Why Alberta spends more on health and education

In 2019, the newly-elected UCP government recruited a panel to examine Alberta’s finances to provide the government with justification for spending cuts over the next four years.

Leading the panel was Janice MacKinnon, who was Saskatchewan’s finance minister while that province’s New Democratic Party was in power under Roy Romanow in the early 1990s.

While finance minister, MacKinnon implemented an austerity budget, which resulted in the closure of over 50 hospitals; the axing of both the children’s dental plan and universal prescription drug program; and funding cuts to schools, hospitals, universities, and municipal governments that ranged from 5% to 13%.

MacKinnon and her panel released their report in August 2019.

There are two aspects to that report that I want to cover in this article: health spending and post-secondary spending.

In their report, the panel claimed that Alberta spends more per capita on health care than the provinces of Ontario, BC, and Québec.

Relative to other comparable provinces, Alberta spends more per capita on health care. Alberta spends $5,077 per capita, while Ontario spends $4,080, British Columbia spends $4,267 and Quebec spends $4,370. If Alberta spent the per capita average of Canada’s three other large provinces, it would spend $3 .6 billion a year less than it currently spends on health care.

Report and Recommendations of the Blue Ribbon Panel on Alberta’s Finances, p. 24

Here it is in a table, taken from the report.

As well, the report claimed that Alberta was spending more per student full-time equivalent than those same three comparator provinces.

Alberta spends significantly more per student full-time equivalent (FTE) than the three comparator provinces. Alberta spends $36,500 per FTE while British Columbia spends $31,300 ($5,200 less), Ontario spends $21,500 ($15,000 less), and Quebec spends $25,800 ($10,700 less).

Report and Recommendations of the Blue Ribbon Panel on Alberta’s Finances, p. 39

And here it is also in table form (particularly the bottom row).

On the surface, this seems to be a good reason for a government to want to reduce spending in health and postsecondary education. After all, if we’re spending more than everyone else (or at least more than just 3 other provinces), then maybe we’re spending too much.

But there’s a reason why we’re spending more.

I mean, there are probably several reasons. We’re going to hone in on two here.

First, let’s look at the cost of living.

The consumer price index represents changes in prices as experienced by Canadian consumers. It measures price change by comparing, through time, the cost of a fixed basket of goods and services.

This is how we measure inflation.

Here is the consumer price index for each province as of January 2023.

AB	160.5
PEI	160.1
NS	157.3
SK	156.7
MB	156.2
NL	155.9
ON	155.7
NB	154.9
QC	149.9
BC	148.1

We can see that Alberta has the highest CPI in the country. But it’s not just this past January. Here, check out what CPI looks like in every province over the last decade.

Alberta is represented by that yellow line at the top.

Every January over the last 10 years, Alberta has had the highest consumer price index in the country. In other words, it’s more expensive here in Alberta.

But it’s not just the cost of living.

Take a look at the median weekly wage for each province, as of December 2022.

AB	$1,268.07
ON	$1,197.94
NL	$1,176.83
BC	$1,153.32
SK	$1,147.21
QC	$1,129.54
NB	$1,077.70
MB	$1,073.01
NS	$1,033.77
PEI	$985.86

Alberta has the highest median weekly wage. And, once again, it’s not just in December. Take a look at the median weekly wage in each province every December since 2013.

Again, that solid yellow line is Alberta, and again, Alberta leads the province in median weekly wage. In other words, Alberta has the highest wages in the country.

So if everything costs more here and people get paid more to work here, then it makes sense that we will pay more to deliver publicly-funded healthcare and postsecondary education here.

It means that hospitals will have to pay shipping companies more to delivery the new equipment they purchased. Doctors will need to pay the janitorial company more that cleans their clinic. And if a plumber or a web designer is going to make more in Alberta, then it makes sense that a nurse or a radiologist will, too.

It means it’s going to cost universities and colleges more to pay someone to transport supplies, to clean your floors, to repair your equipment, to design your website. And if truckers, and custodians, and mechanics are making more than their peers in other provinces, why shouldn’t professors, or teaching assistants, or planners, or advancement officers?

Alberta can’t have it both ways. We can’t brag about incomes being higher than in other provinces and then complain that we have to spend more than other provinces.