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Booming government is out of touch with Alberta’s realities

December 06, 2018
Booming government is out of touch with Alberta’s realities

Despite the tough times – the thousands of layoffs and stubbornly high unemployment, the empty towers and the giant sucking sound of tax dollars leaving households and businesses – there is an industry in Alberta that marches on like the good times never left: Government.

With their taxpayer income and borrowed funds, those lucky enough to be on the taxpayer dole have largely been shielded from Alberta’s economic tragedies. And the decisions that continue to be made within this booming industry show just how far removed its leaders are from the very people they govern.

When businesses and households were forced to cut back spending during the downturn, did governments share the burden, tighten their belts and allow Albertans to keep more of their money?

No.

After years of spending increases, the Alberta government has continued the spending spree increasing its purchases from $48.4 billion in 2014 to $56.6 billion this year. How many families would have loved to increase their spending by 17 per cent over the last few years?

It’s the same story at the municipal level. Both Calgary and Edmonton have seen their spending balloon over the last decade. The city of Calgary just approved its budget calling for more tax hikes with the idea of cutting spending largely absent from the debate

To fuel the booming government industry, families and businesses have been hammered with higher business taxes, income taxes, property taxes, a rising government debt bill and a new tax on the heat for our homes and fuel for our cars.

Perhaps the biggest government leap away from reality is around jobs, salaries and benefits. To put it simply, it pays well to be a government employee in Alberta.

According to the Fraser Institute, government employment in Alberta surged upwards between 2014 and 2018, while jobs outside of government declined.

Furthermore, government employees in Alberta earn a 10 per cent wage premium compared to their counterparts in business. To add insult to injury, while many Albertans lost their job or took a pay cut during the tough times, there are government employees in Alberta that have seen salary increases. Over the past three years there has been a 9 per cent increase in city of Edmonton employee wages.

But this is only part of the story. In Alberta, government employees are much more likely to be covered by a registered pension plan, retire earlier, lose more work hours for personal time and are less likely to experience job loss than those working for a business.

Between the two pensions available for the mayor, the $10,000 average retirement bonuses for city employees, and the 236 employees set to receive three pensions along with hundreds of employees set to receive two pensions, the city of Calgary has become the prime example of the golden benefits received by those inside government.

All the while many outside the golden government gates continue to struggle.

Calgary is still suffering from the highest unemployment rate of Canada’s major cities, total workers’ pay in Alberta remains below pre-recession highs and the job situation facing young men is nothing short of alarming.

It’s clear that governments in Alberta need to better align themselves with the realities facing their citizens. At the core, the solution is really quite simple: governments need to take less and leave more.

Unfortunately, this is proving easier said than done. When you’re on the inside, there is little incentive to get off the government gravy train.

This column was originally published in the Calgary Sun on December 6, 2018.

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