Alberta government labour costs rapidly increasing while wages decrease

It was recently highlighted by the Canadian Taxpayers Federation (CTF) that even though the incomes of Albertans fell 6 percent between 2014 to 2018, during the same period, municipal labour costs in Alberta have risen 16.9 percent, which is an additional $873 million. 

For big cities, Leduc had the fastest-growing labour costs at 33.3 percent, and Medicine Hat had the lowest at a much more reasonable 5 percent over the four years. 

Edmonton’s labour spending increased by 17.7 percent, and Calgary did better with 12.9 percent, but together the two largest Albertan cities’ labour costs increased a combined $468,841,000 million.

The trend of fast-increasing municipal labour costs is hitting nearly all of Alberta’s large cities and continues down to small towns.

The bloating of labour costs is also not only restricted to municipalities, as even the province’s labour costs have climbed 12.7 percent despite most private-sector workers experiencing decreasing compensation or even job losses. 

In the CTF’s report on labour costs, they point to the lack of control on the growth of government worker labour costs as being a significant factor in the inability of the Alberta government to ease the burden on taxpayers.

The report reads, “If municipal governments are going to reduce costs to provide necessary tax relief significantly, many will need to address their growing labour costs.”

The actions of the United Conservative Party government have not been taken into account in the analysis of labour costs, with the only parties in power over those 4 years being the Progressive Conservatives and the New Democrats. 

Things may or may not have improved with Premier Kenney having pursued some mild budget cuts. Still, it seems from the CTF’s report that deeper cuts would likely be needed if the current imbalance between the public sector and private sector salaries is to be corrected.

It will be interesting to see how the Alberta government will try and control labour costs in the coming years with the setbacks the COVID-19 pandemic has put the economy through.