Alberta agency, board and commission exec salaries to be reined in

At least 27 Alberta executives who make more than $200,000 annually will be affected by changes to salaries at provincial agencies, boards and commissions under proposed legislation introduced Wednesday.

Bill 19 will give the government the authority to introduce the compensation framework and to compel ABCs to disclose salary amounts, an ability it doesn't have now.

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The pay grades will be determined this summer with the help of an independent consultant. They will vary depending on the complexity of positions and the size of the organization.

Finance Minister Joe Ceci acknowledged he and his department officials were surprised at how salaries at ABCs '"diverged" from those in the public service. He said the government wants all public sector salaries to be consistent, fair and transparent. 

"The former system had so few accountability measurements or mechanisms that there was really no effective way to measure savings at this point," Ceci said. "That's why I think the change is necessary and long overdue." 

If passed, Bill 19 will initially apply to ABCs included in the recently completed first phase of a three-part review, initially affecting 27 CEOs who have salaries exceeding $200,000. Ceci said the legislation is written in a way that will eventually include other executives and board members.

Once the bill is passed, the government can start collecting salary information that will be used to determine pay grades.

CEOs with salaries higher than the new pay grades will be subject to the changes once they renew their contracts. Others with longer contracts will have their salaries reduced to the appropriate pay band in two years.

The government intends to discourage the use of performance bonuses but will allow them if a strong case can be made to the Treasury Board.  

The system will effectively end the long-standing practice of ABCs setting compensation packages independently of the government, and of each other.

Wildrose finance critic Derek Fildebrandt said he likes the direction of the bill.

"It's long overdue that we get executive compensation at our agencies, boards and commissions under control and some kind of common-sense direction," he said.

Fildebrandt said while this is a good step, he wants the government to also keep a lid on the salaries paid to unionized public sector employees.

"Unless the government is willing to extend the principles it's talking about in this bill to the broader public service for its unionized employees, it's unlikely to make any serious dent in the deficit," he said.

Fifteen ABCs were eliminated in the first phase of the review, with another 11 amalgamated into three agencies, moves the government estimates will save $33 million over three years.

Post-secondary institutions will be examined in the third part of the review. The pay bands will apply to them, once the review is complete.

In 2009, the auditor general recommended the previous Progressive Conservative government get a handle on compensation and termination packages paid to ABC executives.

Ontario, B.C. and Nova Scotia are also trying to standardize salaries for their agencies, boards and commissions.

Salaries paid to employees of ABCs who make more than $125,000 will be disclosed in the sunshine list for the first time on June 30.

All compensation and severance pay will be disclosed starting in 2017.