There are more than a few politicians in Canada delighting in what’s happening in Alberta these days.
For years, provincial leaders have been driven mad by the often obscene deals that Alberta has struck with its public-sector employees, making everyone from doctors to teachers the best paid in the country. Not surprisingly, those same professions in other provinces have used these wage benchmarks as targets of their own during contract negotiations.
There’s little question that Alberta has helped drive up the cost of government right across Canada.
It seemed that the Prairie province, bathing in oil riches, would be able to spend its way to labour peace for eternity. But then its bitumen bubble burst, and now Alberta has joined the ranks of provincial paupers with no money to offer those living from the public purse. And while they’d never say so publicly, leaders of provincial governments across Canada are revelling in a schadenfreude moment for which they’ve been yearning for some time.
The battles that Alberta Premier Alison Redford has on her hands at the moment are ones that other premiers have been forced to endure for years. Ms. Redford recently concluded a rancorous deal with the province’s teachers that included a three-year wage freeze. She’s asking doctors to identify nearly $275-million in cuts, which obviously means no raises for them, too. The doctors have gone ballistic and are threatening to sue.
Ms. Redford, meantime, is soon going to have to convince 21,000 front-line government workers and nearly 25,000 nurses that there’s no money for them, either. Most are expecting major scraps with the unions representing those groups as well.
Needless to say, this has all come as a shock to public-sector employees, who have been living large for some time. Between 2000 and 2010, the public-sector wage bill in Alberta rose by 119 per cent, almost double the rate of growth in the rest of Canada, according to a 2012 paper by two academics from the University of Calgary’s School of Public Policy.
Wages once virtually on par with the rest of the country became higher across all public-sector categories, in some cases substantially so, according to the study by Ben Eisen and Ken Boessenkool. (The province’s 36,000 teachers are paid 20 per cent higher than their typical counterparts elsewhere in the country, according to a recent Statistics Canada study.) Alberta’s public-sector salaries consumed nearly 95 per cent of the increase in provincial revenues over the decade analyzed.
In 2010, Alberta’s general government per employee wages were 35 per cent higher than in the rest of the country and 60 per cent greater in the health and social services sectors.
Fact is, if Alberta had managed its affairs more responsibly, it wouldn’t be in this pickle. There might still have been some money around to build the schools and roads that it’s financing with borrowed funds. All that petro wealth helped paper over a litany of terrible decisions by successive Progressive Conservative governments that burned through cash like a hopeless Vegas gambler.
Alberta’s government workers are now going to find out how the other half lives. For the first time in a long time, they’re not going to get everything they ask for – no matter how hard they stamp their feet or how long they hold their breath. They’ll no longer be loudly clucking over contracts that made them the envy of the country.
The chickens have come home to roost.