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Alberta panel says savings to be found in health, education changes

WATCH: Alberta's current fiscal crisis is arguably worse than it was in the early 1990s. That's the finding of the MacKinnon Panel on Alberta's finances. Tom Vernon has more on changes the panel is urging the government make.

A panel looking into Alberta’s finances says the province habitually overspends on its services and needs to get tough on schools, have university students pay more and force doctors to charge less.

The panel, chaired by former Saskatchewan finance minister Janice MacKinnon, says in a report that Alberta’s annual expenditures would be $10.4 billion less if the province were to spend the same per person as do British Columbia, Ontario and Quebec.

LISTEN: Janice MacKinnon reviews the panel’s findings on Alberta’s finances

It says that if Alberta matched the other provinces, it would have a $3.7-billion surplus this year instead of a $6.7-billion deficit.

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READ MORE: Higher oil prices, more tax income: Alberta ends 2018-19 with smaller deficit

Alberta’s spending per capita is the highest in Canada, the report adds. And its debt is on track to reach $100 billion in four years.

LISTEN: Finance Minister Travis Toews joins Calgary Today to look at the MacKinnon panel report on Alberta’s finances

To balance the budget by 2022-23, as the United Conservative government has promised, the panel suggests there be no increases in government spending for four years and a reduction in operating costs by at least $600 million, as well as cuts in capital spending.

LISTEN: Trevor Tombe joins Rob Breakenridge to look at both sides of the equation of Alberta’s finances

“Raising taxes is not the answer. Alberta has a spending problem and the government needs to act quickly and decisively to reduce its spending,” MacKinnon told reporters at a news conference Tuesday.

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“The province needs to go beyond merely cutting spending to transform the way services and programs are delivered.”

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LISTEN: Duane Bratt joins Ryan Jespersen to talk about the politics of “bold change” coming with the MacKinnon report

Premier Jason Kenney ordered the report shortly after his United Conservatives were elected in April.

“We must act now,” said Alberta Finance Minister Travis Toews. “Future generations and Albertans today are counting on us to make the decisions that will put us back on a solid fiscal path.”

READ MORE: Former Saskatchewan finance minister advising Alberta government on fiscal plan

Among the report’s 26 recommendations are sweeping reviews of health care and education.

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The report recommends making greater use of private or not-for-profit clinics to deliver health services that don’t need to be done in hospitals. It suggests limiting the costs doctors charge for services and using legislation if new fees can’t be negotiated.

The report calls for cuts to administration costs in education and funding incentives for school boards based on better educational outcomes.

LISTEN: Danielle Smith talks about the MacKinnon report with Finance Minister Travis Toews, Alberta NDP deputy leader Sarah Hoffman, CFIB VP Richard Truscott and former MLA Rick Fraser

It recommends ending a tuition freeze for post-secondary students and suggests “the government should move quickly to address the future of those post-secondary institutions that do not appear to be viable in future funding scenarios.”

When it comes to public-sector bargaining, the report says there needs to be salary restraint across government and legislation should be used to set wage levels.

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LISTEN: Economist Moshe Lander joins Ryan Jespersen to look at the arguments used in the MacKinnon report

“What we learned today is it’s going to hurt — that health-care services are going to be reduced and many of us are going to be paying out of pocket for things that we need,” said Shannon Phillips with the Opposition NDP.

“Our tuition fees are going to go up. Our school fees are going to go up. We learned that we’re going to be paying more for less.”

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Phillips said it’s an approach that is going to be viewed as aggressive by physicians, teachers and public-sector employees.

LISTEN: University of Lethbridge economics professor Richard Mueller joins Ryan Jespersen to look closer at the finances report

“Essentially to go to war with doctors and I don’t think that will be productive at all. And there’s further indications that they want to go to war with the public sector, which is going to be tremendously expensive,” she said.

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READ MORE: Judge grants union injunction against UCP government’s public sector wage bill: AUPE

An official with the Alberta Medical Association said the group is reviewing the report and declined comment.

Toews said nothing is written in stone yet regarding labour negotiations.

“We wanted to ensure that we were well informed before we continued with labour discussions with the public sector,” he said.

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The Canadian Taxpayers Federation said the findings show Alberta needs to do better.

“This isn’t rocket science,” said Alberta director, Franco Terrazzano. “If B.C. and Ontario can figure out a way to provide quality services for significantly less money, then why can’t Alberta?”

WATCH: Alberta unions react to provincial panel saying savings to be found in health, education

Alberta unions react to provincial panel saying savings to be found in health, education
Alberta unions react to provincial panel saying savings to be found in health, education

The head of the Alberta Federation of Labour called it an attack on public services, children’s education and jeopardizes the future of all working Albertans.

“The MacKinnon report is a prescription for disaster and will not lead Alberta to prosperity,” said president Gil McGowan.

“If these recommendations are put into place, they will make Alberta’s economy sicker.”

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LISTEN: Crestview Strategy’s Melissa Caouette joins Ryan Jespersen in-studio to discuss how the Kenney government could make cuts proposed in the MacKinnon report

Ron Kneebone, an economics professor at the University of Calgary, said there are no real surprises in the report.

“It’s just confirming the general direction that the government ran its election campaign,” he said.

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“It didn’t seem to be any big hurry … They’re still talking about balancing the budget by 2023.”

WATCH: Edmonton chief economist on how MacKinnon Panel findings could affect the city’s finances

Edmonton chief economist on how MacKinnon Panel findings could affect the city’s finances
Edmonton chief economist on how MacKinnon Panel findings could affect the city’s finances
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READ MORE: Oil prices, tax income keep Alberta Q1 revenue in line with last year

Here are some of 26 recommendations the report makes:

  • Use alternative medical service delivery, including private clinics, for day procedures and other medical services that don’t have to be done in hospitals.
  • Limit the high cost of doctor services by having physicians move to alternative payment plans, renegotiate its agreement with the Alberta Medical Association and also consider legislation.
  • Revise school funding. Specifically decrease the amount that goes to administration and governance.
  • Lift the current freeze on post-secondary tuition. Have institutions rely less on government grants and more on tuition and alternative revenue sources.
  • Create legislation that sets salary levels for all public-sector workers and applies to all negotiations and arbitrations. It would form the basis for back-to-work legislation.
  • Adopt a fiscal rule that limits annual increases in total program spending to the projected increase in total household incomes.
  • Balance the budget by 2022-23 and introduce a legislated plan to eliminate the net debt by 2043-44.
  • Establish a fixed budget date.
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