Q and A: Fiscal focus should be on raising revenue

January 27, 2015
Gordon Thomas, Executive Secretary

Question: Premier Jim Prentice has been talking about unsustainable public sector salaries. Is he talking about teachers? What is the ATA doing about this?

Answer: Premier Prentice has made several comments lately about Alberta’s public sector salaries being the highest in Canada and that Alberta’s budget will no longer sustain salaries for its public servants that are the highest in Canada. The statement is very disappointing and is one of a series of “trial balloons” on how the government will proceed given the huge fall in revenue, now projected at around $7 billion in the budget year ahead.

The premier has also commented on the potential for a provincial sales tax, for revisions to the personal income tax structure (i.e. moving to a “progressive” tax instead of the “flat” tax in place today), for changes to the corporate tax, for an increased gasoline tax, for increased “sin” taxes and for the potential return of health-care premiums.

The fact that Alberta’s public sector workers are the highest paid in the country reflects the reality that Alberta’s private sector workers are the highest paid in the country. In fact, the government acknowledges that private sector salaries are 26 per cent higher than the national private sector average, and that Alberta’s public sector salaries are 12 per cent higher than the national average. Where are the best paid engineers? Geologists? Heavy duty mechanics? Pipefitters? Alberta.

The government also acknowledges that the tax advantage in this province compared to the next competitive province is more than $11 billion. That’s right, $11 billion. Albertans (and Alberta businesses) pay more than $11 billion a year less in taxes than their counterparts in British Columbia, and $23 billion a year less than those in Nova Scotia. There is clearly room to raise revenue, stabilize the situation and to maintain Alberta’s tax advantage.

At the officials’ level, Association staff have been invited to briefings so that government representatives can provide more detailed information about the fiscal situation. A consultation process is likely to follow, with focus on options that will include a mix of spending reduction, revenue growth and short-term deficits. Current speculation is that the budget will be presented in early to mid-March, and a provincial general election called in order for Premier Prentice to obtain a mandate based on the budget. 

Association President Mark Ramsankar has advised Education Minister Gordon Dirks that the Association fully expects the government to adhere to the terms of the Assurance for Students Act and complete the four-year agreement through 2016. He has also emphasized the workload reality for teachers and the continuing pressures of student growth (approximately three per cent this year and forecast to be three per cent next year as well). We need more resources.

Provincial Executive Council will meet as may be necessary to deal with any emerging issues in the weeks and months ahead, and there will be regular information updates to our members. The most up-to-date information will be posted on the Association’s website www.teachers.ab.ca. ❚

Questions for consideration in this column are welcome. Please address them to Gordon Thomas at Barnett House (gordon.thomas@ata.ab.ca).