Business
Fed executive pay rises $571 million since 2015
From the Canadian Taxpayers Federation
Author: Ryan Thorpe
Executive compensation in the federal government spiked by more than half-a-billion dollars since 2015, according to access-to-information records obtained by the Canadian Taxpayers Federation.
From 2015 to 2022, executive compensation across federal departments and agencies rose from $1.38 billion to $1.95 billion – an increase of 41 per cent. Meanwhile, the number of federal executives grew from 7,138 to 9,371 – an increase of 31 per cent.
Inflation increased by 19.4 per cent between 2015 and 2022, according to Statistics Canada data.
The average annual compensation among federal executives also rose from $193,600 to $208,480 during that period.
“Taxpayers need help with the rising cost of living, not higher taxes to pay for more highly paid paper-pushers,” said Franco Terrazzano, CTF Federal Director. “It’s a safe bet that most Canadians struggling with grocery bills, heating bills and mortgage payments aren’t losing sleep worrying that government executives aren’t paid enough, so why is the government ballooning its c-suite?”
Table: Federal executive compensation, 2015 to 2022
|
Year (as of March) |
Number of executives |
Executive compensation |
|
2015 |
7,138 |
$1,381,987,936 |
|
2016 |
7,181 |
$1,406,613,900 |
|
2017 |
7,209 |
$1,410,973,156 |
|
2018 |
7,438 |
$1,460,468,760 |
|
2019 |
7,863 |
$1,555,972,489 |
|
2020 |
8,202 |
$1,692,682,269 |
|
2021 |
8,837 |
$1,836,893,134 |
|
2022 |
9,371 |
$1,953,667,640 |
The spike in federal c-suite pay follows years of underwhelming performance results across departments and agencies.
In 2022-23, federal departments hit just 50 per cent of their performance targets, according to data from the Treasury Board of Canada Secretariat. Each year from 2018 through 2021, federal departments met less than half of their performance targets.
“Less than 50 per cent of performance targets are consistently met within the same year,” according to a 2023 report from the Parliamentary Budget Officer, the government’s independent budget watchdog.
About 90 per cent of federal executives get a bonus each year, according to records obtained by the CTF. The feds handed out $202 million in bonuses in 2022, with the average bonus among executives being $18,252.
The feds handed out $1.3 billion in bonuses since 2015. The annual cost to taxpayers for federal bonuses has risen by 46 per cent during that time.
The number of employees receiving a six-figure annual salary has more than doubled under Prime Minister Justin Trudeau.
A total of 102,761 federal bureaucrats received a six-figure salary in 2022, according to access-to-information records obtained by the CTF. When Trudeau came to power in 2015, 43,424 federal bureaucrats were collecting a six-figure salary.
The feds also handed out more than 800,000 raises between 2020 and 2022. With the feds employing about 400,000 bureaucrats, that means multiple employees received more than one raise in recent years.
Under the Trudeau government, the size of the federal bureaucracy has spiked by about 40 per cent, with more than 98,000 new hires.
“In the last couple years, taxpayers have paid for tens of thousands of new bureaucrats, hundreds of thousands of pay raises and hundreds of millions in bonuses, and we’re still getting poor performance from the bureaucracy,” Terrazzano said. “Trudeau needs to take air out of the ballooning bureaucracy, and he should start by reining in the c-suite.”
From the Fraser Institute
By Tegan Hill
According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.
The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.
For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).
And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.
In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.
This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.
Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.
Of course, if the government falls back into deficit there are implications for everyday Albertans.
When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.
According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.
Author:
Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.
Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.
The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.
Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.
“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”
Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:
- $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
- $125 million to address enrollment growth pressures in Alberta schools.
- $847 million for disaster and emergency assistance, including:
- $647 million to fight the Jasper wildfires
- $163 million for the Wildfire Disaster Recovery Program
- $5 million to support the municipality of Jasper (half to help with tourism recovery)
- $12 million to match donations to the Canadian Red Cross
- $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
- $240 million more for Seniors, Community and Social Services to support social support programs.
Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.
After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.
Revenue
Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:
- $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
- $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.
Expense
Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.
Surplus cash
After calculations and adjustments, $2.9 billion in surplus cash is forecast.
- $1.4 billion or half will pay debt coming due.
- The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.
Contingency
Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.
Alberta Heritage Savings Trust Fund
The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.
- The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.
Debt
Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.
- Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.
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