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Alberta

Provincial Government to slash public sector pay 2%

Published

5 years ago

3 minute read

From The Province of Alberta

Public sector wage restraint: Minister Toews

Travis Toews, President of Treasury Board and Minister of Finance, issued the following statement on the continuation of 2019 public-sector wage arbitrations:

“As promised, 2019 public-sector wage arbitrations will continue after Oct. 31 with an updated monetary mandate that reflects the reality of Alberta’s growing debt and the unacceptable deficit this government inherited.

“The revised position comes after government took the time to fully assess Alberta’s economic situation, including findings of the MacKinnon panel report, which recommended public-sector wages be brought in line with comparable provinces to correct overspending and sustain high-quality services for Albertans.

“We cannot ask Alberta taxpayers to fund public-sector pay raises during a time when far too many workers in the private sector have lost their jobs and many others have seen significant pay cuts in recent years.

“We are all in this together as Albertans. We all have to do our part to live within our means, and that includes government. Our MLAs have rolled back their salaries by five per cent and the Premier has cut his salary by 10 per cent. This is on top of five per cent cuts to MLA salaries a few years ago.

“Public-sector pay accounts for over half of government expenses, and compensation for public-sector workers in Alberta is, in most cases, significantly higher than in other comparable provinces. During better times, public-sector wages rose rapidly – far faster than inflation and population growth.

“The revision moves from the previous position of no increase for 2019 to an average two per cent reduction for collective agreements that include a 2019 wage reopener.

“We have the highest respect and admiration for Alberta’s public-sector workers, whose dedication helps deliver so many of the vital services Albertans rely on. But we were elected to be responsible stewards of the public’s tax dollars and to get our province’s finances under control.

“Each one per cent increase of the $26.9 billion spent annually on wages means an additional $270 million cost to taxpayers, forcing a choice between higher taxes for Albertans at a time when they are facing economic uncertainty or cuts to government programs.

“The pause provided by Bill 9 gave us the clarity and information we needed to make prudent financial decisions that are in the best interests of all Albertans without continuing to pile up unnecessary and destabilizing debt. The updated arbitration mandates are based on that reality.”

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After 15 years as a TV reporter with Global and CBC and as news director of RDTV in Red Deer, Duane set out on his own 2008 as a visual storyteller. During this period, he became fascinated with a burgeoning online world and how it could better serve local communities. This fascination led to Todayville, launched in 2016.

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Alberta

Alberta takes big step towards shorter wait times and higher quality health care

Published on April 9, 2025

By

From the Fraser Institute

By Nadeem Esmail

On Monday, the Smith government announced that beginning next year it will change the way it funds surgeries in Alberta. This is a big step towards unlocking the ability of Alberta’s health-care system to provide more, better and faster services for the same or possibly fewer dollars.

To understand the significance of this change, you must understand the consequences of the current (and outdated) approach.

Currently, the Alberta government pays a lump sum of money to hospitals each year. Consequently, hospitals perceive patients as a drain on their budgets. From the hospital’s perspective, there’s little financial incentive to serve more patients, operate more efficiently and provide superior quality services.

Consider what would happen if your local grocery store received a giant bag of money each year to feed people. The number of items would quickly decline to whatever was most convenient for the store to provide. (Have a favourite cereal? Too bad.) Store hours would become less convenient for customers, alongside a general decline in overall service. This type of grocery store, like an Alberta hospital, is actually financially better off (that is, it saves money) if you go elsewhere.

The Smith government plans to flip this entire system on its head, to the benefit of patients and taxpayers. Instead of handing out bags of money each year to providers, the new system—known as “activity-based funding”—will pay health-care providers for each patient they treat, based on the patient’s particular condition and important factors that may add complexity or cost to their care.

This turns patients from a drain on budgets into a source of additional revenue. The result, as has been demonstrated in other universal health-care systems worldwide, is more services delivered using existing health-care infrastructure, lower wait times, improved quality of care, improved access to medical technologies, and less waste.

In other words, Albertans will receive far better value from their health-care system, which is currently among the most expensive in the world. And relief can’t come soon enough—for example, last year in Alberta the median wait time for orthopedic surgeries including hip and knee replacements was 66.8 weeks.

The naysayers argue this approach will undermine the province’s universal system and hurt patients. But by allowing a spectrum of providers to compete for the delivery of quality care, Alberta will follow the lead of other more successful universal health-care systems in countries such as Australia, Germany, the Netherlands and Switzerland and create greater accountability for hospitals and other health-care providers. Taxpayers will get a much better picture of what they’re paying for and how much they pay.

Again, Alberta is not exploring an untested policy. Almost every other developed country with universal health care uses some form of “activity-based funding” for hospital and surgical care. And remember, we already spend more on health care than our counterparts in nearly all of these countries yet endure longer wait times and poorer access to services generally, in part because of how we pay for surgical care.

While the devil is always in the details, and while it’s still possible for the Alberta government to get this wrong, Monday’s announcement is a big step in the right direction. A funding model that puts patients first will get Albertans more of the high-quality health care they already pay for in a timelier fashion. And provide to other provinces an example of bold health-care reform.

Nadeem Esmail

Senior Fellow, Fraser Institute
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Alberta

Alberta’s embrace of activity-based funding is great news for patients

Published on April 9, 2025

By

From the Montreal Economic Institute

Alberta’s move to fund acute care services through activity-based funding follows best practices internationally, points out an MEI researcher following an announcement made by Premier Danielle Smith earlier today.

“For too long, the way hospitals were funded in Alberta incentivized treating fewer patients, contributing to our long wait times,” explains Krystle Wittevrongel, director of research at the MEI. “International experience has shown that, with the proper funding models in place, health systems become more efficient to the benefit of patients.”

Currently, Alberta’s hospitals are financed under a system called “global budgeting.” This involves allocating a pre-set amount of funding to pay for a specific number of services based on previous years’ budgets.

Under the government’s newly proposed funding system, hospitals receive a fixed payment for each treatment delivered.

An Economic Note published by the MEI last year showed that Quebec’s gradual adoption of activity-based funding led to higher productivity and lower costs in the province’s health system.

Notably, the province observed that the per-procedure cost of MRIs fell by four per cent as the number of procedures performed increased by 22 per cent.

In the radiology and oncology sector, it observed productivity increases of 26 per cent while procedure costs decreased by seven per cent.

“Being able to perform more surgeries, at lower costs, and within shorter timelines is exactly what Alberta’s patients need, and Premier Smith understands that,” continued Mrs. Wittevrongel. “Today’s announcement is a good first step, and we look forward to seeing a successful roll-out once appropriate funding levels per procedure are set.”

The governments expects to roll-out this new funding model for select procedures starting in 2026.

* * *

The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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