"Struggling Edmontonians need tax relief, they don't need a bunch of managers managing managers," says Franco Terrazzano, Alberta director of the Canadian Taxpayers Federation (CTF). "During the downturn, you've had to pay more money so the city could hire more management bureaucrats." In light of an auditor's report, which suggested letting go of middle managers to balance Edmonton's budget, this was one such message delivered by Franco to his supporters this week.
Edmonton's recent City Productivity and Performance report revealed that the current number of city positions stands at 11,271, an increase of 6 percent since 2017. However, the report simultaneously indicated that middle management and front-line supervisor positions have increased by 21% and 19%, respectively, in that same period.
"City councillors need to cut labour costs to provide meaningful tax relief, and that means they will need to go after the bloated bureaucracy," reported Terrazzano. A June 2020 report compiled by the CTF found that Alberta's municipal government labour costs have ballooned by $873 million (17%) between 2014-18. In contrast, the total compensation for Alberta employees has declined by 6% in that same period.
Terrazzano offered further clarification on his position in an interview with The Western Standard: "...in 2018, labour costs made up more than half the budget, so meaningful tax relief will require councillors to address government compensation. There has been a shift in the organization to supervising smaller groups of employees. This is the result of adding more supervisors; we recommend Administration review supervisor responsibilities in the organization in order to reduce costs and layers of supervision."
Pay cuts in the Edmonton administration have become one of the CTF's prime targets of attack since the COVID-19 outbreak. It should be noted that, since this March, those working outside the government have faced far more significant financial consequences than those who work inside the government. Private sector employees have "suffered more in terms of layoffs and reduced hours," and there have also been numerous news stories of private-sector workers taking pay reductions. Despite a handful of news outlets describing temporary layoffs in government, there have been no media reports discussing pay reductions in the public sector since the beginning of COVID-19.
An analysis by SecondStreet found that, at the municipal level, many cities in Canada, such as Mississauga, ON and Moncton, NB, have never reduced employee pay. In contrast, others like Calgary provide data that shows no pay reductions from 1974 until the present. "City employees are long overdue for a pay cut. Unionized city employees [in Edmonton] haven't received a pay cut since at least 1985," stated Terrazzano.
Findings concerning legislated pay reductions for workers in the provincial government are similar. Of all the provinces, only Alberta and Prince Edward Island show data indicated a decrease in pay since 1994.
In light of these findings, legislated pay reductions—not just in Edmonton, but across the Canadian public sector in both provincial and municipal administrations—may help governments avoid tax increases and reduce deficits while maintaining service levels. These reductions could similarly "help level the playing field for those outside government and help avoid the more drastic measure of layoffs."
Aaron Wudrick, Federal Director of the CTF, also commented on the situation, stating, "Governments everywhere are running huge deficits and it's essential that they look for non-priority areas where they can reduce spending. Overly bureaucratic government departments are the perfect place to start."