cuts to public-sector pensions are “unjustified, unfair and reckless”
New actuarial study demonstrates that Alberta pension plans are healthy and getting healthier – even without benefit changes
EDMONTON – A new study prepared by an independent, professional actuary shows that Alberta's largest public-sector pension plans are healthy and well on the way to returning to fully funded status – even without any changes to benefits.
The results of the study fly in the face of arguments used by the Redford government to justify its plan to roll back pensions covering almost 300,000 public-sector workers and pensioners in Alberta.
In the fall, provincial Finance Minister Doug Horner announced that major changes would be made to Alberta's four public-sector pension plans, including the two biggest, the Local Authorities Pension Plan (LAPP) and the Public Service Pension Plan (PSPP).
In particular, Horner said he would bring in legislation in the spring of 2014 that will allow him to eliminate guaranteed cost-of-living adjustments and all early retirement incentives for workers covered by plans like the LAPP and PSPP.
Taken together, Horner's proposed changes would slash the value of pensions earned by Alberta public-sector workers by 25 per cent or more on benefits earned after January 1, 2016.
Horner has said the changes are necessary to ensure the sustainability of Alberta's pension plans. However, the report from actuaries at Vancouver-based George & Bell Consulting shows that both the LAPP and PSPP are sustainable and healthy over the long-term without any changes.
The George & Bell study concludes that, under the most likely economic scenario and with no major changes to benefits, both the LAPP and PSPP will return to fully funded status within nine years.
The total costs of the plans are also expected to drop. Costs for the LAPP will drop to the equivalent of 20 percent of payroll (split between employers and employees) and costs for the PSPP will drop to 16 percent (also split between employers and employees).
Even under the most pessimistic scenarios, the study shows that both the LAPP and PSPP will dramatically improve their funding status and keep costs under control – without having to resort to any of the deep cuts proposed by the Redford government.
The George & Bell study was commissioned by a coalition of unions and associations that have members in LAPP and PSPP. The coalition includes: the Alberta Federation of Labour (AFL), the Alberta Fire Fighters Association (AFFA), the Alberta Union of Provincial Employees (AUPE), the Amalgamated Transit Union (ATU), the Canadian Union of Public Employees (CUPE), the Health Sciences Association of Alberta (HSAA), the United Nurses of Alberta (UNA) and a number of smaller unions.
The study was recently submitted to the Minister Horner in support of a brief from the Coalition opposing the government's plan to make major changes to pension plans like the LAPP.
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MEDIA CONTACT:
Olav Rokne, Communications Director, Alberta Federation of Labour at 780.289.6528 (cell) or via e-mail [email protected]
Link: Backgrounder - Fast Facts on Pensions
Commentary from Union Leaders
"These pension plans are the cornerstone of retirement security for hundreds of thousands of Albertans. If the government is going to unilaterally undermine that security, then they had better have a damn good reason. What this study shows is that they government hasn't managed to get its facts straight. They've failed to make the case for the big rollbacks they're proposing." - Gil McGowan, President, Alberta Federation of Labour
"Despite all heated rhetoric that the government has been using to justify their slash-and-burn plan for pensions, the reality is that there is no crisis. Our pension plans are healthy. In fact, they're on track to getting even healthier without making any major changes." - Guy Smith, President, Alberta Union of Provincial Employees
"The government's plan for pension cuts is unjustified, unfair and reckless. In the name of sustainability, they're actually going to make the plans less sustainable by tying the hands of the people who manage the plans and undermining the confidence of the workers and employers who participate in the plans." - Heather Smith, President, United Nurses of Alberta
"There's an old saying that if something isn't broken, you shouldn't try to fix it. This is a perfect time for Albertans to be reminded of that saying." - Elisabeth Ballermann, President, Health Sciences Association of Alberta
"Where's the government's evidence? We've commissioned an independent actuarial study showing that Alberta pension plans are healthy and getting healthier, even without cuts or changes. Why hasn't the government released its own actuarial study? Could it be that their actuary came to the same conclusion as the actuaries at George & Bell?" - Marle Roberts, President, Canadian Union of Public Employees (Alberta Division)