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.

Provincial budget hurts front-line services as government blames workers

Edmonton – Alberta’s 2015 budget shows that the government has public services in the crosshairs.

The budget, tabled on Thursday, March 26, will eliminate 2,000 public sector jobs – mostly in health care – and will increase fees for services. The government’s budget documents also included promises to undermine public-sector wages. In all, the budget promises to cut $1.9 billion overall from the services Albertans need.

“Prentice is more interested in maintaining low taxes for his corporate buddies than maintaining quality front-line services in health care and education for everyone else,” Alberta Federation of Labour president Gil McGowan said. “This isn't a balanced approach, it isn’t a ‘hold-the-line budget.’ This is a budget that will hurt everyday Albertans, and it doesn’t spread the burden by increasing corporate taxes.”

On the chopping block in the budget are 1,700 health care employees and 244 education employees.

“You can’t cut 1,700 jobs from health care without having an impact on front-line services. Everyone will see fewer public services – especially health care – in the next few years,” McGowan said. “It’s galling to think that they’ve brought back a health care levy while taking an axe to the health care system. Albertans are going to start paying more for their health care, while getting a lot less.”

Despite clear public support for proposed revenue measures the budget did not include any changes to corporate taxes or to royalty rates on the province’s natural resources.

“The government is not listening to its citizens,” McGowan said. “Albertans want to be paid fairly for their resources. They want large and profitable corporations to pay a fair tax rate – something closer to what we had under Lougheed.”

MEDIA CONTACT:

Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell)
or via e-mail [email protected]

Urgent Action

Sign the Better Way Alberta petition

The Better Way Alberta coalition is urging the government to fix the province’s broken revenue system. And we’re asking you to sign our petition. Join the thousands of Albertans who have already signed, and help be part of the solution.

The Petition

We the undersigned residents of Alberta, petition the Legislative Assembly to ensure there is enough money to pay for necessary public services like education and health care by introducing tax and royalty reforms that include the following measures:

• increasing the tax on corporate profits to a rate that is closer to the national average;
• replacing Alberta’s flat income tax with a progressive tax that requires high-income earners to pay higher tax rates than middle and low-income earners;
• and introducing royalty changes that ensure Albertans receive a fair share from the sale of their resources.
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You can sign the petition online at www.BetterWayAlberta.ca or in person at the Alberta Federation of Labour offices (Parkington Plaza, #300, 10408 – 124 Street NW, Edmonton, AB T5N 1R5).

News

Better Way Alberta campaign turns a mirror on Tory mismanagement

Over the next few weeks, voters will be hearing from the Better Way Alberta campaign, showing them that there are sensible, moderate measures that can help ensure the long-term financial stability of the province.

The province-wide campaign will consist of a central website and petition; a radio and online advertising campaign; a direct-mail campaign to every household in Alberta; and a door-to-door campaign in which canvassers will have face-to-face conversations with Albertans about the Better Way Alberta campaign.

 “Who created the current budget mess? It’s time for Premier Prentice and the Tories to look in the mirror,” says Alberta Federation of Labour President Gil McGowan. “We’re not facing a budget crunch because of anything individual Albertans did. The real problem is that successive PC governments have blown holes in the revenue base we need to fund education, health care and other services that Albertans rely on.”

According to the government’s own numbers, Alberta could increase the amount it gets from taxes by $11.6 billion a year and still have the lowest taxes in Canada. Most of that $11.6 billion that is going uncollected by Alberta’s inequitable tax code is being left in the pockets of the province’s richest individuals and most profitable corporations.

“If we’re all in this together, as Premier Prentice says, why should corporations and the wealthy get a free pass?” McGowan said. “And why should ordinary Albertans pay for the mistakes of politicians again?”

The campaign was created by a coalition 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). Visit www.betterwayalberta.ca for more information about the campaign, or to sign the petition calling on the government to reform its revenue system.

Looming Temporary Foreign Worker deportations highlight inhumanity of program

Thousands of vulnerable Temporary Foreign Workers (TFWs) are facing deportation.

On April 1^st, thousands of work permits will expire, and the workers who hold those permits will be forced to leave. They and their employers were not allowed to renew those work permits because the government tightened the rules on the Temporary Foreign Worker program.

“The Temporary Foreign Worker program needs to be reined in, but without affecting the workers who are already here,” AFL president Gil McGowan said. “There should not be any more TFW permits for low-wage employers, but the workers who are already here should have been allowed to stay.”

There are more than 70,000 Temporary Foreign Workers in Alberta. The province has the highest percentage of its workforce composed of Temporary Foreign Workers of any jurisdiction in the country. In particular, it is in Alberta where low-wage employers have made the most aggressive use of the program in an attempt to drive down wages.

Did you know…

• Even before the price of oil crashed, revenue generated from Alberta’s shrunken taxes on personal income and corporate profits covered only about 40 per cent of the cost of public services, compared to about 60 per cent in other provinces.

• Women working full-time only earned 63 per cent of the annual average salary their male counterparts earned in Alberta.

• Alberta’s spending is $9,786 per person on public services — $434 less than the national average, despite the fact that cost-of-living is higher here.

Events

• March 21:  International Day for the Elimination of Racism

• April 16-19: AFL Convention “Dream No Little Dreams”

• April 28: International Day of Mourning for Workers Injured or Killed on the Job

The Tories have put out numbers claiming that Alberta’s per-capita spending is above the national average – but inflated Alberta’s figures by including $3.55 billion in flood relief funding, and drove down the national average by ignoring standard methods of comparison.

“This goes beyond spin, which we expect from politicians. They have deliberately and deceptively overstated how much Alberta spends on a per-capita basis, and deliberately and deceptively understated how much other provinces spend on a per-capita basis,” Alberta Federation of Labour president Gil McGowan said. “And they’re using these distortions to justify cuts on important public services like health care and education.”

When comparing on a province-to-province level, one should find the provincial per-capita spending levels, add them together, and divide by the number of provinces. The government didn't do that. Instead, it took all provincial spending divided by the population. This method drives down the average because some larger provinces, benefitting from what economists call ‘economies of scale, have lower numbers than Alberta.

“They’re playing games with numbers because to them winning is more important than the truth. But this isn’t a game. Public services, and the quality of life for Albertans, are at stake,” McGowan said. “In any other province, a government that engaged in this kind of blatant and deliberate deception – on top of years of arrogance and incompetence – would fall.”

Up-to-date and accurate figures from RBC Economics show that – when the government isn’t paying for flood recovery – Alberta’s per-capita spending is below the national average. Figures from the 2014-15 budget year show Alberta’s spending is $9,786 per person -- $434 less than the national average.

“They use old data, inflated by flood spending, to support their argument that Alberta overspends. The reality is quite different,” McGowan said. “How to deal with Alberta’s budget crunch is a crucial debate for the province. The public deserves to have that debate informed by accurate, fair, and reliable numbers. Albertans deserve better than Tory distortions.”

AFL Backgrounder: How the Government Fudged Per-Capita Spending Figures

MEDIA CONTACT:

Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell)
or via e-mail [email protected]

2015 Backgrounder: How the Government Fudged Per-Capita Spending Figures

Backgrounder issued with New Release: Mar 11: Misleading numbers undermine Tory credibility

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.”

MEDIA CONTACT:

Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell)
or via e-mail [email protected]

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.”

MEDIA CONTACT:

Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell)
or via e-mail [email protected]

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]

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]