Bill 46 is a prerequisite for any hope at a balanced budget

Alberta’s government finally got it. There is no hope of a balanced budget in this province unless our government manages to control

Derek Fildebrandt, Alberta Director

Canadian Taxpayers Federation

Alberta’s government finally got it. There is no hope of a balanced budget in this province unless our government manages to control the spiraling costs of its government employees.

According to data obtained by the Canadian Taxpayers Federation (CTF) from Statistics Canada, the average weekly earnings of Alberta’s provincial government employees have skyrocketed by 17 per cent in just the last five years. Add to this the government’s own data showing that the average core provincial government employee costs taxpayers an average $120,000 a year in salaries, wages and benefits.

While there are many deserving and hard working members of the Alberta Union of Public Employees (AUPE), its leadership hasn’t grasped the seriousness of the province’s fiscal situation. Rather than work with the government to address the very serious problems with the costs of public sector employee compensation, they walked away from the negotiating table.

And so the government did what few would have expected: they got tough. The government introduced Bill 45 and Bill 46, which should end any illusions about where they stand.

It’s doubtful that Premier Redford and Finance Minister Doug Horner were spoiling for a fight with a constituency that many consider essential to their electoral coalition. But if Premier Redford is to have even a prayer of a chance of going into the next election with a balanced budget – let alone meet her promise to do so before March 31 of 2014 – then she and the finance minister had to make a choice.

Bill 46, AKA the Public Sector Salary Restraint Act is the government’s response to AUPE walking away from negotiations. In the event that AUPE fails to come back to the table and strike a deal, the bill will legislate one in its place. It will provide no raise in the first year, a lump sum payout of $875 for most employees in year two, and provide 1 per cent compounding raises in years three and four.

It’s not quite hardball considering the generous state of affairs described above. When Ralph Klein won the premier’s chair on a promise to wage war on the deficit, he negotiated a 5 per cent rollback in government wages and benefits.

The deal proposed in Bill 46 is a far cry from this, but it is nonetheless a serious attempt at holding the line on government employee compensation while the private sector catches up.

When the government and its unions fail to reach a deal, it traditionally goes to binding arbitration. Unfortunately, arbitration in the province has a bad history of awarding above-inflation salary increases, even in times of recession and deficits. There is no good reason for anyone but our elected legislators having the final say on the province’s budget.

A reasonable compromise might have been to amend the legislation governing binding arbitration to reflect the fiscal realities of the province. Arbiters in the private sector generally do not award raises when a company is hemorrhaging money or is unprofitable. Similarly, arbiters should be required to consider the ability of the government and taxpayers to pay within the current revenue and spending framework when they impose an agreement. Jim Wilson, an Ontario MPP has put forward a private member’s bill that would do just this in Ontario.

Bill 45 (the Public Sector Services Continuation Act) is Bill 46’s little brother. It modernizes existing penalties for illegal, wildcat strikes and from now on, government unions that strike illegally will be forced to compensate taxpayers by paying into a civil liability fund.

Bill 45 makes threatening a wildcat strike illegal, and this is where things get a bit sticky. Union members have legitimate concerns about the effect of this portion of the bill on their freedom of speech. However, the fines were last set in 1993 and they undoubtedly needed to be beefed up.

There is always the chance that bills 45 and 46 are a ruse meant to draw AUPE back to the table and accept a more generous deal. Sort of like being offered the choice of Buckley’s cough medicine or Flintstones’ vitamins.

Even if this is the government’s line in the sand, we should be under no illusions that these measures on their own will balance the budget or stop Alberta’s pilling on debt, but they are a necessity if the government is to even attempt.

 

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