02/05/2015 02:37 EST | Updated 04/07/2015 05:59 EDT

Alberta Freezes Health Salaries, Implements Other Austerities

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EDMONTON - Alberta Health Services is freezing salaries and holding the line on union raises to help the province cope with billions of dollars in lost revenue due to low oil prices.

But AHS president Vickie Kaminski said Thursday the changes will be made judiciously to avoid affecting front-line care.

"We're going to have to make some difficult decisions in the coming months," Kaminski told a news conference.

"But I would like to assure Albertans that every option will be explored to minimize the impact on the delivery of health-care services in this province."

Kaminski was responding to a government directive sent to AHS in late December to implement cost restraints.

Premier Jim Prentice has said fundamental changes will need to be made across the board to deal with $7 billion in lost revenue due to low oil prices.

Prentice has said he is looking at changes to personal income tax and capital projects. But he has ruled out a provincial sales tax and said corporate taxes and oil royalties won't be touched.

Kaminski said AHS managers are under a salary freeze for the next fiscal year and unionized members will be offered zero per cent salary increases.

She said new rules will be put in place to reduce procurement and travel costs.

There will also be renewed vigilance and support to reduce staff sick days, which cost an estimated $190 million a year, Kaminski said.

Other new rules are being put in place to reduce cellphone charges. Kaminski said that cellphone bills in the last 18 months alone cost $825,000.

"We cannot tolerate Alberta Health Services using taxpayers' dollars to pay for monthly roaming charges in the thousands of dollars, as we have just determined to be the case."

Kaminski also said she is disturbed by the high cost of severance payments — $28 million since 2011 — handed out to 660 employees.

About $4.4 million of that severance went to 12 executive members, she said.

"In recent years ... I think (the severance payment issue) has cast a dark shadow over Alberta Health Services," she said.

"I have directed that rigorous performance management is to be undertaken to avoid the need for payment of severance."

Alberta Health Services is responsible for front-line care and spends one-third of Alberta's $44-billion operating budget.

Also Thursday, Finance Minister Robin Campbell launched an online survey to give Albertans a chance to weigh in on how to change the province's economic model.

Campbell said the plan is to continue building roads, schools and hospitals despite the economic downturn.

"We're going to have a very aggressive infrastructure plan," he said.

The new budget, to be released next month, will have a $29-billion capital plan spread over five years. Some of that money will be borrowed, he said.

Department spending is also being scrutinized.

"There are some programs that are nice to have. Some of those programs might not be there," said Campbell.

"But as far as the core services and making sure that Albertans receive those services, we'll continue to provide them."


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