MacKinnon panel urges legislated salaries for public sector workers, higher tuitions

The blue ribbon panel's report on Alberta's finances is recommending salaries for public sector workers be legislated, private clinics be allowed to perform day procedures and the freeze on post-secondary tuition be ended.

Cut operating budget by $600M a year and 'substantially reduce' capital spending, panel says

Former Saskatchewan finance minister Janice MacKinnon speaks to media about her report which recommends the province cut spending. (Colin Hall/CBC)

The blue ribbon panel's report on Alberta's finances is recommending salaries for public sector workers be legislated, private clinics be allowed to perform day procedures and that the freeze on post-secondary tuition be ended.

The panel recommends the government reviews all programs, move some services to private sector providers and eliminate some "lower priority" programs. It says past hiring freezes and limits haven't worked at reducing the size of the public service. 

The six-person panel, led by former Saskatchewan finance minister Janice MacKinnon, was asked in May by Premier Jason Kenney to look at ways to get Alberta's finances under control. The report was delivered to the United Conservative Party government in mid-August.

The much-anticipated report was released to the public Tuesday. You can read it here.

In order to balance the budget by 2022-23, the government must cut operating spending by "at least" $600 million a year and "substantially reduce" capital spending, the panel said. 

"Alberta's annual expenditures would be $10.4 billion less if its per capita spending simply matched the average of spending in Canada's three largest provinces: British Columbia, Ontario and Quebec — and we would not have a deficit," the report states. 

The panel asserts that due to changes in the energy market over the past 10 years, Alberta's fiscal position is more precarious today than in the 1990s when the government of former premier Ralph Klein embarked on its austerity program. 

"Cuts around the edges won't get Alberta back to a sustainable balanced budget," the report states.

"The government needs to make a difficult but necessary course correction immediately to return the province to fiscal health over the medium- to long-term." 

Alberta Finance Minister Travis Toews said he is concerned about what the panel revealed about Alberta's finances.

"The panel report, I think, has done a very good job of laying out the need to think about transformational change in the way we deliver all programs and services but particularly health care," he said. 

But Sarah Hoffman, deputy leader of Alberta's NDP Official Opposition, said Kenney is breaking an election promise not to make cuts to health care.

"I'm disappointed, but I'm not shocked to see this report recommend that he go back on all the promises he made to Albertans," she said.

Cut education spending, pay MDs less

The panel concluded that Alberta's teachers, physicians and nurses are better compensated than their colleagues in British Columbia, Ontario and Quebec.

The report says legislated salary levels can be used in "exceptional circumstances." MacKinnon says Alberta's current situation applies. 

The panel recommends the government reduce the education spending that goes toward administration and governance, bringing levels closer to British Columbia's level (to 17 per cent from 24 per cent).

The panel says the government should look at closing some of Alberta's 26 post-secondary institutions, and move the sector away from its dependence on government grants by increasing tuition and using "alternative revenue sources." That includes "more entrepreneurial approaches" to delivering and paying for programs. 

Physicians should be moved away from fee-for-service to alternative payment plans, the report recommends.

"Savings to physician compensation could be made through negotiations," but the panel says the government "should consider its legislative options."

The panel concluded that on a per-capita basis Alberta spends more than any other Canadian province — "a critical financial situation that demands decisive action."

Alberta remains the only province without a provincial sales tax.

Although the panel was not asked to look at the revenue side of the ledger, the report suggests Alberta needs to move away from its reliance on fluctuating resource revenues which are subject to many factors outside the province's control.

"To successfully manage the province's finances, steps need to be taken to increase stable sources of revenue and decrease the reliance on the volatile non-renewable resource revenues." 

When questioned about this statement during the news conference, MacKinnon maintained her stance that Alberta's has a spending, not a revenue problem.

Report to guide provincial budget

"Leaving taxes for another day is the right thing to do because this is a spending problem, not a problem you should solve by raising taxes," she said. 

"There is no evidence here to support the idea that Alberta is a province that should be raising taxes." 

MacKinnon's recommendations are expected to help guide the government's first budget, which is expected to be delivered next month. 

Kenney has said the recommendations will help erase multi-billion dollar budget deficits over four years.

Kenney is already battling in court with public sector unions that represent 180,000 workers, including nurses, teachers and paramedics, after his government passed a bill in June rewriting collective bargaining agreements to delay wage negotiations.


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