PC backbencher Genia Leskiw said the advocate, Del Graff, had not made his case on why the refund was critical.
"I really don't believe that they've sharpened their pencils as sharp as they could have, and there are a lot of other agencies that look after youth," said Leskiw following the decision Tuesday of the all-party legislative offices committee.
"Tough choices have to be made and ... everybody has to share in those tough choices."
Graff said the money was needed to keep up with responsibilities added to his mandate last spring to strengthen his investigations into the deaths of children in care.
Graff said the cash would was to pay for three new investigators and two analysts who were hired to handle the extra workload.
Investigations and recommendations on a single case already take up to a year, he said, and he fears it will take even longer now.
"Without being able to have the commitment that was made in 2014 to those (five positions), we've got to find that money somewhere —and it has to come from the resources that support our investigations.".
Graff, along with representatives of the auditor general's office, asked the committee to return some of the money cut from their 2014 budgets in December.
Premier Jim Prentice has announced austerity measures throughout government as the province wrestles with billions of dollars in lost revenue due to the steep plunge in oil prices over the last six months.
The Tories used their majority on the committee to reject Graff's request.
Liberal Laurie Blakeman and Dave Eggen of the NDP both voted for the increase.
Blakeman told the committee that children are paying for the Tory government's failure to follow through on its long-standing promise to wean Alberta's day-to-day spending off historically volatile energy prices.
"What are you going to do when oil hits $20 a barrel? Stop teaching children? C'mon," Blakeman said.
"Let's not forget, we (as a government) specifically told the child and youth advocate office to expand their mandate to meet a need that exists in this province," Eggen told reporters.
Enough Tories sided with Blakeman and Eggen to return $546,000 to the auditor general's office.
Executive director Ruth McHugh told the committee the office could reduce all but $546,000 of the $1.8 million the government asked it to cut. To go further would compromise its ability to do its jobs, she said.
McHugh noted that the government had made decisions that allowed the province to collect an extra $15 million from private insurance companies for health care.
"This alone more than offsets our funding requests, and illustrates how our work has the potential to save money now and bring exponential value in the long run."
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