The salaries of public-sector managers and other non-union employees will be frozen for two years, Alberta's Finance Minister Joe Ceci announced Wednesday.
The decision will affect about 7,000 provincial workers.
The salaries of the affected non-union workers will be held at 2015 levels and stay within the current pay grid, Ceci said.
The savings will amount to $28.5 million annually each of the two years, he said.
"This is not a decision we made lightly," Ceci said.
"The Alberta public service is made up of hard-working and dedicated women and men who do valuable work each and every day.
"However, to maintain stability and protect jobs within the public service we must deal with the economic realities we are facing."
Damage to morale, union says
Guy Smith, president of Alberta Union of Provincial Employees, said the $28.5-million savings figure is all about optics.
"This does not have any impact on the overall budget deficit at all. And it does impact the lives of hard-working, front-line management and senior management in the Alberta public service.
"The morale in the public service at the management level is going to be affected."
Even though Smith doesn't agree with the decision to freeze salaries, he says the union has a much better relationship with Rachel Notley's NDP government after years of frustration with Tory administrations.
"What we've seen is a much higher level of respect" with the current government.
Smith added he's encouraged by Ceci's respect of the collective bargaining agreement and public services, but knows Wednesday's decision is a signal to the union that dealing with the government is always going to be difficult.
"It never ends for us."
Meanwhile, Ceci said his main focus is to stabilize public services and invest in infrastructure that will help diversify the economy when the current slump comes to an end.
Thousands of Albertans, including many in the oil and gas industry, have lost their jobs due to the economic downturn.
Union employees not affected
Union employees will not be affected by the freeze. Ceci said discussions about salaries for union employees will have to take place during upcoming collective bargaining talks.
"I assume when collective bargaining occurs, that the situation, the economy as we are in today will be part of those discussions," he said. "But I don't want to presuppose what will happen at bargaining tables [in the future]."
But the Wildrose argues the NDP must suspend pay increases for all government employees.
"All we're asking is that in order to protect public services — to ensure that eventually people don't have to get laid off to balance the budget — that we restrain spending increases right now," said Derek Fildebrandt. "And that means a pay freeze until we can get the budget under control."
No public-sector jobs were cut when the budget came out in October. Ceci plans to table the 2016 budget later this spring.
Ceci's October budget projected a $6.1-billion deficit, the largest in Alberta's history. The budget also forecast oil prices at $50 US a barrel this year and $61 US in 2016-17. Currently, prices sit just above $30 US a barrel.