Spending cuts, layoffs the wrong way to respond to financial crisis: AUPE President
EDMONTON – Albertans need to tell Premier Ed Stelmach and his government that big spending cuts and massive job losses are a formula for economic disaster and exactly the wrong way to respond to a worldwide financial crisis, says the president of Alberta’s largest union.
“We have been here before when Ralph Klein was premier and Albertans are aware of the damage that was done to our health care system, for example, from which we are yet to recover,” said Alberta Union of Provincial Employees President Doug Knight.
“We expect Albertans will tell their government that to weather this worldwide economic storm our economy requires stimulus and a steady hand,” Knight said. “There is a reason that virtually every other government in Canada and throughout the world is responding to the present situation with economic stimulus packages.”
Knight noted that just last November the economically conservative Conference Board of Canada said in a report that “it would be wrong-headed economically to cut programs or reduce total planned government spending during an economic slowdown in order to attain a pre-determined fiscal surplus or balance target.
“This strategy would only reduce demand growth and make a difficult situation worse,” the Conference Board said in the paper entitled Fending Off a Canadian Recession.
Said Knight: “A panicked response to low crude oil prices – which are as obviously a temporary phenomenon as were last summer’s very high prices – is a recipe for doing serious harm to Alberta’s economy.”
Knight was responding to comments yesterday in separate interviews by the premier and the Treasury Board President Lloyd Snelgrove that depressed energy prices combined with Alberta’s no-deficits legislation could force the province into strategies reminiscent of the so-called Klein Revolution.
“We may go back to the same strategies we used in the early 1990s,” Stelmach told a reporter from the Calgary Herald. Snelgrove suggested in an interview with the Canadian Press that he wanted to meet union leaders to talk about possible mid-contract concessions and job cuts.
Starting in 1993, the Alberta government slashed program spending, rolled back wages throughout the public sector and cut thousands of public sector jobs to help reduce deficits and pay off debt.
“I think Albertans want a calm and reasoned response to the world economic crisis,” Knight said this morning. “The premier and Mr. Snelgrove have floated a trial balloon and Albertans need to let them know they don’t want to be stampeded into measures that will do more harm than good.”
Knight said it is inappropriate for either AUPE or the government to be “negotiating through the media,” so he would wait until the union has an opportunity to see what the government is really proposing, presented through proper channels, before making specific responses.
“The first we heard of these ideas was when we received calls from reporters yesterday,” he noted. “No employer, including the government, has raised these concerns with us to date.
“As the union for all direct employees of the Alberta government and many others throughout the public sector, we have a lot of questions about what the government is thinking that are not answered by reading short newspaper reports,” he said.
However, Knight said that as a general principle massive job cuts would not only hurt employees of government, health facilities, schools, post-secondary institutions, boards, agencies and other public-sector employers, but hundreds of thousands of other Albertans whose jobs are directly linked to their spending patterns.
“I am sure that many public employees will now hesitate to make major purchases such as housing, new cars and appliances because of the concerns these remarks create, and this will hurt the Alberta economy and specifically the private sector,” he said. “This comes at exactly a time when we are being told that there needs to be increased economic activity.
Knight also said that cuts in program spending and government jobs would hurt Alberta’s long-term ability to recruit and retain good employees, both in government and the private sector.
In addition, he said, such policies can do grave damage to public institutions on which Albertans depend.
“Our health care system has never recovered from what was done to it in the mid-1990s,” he said. “Surely the government is not proposing to create havoc in the system all over again.”
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For more information, contact:
Doug Knight, President, AUPE, 780-0930-3301 or 780-265-6655 (cellular phone)
David Climenhaga, Communications Director, AUPE, 780-930-3311 or 780-717-2943 (cellular phone)
AUPE Offices can be reached by calling toll free – 1-800-232-7284