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Public executive salaries barely affect the budget

By Kate Jacobson, March 5 2015 —

University of Calgary president Elizabeth Cannon is one of the highest paid university executives in Canada. Without benefits, her salary is over $450,000 every year. On the other hand, Alberta Premier Jim Prentice announced in late January that he would voluntarily take a pay cut of five per cent, along with his cabinet. He urged other MLAs to follow suit.

Taking pay cuts during difficult economic times is a nice gesture, but that’s all it is. Even if every MLA in Alberta took Prentice’s suggested five per cent pay cut, the savings would only be around $600,000 a year. In the scope of the provincial budget, that amount of money is irrelevant, as the provincial government makes budgets in terms of billions of dollars. 

Similarly, a five per cent reduction in Cannon’s salary would be around $22,500. That’s a lot of money to students, but it would’t have a major impact on the U of C’s operating or capital budgets.

Our obsession with the salaries of public servants mean we’re missing the real issue in Alberta. The problem with the U of C’s funding model isn’t that Elizabeth Cannon is overpaid — although she probably is. The problem is that the university doesn’t get consistent funding from the province.

Likewise, the solution to balancing Alberta’s books isn’t shaving a couple thousand dollars off the top of Prentice’s salary. The issue is that the people who benefit most from Alberta’s abundant natural resources aren’t paying their fair share. 

The CEOs of major oil companies make millions of dollars a year and they pay the same income-tax rate you do. The CEO of Talisman Energy John Manzoni made $18 million in 2012, according to the Globe and Mail. It’s a similar story all the way down to the CEO of Imperial Oil Bruce March, who makes $6 million a year. They pay the same 10 per cent provincial income-tax rate as elementary school teachers, railroad workers and the person who bags your groceries at Safeway. 

When we don’t duly tax the people and the corporations that profit off of Alberta’s oil wealth, we’re shipping away publicly owned natural resources without properly paying the public.

The oil and gas industry has the ability to provide an excellent quality of life for all Albertans, including students, union workers, nurses and teachers. But we can only do that if wealth in Alberta is fairly and progressively taxed. Middle-class families shouldn’t have to take on the burden of falling oil prices before we ask corporations to contribute. 

Continually discussing the salaries of public officials is a waste of time. Unless they’re actively committing fraud, we’re holding public servants to a drastically different standard than their private counterparts. 

Elizabeth Cannon might be overpaid, but the real problem is the oil money that’s taken out of the province without average people seeing the benefits. Symbolic gestures might look good on the news, but they don’t balance budgets.  

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