EDMONTON – The Alberta government is freezing the salaries of about a quarter of its workforce for two years as it deals with nosediving oil and gas prices.
Finance Minister Joe Ceci said Wednesday the move affects 7,000 civil servants and will save $57 million in total.
“This was not a decision we made lightly,” Ceci told a legislature news conference.
“However, to maintain stability and to protect jobs within the public service we must deal with the economic realities we are facing.”
The move comes as the province moves into bargaining over the next two years with teachers, nurses and with its largest union, the Alberta Union of Provincial Employees.
Ceci was asked if the freeze was meant to send a message to union negotiators at the bargaining table.
“That’s a different process,” he replied. “Future decisions with regard to collective agreements will take place at the bargaining table.”
He added negotiations can’t take place in an economic vacuum.
“Every Albertan knows that these are difficult times,” he said. “I assume when collective bargaining occurs that the situation, the economy as we are in today, will be part of those discussions.”
Guy Smith, head of the AUPE, said the move is a shot across the bow in collective bargaining, but said it doesn’t change anything.
“It’s zeros at the bargaining table anyway,” he said. “When we go to the bargaining table that’s (always) the employer’s position.”
Smith said most of the affected staff are managers and senior managers making more than $100,000 a year.
The province will pay out almost $25 billion this year in salaries — equivalent to half the total amount of government revenue.
The pay for cabinet ministers and legislature members has already been frozen.
Legislature members make almost $128,000 with pay escalating depending on added responsibilities. Cabinet ministers pull in over $190,000 a year and Premier Rachel Notley tops out at almost $207,000.
Manager salaries have been a political football in years past under the former Progressive Conservative government.
In 2013, the government announced it was freezing pay for top managers for three years. A year and a half later it abandoned the promise and delivered to them a seven per cent pay hike over three years.
Ceci was asked if the freeze promise will be broken again.
“My expectation is what I’m announcing today is what I believe will happen,” he replied.
Ceci said the plan for the 2016-17 budget, to be unveiled this spring, will build on the financial plan laid out last October.
That plan includes billions of dollars in borrowing for more infrastructure construction and avoiding front-line cuts to education and health jobs.
The government predicted last fall that this year’s budget deficit, for the year ending March 31, will be $6.1 billion.
The price of the benchmark West Texas Intermediate has since continued to fall and has now crashed below US$30 a barrel.
Ceci declined to confirm Wednesday that the deficit target will still be met.
“We are doing our utmost to bring in our deficit (to) where we targeted, but we are also doing our utmost to protect services and invest in the economy,” he said.
Wildrose Leader Brian Jean said the freeze should have been taken last year as oil prices continued their descent.
Progressive Conservative Leader Ric McIver said the freeze is “a drop in the bucket” and urged Ceci to make significant cuts to operating expenses.