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Pay boost OK if they perform

Author: John Carpay 2005/05/31
Should the salaries of Alberta's top bureaucrats rise from $161,000 to $200,000 per year? Should the current bonus, which ranges from $28,000 to $32,000 for all deputy ministers, be replaced with a new bonus plan that ranges from $0 to $60,000?

Premier Klein will soon decide on these and other recommendations made in the Final Report on Compensation for Alberta Government Senior Officials.

This report claims that Alberta's top civil servants earn 14% less than their counterparts in other provinces. But that claim is somewhat misleading, because only Ontario, Quebec and B.C. were considered, and these provinces all have more people than Alberta.

Ontario's deputy minister of health has at least three times as much responsibility as Alberta's deputy minister of health. The same holds true for education, welfare, transportation, justice, etc. Deputy ministers in B.C. and Quebec also shoulder a greater burden than Alberta's senior officials.

In spite of this misleading claim, there is nothing wrong with a deputy minister earning between $200,000 and $260,000 per year.

However, there is a problem with these high salaries if there are no clear conditions or criteria to ensure that a person receiving this salary actually deserves it.

Measuring competence and performance in the artificial world of government is no easy task. I call this world "artificial" because it has no bottom line.

Government gets its money from taxpayers regardless of its performance. Citizens have no legal grounds for refusing to pay taxes - not incompetence, not arrogance, not waste, not even corruption and the theft of tax dollars.

Anyone who challenges the legal obligation to pay taxes in court will be told by an unsympathetic judge that the solution is electing a different - and hopefully better - bunch of politicians. But elections come once every four years, and government will still get its money from us regardless of competence.

Contrast this artificial world of government with the reality faced each day by Albertans in the private and non-profit sectors. We must perform well to please our clients, customers and donors, or face the prospect of going out of business. For most goods and services, consumers have the option of taking their business elsewhere. But taxes have to be paid whether the government does a good job or not.

Pay increases for deputy ministers and other senior officials should be tied to measurable performance standards, and taxpayers have a right to know specifically what those standards are.

Paying deputy ministers in the $200,000 to $260,000 range is fine if they produce good results, find efficiencies, and reduce costs. For example, if eliminating waste and reducing bureaucracy saves taxpayers $100 million per year, then paying an additional $10 million in salaries and bonuses to senior officials is a good deal for taxpayers.

Alberta's government has become a lot bigger in the past nine years, but has it become any better?

Spending on government programs is up by 100% in just nine years, rising from $12.7 billion in 1996 to $25.5 billion today. Alberta's population growth (17%) and cumulative inflation (27%) during this period are tiny compared to this 100% spending increase.

Alberta's government now employs 26,811 bureaucrats. That excludes nurses, teachers, doctors, policemen, firefighters and other public sector workers. The health ministry alone employs 1,378 bureaucrats - an eleven per cent increase over last year - and the Ministry of Restructuring and Government Efficiency employs 1,272.

Alberta's cabinet has grown from 17 ministers in 1992, to 24 ministers today. Taxpayers would be far better off paying 17 deputy ministers $200,000 than each than paying 24 deputy ministers $161,000 each.

Compensation for deputy ministers should be linked to clear and specific performance criteria, including the criterion of saving taxpayers money by finding efficiencies and reducing the size of government. Paying senior officials competitive salaries is good for taxpayers if these people find ways to make government better rather than bigger.

Senior officials should receive these proposed pay increases only after the government has established criteria that are both specific and measurable, including a criterion to reduce the size of Alberta's growing bureaucracy.

And these raises should go to 17 deputy ministers, not 24.

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