Outcome of doctor talks may lead to health premiums, Redford suggests

Alberta Premier Alison Redford ratcheted up the pressure on doctors in contract talks Monday, potentially pitting them against taxpayers by reviving health-care premiums.

In a teleconference town hall with 5,000 party supporters, Redford suggested that how talks go with the physicians could affect whether the province brings back Alberta Health premiums after a four-year absence.

"We know that doctors earn between 20 and 29 per cent more in Alberta than they do across the country," said Redford.

"Quite frankly, before I start asking Albertans to pay health care premiums, I want to make sure that we're getting the best deal possible with our doctors.

"At the end of the day, I think that's really where we start to save some money with respect to things like health care."

The Alberta Medical Association and the province have been negotiating a new deal for doctors for almost two years. The deadline for those talks was recently extended until after Redford's government delivers its 2013-14 budget on March 7.

The premiums brought in $1 billion a year to provincial coffers before being cancelled by former premier Ed Stelmach in 2009, fulfilling an election promise he made a year earlier.

Until the province took it over, the premium cost families about $1,056 a year. Single Albertans paid half that amount. According to budget documents in 2008, axing the premiums was equivalent to a 12 per cent cut in personal income tax.

Redford says times have changed. Last Thursday, in a televised address to the province, she said her government is facing a $6-billion shortfall in the upcoming budget due to declining oil revenues.

The negotiations with doctors have been acrimonious.

Frustrated by the lack of progress, Health Minister Fred Horne imposed a deal on doctors last November -- a deal they said violated an earlier interim deal and one that would actually roll back their wages

 In the face of loud protests from doctors, Horne backed off from the imposed settlement, allowing talks to continue.

Last week, the Canadian Institute for Health Information reported Alberta doctors made a gross yearly income of almost $350,000 in 2010-11, compared with a national average of $307,000.

But Dr. Michael Giuffre, head of the Alberta Medical Association, has said overhead costs eat up as much as 60 per cent of that $350,000 and that the rest is taxed aggressively at a rate of 40 per cent.

Monday's town hall was one component in what has become a public relations blitz by Redford's communications team to brace Albertans for what the government is promising will be a challenging budget.

In last Thursday's TV address, Redford said falling oil prices are expected to halve the $13 billion her government was projecting to take in during 2013-14 from oil and gas.

She followed that up with interviews for TV, radio, print and Web reporters over the weekend, reinforcing the message that the budget will be a "once-in-a generation" chance to remake how the government spends, saves, and invests in new technologies and reduce dependence on roller-coaster energy royalties.

Redford reiterated that point in Monday's town hall. She recounted a trip to Lethbridge last year, sitting having a coffee and watching a long, winding train go by filled with "car after car" loaded with windmill blades bound for B.C.

"It just spoke to me about the fact that there is excellent research being done at our universities and our colleges, with people that are incredibly qualified and passionate about diversification -- and we're not making the most of it," she said.

"We're doing a pretty good job, but we're not actually seizing the opportunity."

The province is expected to come in with a $3-billion deficit on record spending of $41-billion in the current 2012-13 budget. That red ink is expected to be erased by the rainy day savings Sustainability Fund, thereby avoiding long-term debt

The communications campaign is emphasizing social media. Redford has granted one-on-one interviews with Web bloggers, and earlier Monday two senior ministers outlined the budget problems via short videos posted to YouTube.

In one video, Finance Minister Doug Horner reiterates the message that austerity is the word for the coming year.

"We're going to have to be very aggressive and rein in our spending," Horner says on the video.

"We're going to have to make some very difficult choices. We're going to have to make choices on programs that have been around for some period of time."

In the second video, Energy Minister Ken Hughes outlines how growing oil production in the United States, Alberta's sole customer, is driving down the price Alberta can demand for its oilsands product.

Hughes reiterates that the long-term goal is getting oil to ocean ports to sell abroad.

"We have to become connected to the rest of the world to get world price," says Hughes.

Leaders of all three opposition parties say Redford's PR blitz is an attempt to deflect attention away from her own incompetence in managing the budget.

They say Redford's government had known for over a year that the price dip was widening between the North American benchmark for oil, the West Texas Intermediate, and the oilsands' Western Canadian Select.

They say Redford won last spring's election on the strength of unrealistic revenue projections and extravagant spending promises for health, education and social programs.

The current spot price for West Texas Intermediate is US $86 — about $30 a barrel higher than Western Canadian Select

A year ago, before the provincial election, Western Canadian was selling at around US $77 a barrel, about $20 a barrel lower than West Texas Intermediate.