Alberta Politics II

[artvandelay]

Teachers, nurses, and other healthcare professionals cannot make an easy transition to the private sector. Private sector wages should have an extremely limited influence on wages for these types of positions yet for some reason these wages have paralleled private sector increases in recent years. These salaries only need to be set slightly above the national average to provide adequate staffing levels. Heck, there is a massive oversupply of teachers in Canada - we do not need to be paying the salaries we do.

You cannot deny that the provincial government has become structurally bloated in the past decade. The amount of mismanagement and waste is astonishing, especially with respect to AHS. There needs to be a serious rationalization of program costs, starting with an overhaul at the top of the civil service.

I wouldn't be opposed to a sales tax and in fact would encourage it provided it is accompanied by a corresponding decrease in corporate and personal income taxes. Furthermore, the incoming carbon tax is in effect a consumption tax. Those of you clamouring for a sales tax are getting your wish.

[MalcolmTucker]

[del]

[Doug]

Most employees appreciate job security, guaranteed advancement simply through years of service and risk free retirement income. Government should have no recruitment problems even in the rare cases it is competing against the private sector. Given low interest rates, employres with DB benefit plans have enjoyed massive raises. Low interest rates alone demand significant cuts to base compensation.

[Doug]

Originally Posted by MalcolmTucker

First thing, while public sector wages are higher in Alberta than other provinces, it is around a 10% growth. Sound big? Well the private sector divergence is 35% higher iirc. Do we want teachers and nurses to be members of the middle class, be able to afford to live an average life? That is more a philosophical question and a values question than a policy question, but it is an important one to ask.

Is 10% slightly above? I think so.

As for civil service reform, the top levels of the civil service have been such a revoling door as of late it could benefit from some stability.

Despite what the media tells you, Alberta spends the lowest % of health care costs on administration compared to any other province. It is just when it is all one organization, it seems like a lot when you aren't thinking about how big AHS really is!

I wonder where all the thought of bloat comes from. The civil service is barely larger than it was under Klein. AHS administration spending as a part of their total budget is down from pre-AHS. Wages have grown at a rate below the private sector. Sure, as in any private organization there is waste and inefficiencies in admin but really they are rounding errors unless people start identifying things the government does that costs money that they want the government to stop doing.

No one seems to do this. They want it all for cheaper, and sell the myth that there will be little consequences "on the front lines".

As a sales tax needing to be offset by other cuts, I would argue we have been in a structural deficit since Stelmach cut the Health Care Premiums. Albertans should identify the services they want, then be told the taxes that are needed for them, and over time iterate to an appropriate level of taxes.

How do BC and ON survive with sharply lower spending?

[MalcolmTucker]

[del]

[PPAR]

Originally Posted by MalcolmTucker

For some context:

Thanks for posting this. From the graph, it appears that if Alberta were to institute a 5% PST similar to Saskatchewan, it would generate roughly $6 billion in revenue for the province. That would be more than enough to eliminate the structural deficit. Alberta could probably achieve a balanced budget with a 4% PST, and some judicious cost containment.

I know "sacrilege!".

[PPAR]

Originally Posted by artvandelay

Teachers, nurses, and other healthcare professionals cannot make an easy transition to the private sector. Private sector wages should have an extremely limited influence on wages for these types of positions yet for some reason these wages have paralleled private sector increases in recent years. These salaries only need to be set slightly above the national average to provide adequate staffing levels. Heck, there is a massive oversupply of teachers in Canada - we do not need to be paying the salaries we do.

You cannot deny that the provincial government has become structurally bloated in the past decade. The amount of mismanagement and waste is astonishing, especially with respect to AHS. There needs to be a serious rationalization of program costs, starting with an overhaul at the top of the civil service.

I wouldn't be opposed to a sales tax and in fact would encourage it provided it is accompanied by a corresponding decrease in corporate and personal income taxes. Furthermore, the incoming carbon tax is in effect a consumption tax. Those of you clamouring for a sales tax are getting your wish.

What is forgotten here is the history of Alberta Health and Education. The Klien cuts left Alberta with a shortage of teachers and nurses. When the economy began to boom, we were left with our pants down and had to offer attractive wages in order to recruit effectively from other provinces in these public sector jobs. Add to this all of the infrastructure that was built at boom prices, and the failure of the Klien approach becomes clear.

[Doug]

Originally Posted by MalcolmTucker

They are not growing at our rate, so a reasonable part of the growth can be absorbed through slack capacity. Alberta used up its slack a while ago. There has been huge population growth!

A higher cost base for capital investment due to way more capital investment in the province per capita. The need for more capital investment due to growth.


Higher dollar amount for staff to have a similar standard of living, so to be competitive you need to be competitive. In addition for some staff there is a need for higher salaries for retention. Due to pattern bargaining it applies to the wider bargaining unit. Due to growth retention was even more important.


Alberta also suffers from Noah's Ark syndrome. Everything Edmonton has Calgary needs and vice versa, so Alberta suffers from a much worse economy of scale than elsewhere for specialized facilities.


For somethings it is just the simple fact that Alberta is isolated, and we provide a very high level of services to smaller communities through a huge amount of paved highways and hospitals.

Cost of living in AB is lower than that in ON and BC, primarily due to lower priced real estate, so that is a red herring. Directionally, the non tax component costs of living are likely headed lower in the province.

Higher population growth justifies higher capital spending per capita, but not higher operational spending. Given the current its current economic is state, AB can likely build infrastructure at far lower costs than in most other provinces because of slack in the construction industry.

Most government positions do not compete with the private sector, so retention is only an issue against other provinces.

[Doug]

Originally Posted by PPAR

What is forgotten here is the history of Alberta Health and Education. The Klien cuts left Alberta with a shortage of teachers and nurses. When the economy began to boom, we were left with our pants down and had to offer attractive wages in order to recruit effectively from other provinces in these public sector jobs. Add to this all of the infrastructure that was built at boom prices, and the failure of the Klien approach becomes clear.

The Klein cuts had nothing to do with the shortage of healthcare workers that once existed. Even in the late 90's, AB still paid more than any other province. The shortage had more to do with population growth and professional associations restricting supply (ex. phaaing out two and three year nursing programs). Teachers are a dime a dozen and always will be given the thousands of new graduates each year.

[PPAR]

Originally Posted by Doug

The Klein cuts had nothing to do with the shortage of healthcare workers that once existed. Even in the late 90's, AB still paid more than any other province. The shortage had more to do with population growth and professional associations restricting supply (ex. phaaing out two and three year nursing programs). Teachers are a dime a dozen and always will be given the thousands of new graduates each year.

This is simply not true. I am in the industry and have knowledge of the situation. Healthcare workers most certainly left the province after they lost their jobs in the early and mid 1990s. There was demand for their skills in other provinces. When Alberta returned to growth, they needed to be recruited back quickly, remember all the concern about lack of Family Doctors and emergency wait times?

[Doug]

I was a healthcare worker in the 90's and left to be an investment banker, management consultant and high tech product manager. I left because of the toxic work environment brought about by lack of performance appraisals and the supremacy of seniority rules. I'm now a pediatric surgeon.

Very few healthcare workers were laid off. Unfortunately those that were tended to be the least senior rather than the most toxic. Most of the shortage arouse due to self serving actions of professional associations and the boom unleashed by the Klein government (ex. removal of machinery and equipment tax, flat income tax, balanced budgets). The Alberta Medical Association, for example, successfully lobbied to reduced the number of first year medical students at U of C from 113 to 70.

It's all moot now as technology has improved productivity and AB population growth has slowed. There are no shortages and the province could easily reduce compensation 10% and remain competitive. Even better would be performance reviews to weed out the low performers and malcontents who drag everybody down.

[MalcolmTucker]

[del]

[MalcolmTucker]

[del]

[Doug]

Originally Posted by MalcolmTucker

It was a federal provincial conference under the last days of Mulroney that created a Canada wide compact to reduce med school and residency spots.

Under strong lobbying from the likes of the Alberta Medical Association.

[Doug]

Originally Posted by MalcolmTucker

Why is it expensive to build things in Alberta? Because both public and private investment is really high. Here it is unadjusted for population. Notice we are only second to Ontario, and not by far. Ontario has around 3 times the population.

That chart would show a cliff for AB investment after 2014. Construction costs will have dropped substantially.

[MalcolmTucker]

[del]

[Doug]

Originally Posted by MalcolmTucker

It would if Statscan still collected this data! But it would still be way way higher on a per capita basis.

Do you acknowledge that slack exists in the construction industry, meaning:
-the least productive resources are the first to drop out, so average productivity will increase
-less need for over time
-workers willing to accept lower wages to stay employed
-construction firms willing to accept lower margins to stay busy
-construction firms willing to accept even lower margins for government work in return for reduced credit risk

[PPAR]

Originally Posted by Doug

Under strong lobbying from the likes of the Alberta Medical Association.

I do not think that the AMA lobbyed for decreases in medical school enrolment. That kind of position would have conflicted with their long stated policy of "patients first". Remember, the AMA is not a union.

[Doug]

Originally Posted by MalcolmTucker

It would if Statscan still collected this data! But it would still be way way higher on a per capita basis.

Originally Posted by PPAR

I do not think that the AMA lobbyed for decreases in medical school enrolment. That kind of position would have conflicted with their long stated policy of "patients first". Remember, the AMA is not a union.

Nope. My mother was an AMA member and was hugely against the move at the time.

[PPAR]

Originally Posted by Doug

Nope. My mother was an AMA member and was hugely against the move at the time.

Well, I hate to contradict a mother, but physician reduction in the 1990s was conceived and executed through joint actions of the Provincial Ministries of Health. Not physician advocacy.

Not from my mom, but from the commission on the Future of Healthcare in Canada:

In 1990, the Federal/Provincial Advisory Committee on Health Human Resources commissioned a discussion paper on, what was then called, medical manpower, which became known as the Barer-Stoddart Report. Released in 1991, a time when the prevailing sentiment was Canada had too many physicians, it contained over 50 recommendations for change and called for a new, integrated approach to planning. Most of the ideas in the document were ignored. One of the few recommendations implemented was to cut medical school enrolment in Canada by 10%, phased-in over the early 1990s, an action subsequently blamed in current views about shortage.