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Alberta’s public sector size, pay ‘not outstanding’ compared to other provinces: Parkland Institute

The Alberta legislature pictured in Edmonton Wednesday, Oct. 23, 2019.
The Alberta legislature pictured in Edmonton Wednesday, Oct. 23, 2019. Wes Rosa, Global News

Alberta’s public sector doesn’t stand out in size or compensation from Canada’s other provinces.

That’s the conclusion of a study from the University of Alberta’s Parkland Institute.

“There’s really nothing outstanding about Alberta there in terms of the compensation of the public sector or its size,” Robert E. Mueller, the report’s author, told Calgary Today on 770 CHQR Wednesday.

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Mueller, a University of Lethbridge economics professor, looked at the most recent data from the Survey of Employment, Payrolls and Hours (SEPH) and from the Labour Force Survey (LFS) produced by Statistics Canada, adjusting for differences in inflation between Alberta and the rest of the country, and looked at a span of time.

READ MORE: Parkland Institute calls for Alberta sales tax

Comparing public sector worker wages to private sector wages, Mueller found that the public sector is paid better than private sector.

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“Use that same metric for other provinces, Alberta public sector workers actually look to be at a disadvantage,” Mueller said.

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“In other words, they’re paid relatively more than the private sector here, but it’s not the same gap as we see elsewhere. We could argue that [public sector workers are] a bit underpaid.”

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In the report submitted to the Alberta government by Janice MacKinnon in September, MacKinnon wrote “[r]elative to British Columbia and Ontario, Alberta has higher salaries and benefits.”

In his report, Mueller pointed to Alberta’s existing overall high wages relative to other provinces and the effects on wages during economic downturn after 2014’s oil price shock.

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“So, we see those private sector wages tanking over the last four years or so and public sector wages remaining constant. When we compare it today, yes, they look a little better off than they were in the mid-2000s when they didn’t look so good.”

LISTEN: Richard E. Mueller joins Calgary Today to explain his findings on Alberta’s public sector

Mueller also notes the so-called “blue ribbon panel” report did not use both SEPH and LFS in finding public sector employment numbers and wages.

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“For our purposes, the LFS is also a better measure of employment numbers since it disaggregates both the educational services and health care and social assistance industries into public and private employees and disaggregates public administration into its subindustries,” Mueller wrote.

LISTEN: Richard E. Mueller joins Danielle Smith to look at the differences between his report and MacKinnon’s findings

“Disaggregation in this respect is important since it allows us to isolate any earnings differences between and within sectors.”

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Mueller also found that, when looking at the share of public sector workers as a proportion of the total population, Alberta matched the Canadian average in 2018, noting that percentage is about the same as it was in the mid-1970s.

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But Mueller’s report said that the overall numbers “mask some important trends” including changes under different governments and rapid increases in overall population growth.

NDP Leader Rachel Notley responds after Premier Jason Kenney gives address
NDP Leader Rachel Notley responds after Premier Jason Kenney gives address

Mueller looked at public sector employment as a proportion of total employment, finding it has been falling in Alberta and across the country.

“The size of the public sector in Alberta is still at our below the national average regardless of the metric used, even over the past four or five years when… the size of the public sector in Alberta grew,” Mueller wrote.

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“If anything, Alberta has tended to have a smaller public sector compared to other jurisdictions using certain measures. Similarly, the compensation to public employees in the province does not stand out in any way,” Mueller concluded in his report.

Jason Kenney gives sneak peek into the UCP budget during televised provincial address
Jason Kenney gives sneak peek into the UCP budget during televised provincial address

In an address to Albertans on Wednesday, Premier Jason Kenney warned of spending cuts amounting to 2.8 per cent over four years, while not cutting funding to health and education.

The provincial budget will be presented in the Alberta legislature Thursday afternoon.