The United Conservative government has been told it needs to tighten the belt inhealth and education spending in order to balance Alberta's budget by 2023-24, which it promised during the election campaign to do without making funding cuts in either sector or raising taxes.

A "blue ribbon panel"—lead by former Saskatchewan finance minister Janice MacKinnon and directed in May to examine the province's fiscal situation—reported Tuesday it found "Alberta has a spending problem." 

The panel also presented what it called an "ambitious plan" to bring Alberta's spending in line with other provinces: 26 recommendations that range from transferring hospital responsibilities to clinics and considering lifting the post-secondary tuition freeze, to legislating public sector salaries.

"Implementing it will require difficult choices and bold action," MacKinnon said Tuesday.

"Challenging decisions will be required, but once the budget is balanced, there will be opportunities to reduce taxes and invest in new programs."

She said the panel's findings—generally, that Alberta overspends and underperforms—should be concerning for all Albertans.

'Fewer hospitals, more clinics. Fewer doctors, more nurse practitioners'

Alberta's health spending, measured at $20.4 billion or 42 per cent of the province's operating costs, was found to be higher than that of Canada's three largest provinces.

In 2017-18, Alberta's per capita health spending was $5,000, while Quebec's was $4,550, B.C.'s $4,400, and Ontario's just $4,300. Since 2002, Alberta's health expenditure grew 188 per cent, while that of the other three provinces compared in the report grew between 95 and 125 per cent.

Much of health budget constitutes physician salaries and hospital spending, meaning efficiencies need to be found through a major transformation, the Blue Ribbon Panel recommended.

"Fewer hospitals, more clinics. Fewer doctors, more nurse practitioners. Using private clinics—Saskatchewan used private clinics for services, costs reduced by 26 per cent," MacKinnon said.

The NDP, however, said it believes the Blue Ribbon Panel's report was meant to "create some cover" for the UCP to slash health and education dollars.

"What (Premier Jason Kenney) said was he wasn’t going to attack teachers and nurses, and what this report is doing is proposing attacks to those exact contracts," NDP MLA Sarah Hoffman told CTV News Edmonton.

"They say they don’t have money but at the same time they’re cutting corporate taxes. This is circular logic."

'An ironic welcome-back-to-school': ATA responds to Blue Ribbon Panel report

The Alberta Teachers' Association also expressed disappointment in the Blue Ribbon Panel's report, which suggested the current education model should reduce administrative and government spending, and incentivize sharing services between schools.

"I find it kind of an ironic welcome-back-to-school that this report would be delivered on the same day most students across this province are attending school for the first time in the fall," said ATA President Jason Schilling.

The panel reported operational funding for K-12 schools saw an 80 per cent increase between 2004 and the 2018-19, while inflation and enrolment increased 33 and 25 per cent, respectively.

The panel also found Alberta spends more per post-secondary student than British Columbia, Quebec and Ontario—the latter by more than $15,000.

"It wasn't as if there was one department here that was overspending," MacKinnon told media. "Every one we looked at, and we only looked at the big spenders, are spending more than other provinces."

But Schilling said the panel's recommendations undermine confidence in public education, and would ignore the complexity of current classrooms and Alberta's diverse school districts.

"You need to take a look at what is on the paper and apply it to people," Schilling said.

He suggested efficiencies would be better found elsewhere, such as the standardized testing regime.

MacKinnon's panel also found the province spends too much on post-secondary education, and recommended Alberta look at increasing revenue from other sources.

B.C. and Ontario, the report notes, are less dependent on government funding—by 10 and 18 per cent, respectively—and take in more money from tuition and school fees.

As well, the panel recommended the province reassess the "financial viability" of the province's 26 post-secondary institutions.

Balancing the budget requires 'restraint in the compensation and the size of the public sector'

According to the panel's report, Alberta's debt could exceed $100 billion in four years, and interest payments could grow to $3.7 billion per year.

To balance the budget by 2023-24 without raising taxes, the report claims Alberta would have to cut its operating budget by $600 million each year.

The Blue Ribbon Panel suggests public sector salaries can help make up the difference.

"Public sector salaries in Alberta are higher than comparable provinces, and they have to experience restraint," MacKinnon said.

Mount Royal University political scientist Duane Bratt believes cuts are sure to come in the future.

"If you're going to balance the budget through spending, you've got to go after wages," he said.

He added that while cuts by a United Conservative government aren't surprising, the panel's suggestion of legislating mandates is new.

"That's why this goes well beyond the budget. It's going to involve the labour minister, the education minister and health minister. There's also reference to back-to-work legislation, which tells me the government is expecting major pushback."

The president of the Alberta Union of Provincial Employees called the report an unsurprising but black-and-white "roadmap to a full-frontal attack on frontline public service workers."

"We've prepared our members for this," Guy Smith said.

He added their work which started in opposition to Bill 9 would only grow after the report's release.

"We're going to have to stand up and fight back on behalf of our members and the services they provide to Albertans."

However MacKinnon said she didn't think any government should start with strong-arming change: "But you have to have changes in the contract. So that's an option."  

The province has been reviewing the report for more than two weeks. While the government doesn't have to follow its recommendations, Finance Minister Travis Toews said it would be taking them seriously.

"We have the stomach to be responsible to the Albertans that elected us to bring this province to fiscal balance. We're committed to that."

The government has not announced when it will be releasing its first budget in the fall.

With files from Timm Bruch