In the aftermath of announcing its inaugural budget, the Alberta Government recently introduced two omnibus bills containing sweeping changes impacting numerous pieces of legislation and the enactment of the entirely new Public Sectors Employers Act. Bill 20: Fiscal Measures and Taxation Act, 2019 and Bill 21: Ensuring Fiscal Sustainability Act, 2019 (collectively, the “Bills”) were announced on October 28, 2019.
Key changes are summarized below.
BILL 20: FISCAL MEASURES AND TAXATION ACT
If passed, Bill 20 proposes the following:
- To end the following tax credits: Education and tuition tax credits, Interactive Digital Media Tax Credit, Capital Investment Tax Credit, Community and Economic Tax Credit, Alberta Investor Tax Credit, and the Scientific Research and Experimental Development Credit.
- To roll the Alberta Child Benefit and Alberta Family Employment Tax Credit into a single tax credit.
- To replace the city charters for Edmonton and Calgary with a new Local Government Fiscal Framework Act, which would change the way municipal construction projects are funded, beginning in 2022-23. In the first year, Edmonton and Calgary would share $445 million – down from the previously promised $500 million – and other municipalities would now have access to a $405 million fund.
- To suspend indexation of tax brackets for the income tax system.
- To end the Lottery Fund and move the money into general revenue.
- To end the Access to the Future Fund, the Alberta Cancer Prevention Legacy Fund, and Environmental Protection and Enhancement Fund.
- To increase the tobacco tax rate.
- To amend the funding agreements for LRT development projects in Edmonton and Calgary. Money for LRT line development was delayed in the budget and the cities lost a promise of a future $200 million that was to come from the now-defunct carbon tax.
BILL 21: ENSURING FISCAL SUSTAINABILITY ACT
If passed, Bill 21 proposes the following:
Employment Standards Code
- The definition of “employee” will be amended to allow for the exclusion of certain classes of individuals in the Regulations.
- Unionized employees will no longer be able to make Employment Standards complaints, and must rely on the grievance process provided in their collective agreement.
Labour Relations Code
- The use of replacement workers is no longer prohibited for employers under Division 15.1 of the Code (Essential Services), and employers will be able to elect to use either designated essential services workers (plus capable and qualified persons who are neither members of the bargaining unit nor replacement workers) or replacement workers to perform essential services during a strike or lockout. This election must be made by an employer within a reasonable time after parties are required to begin negotiations for an essential services agreement, and an employer must notify the bargaining agent in writing of its election. “Replacement workers” has been defined to mean “a person, whether paid or not, who is hired by an employer, or is supplied to an employer by another person for the purpose of performing the work of an employee in the bargaining unit during a strike or lockout.” No election will be required in respect to non-essential services, and replacement workers will be fully allowed for non-essential services, even for employers under Division 15.1 of the Code. The Alberta government has commented that they believe these changes will stand up to constitutional scrutiny.
Public Service Act
- The Act will be amended to include, notwithstanding any right existing at common law, a non-union employee whose employment contract does not specify notice of termination, and is terminated without cause, is entitled to the following notice periods: (a) for less than 1 year of continuous service, 2 weeks; (b) where the employee has 1 or more years of continuous service, 4 weeks for every full year of continuous service up to a maximum of 78 weeks.
- Employees terminated without cause may be issued severance pay in lieu of a notice period subject to the Commissioner and the Deputy Attorney General’s approval. The amount of severance pay is calculated using the following formula – 1.16 × base salary (weekly) × number of weeks in lieu of notice.
- If an employee who has received severance pay becomes employed with either the Crown in right of Alberta or a public agency to which the Alberta Public Agencies Governance Act applies during the period of notice to which an employee is entitled, the employee must repay the portion of the severance pay from the day they commenced employment with the Crown or public agency to the end of the notice period.
Public Service Employee Relations Act
- Budget officers, systems analysts, and auditors, or those performing substantially similar duties, are excluded from a bargaining unit or any other unit for collective bargaining. This exclusion will operate from a date prescribed in the regulations based on the person’s employer or class of employer. It will be important to see which class of employers are prescribed in the regulations.
Public Sector Employers Act
- This entirely new proposed Act creates obligations for certain employers during collective bargaining.
- Employers that this Act applies to include post-secondary institutions, school boards, Regional Health Authorities, and other organizations such as: Alberta Gaming Liquor and Cannabis, Alberta Innovates, Alberta Pensions Services Corporation, ATB Financial, Covenant Health, Lamont Health Care Centre, Travel Alberta, and the Workers’ Compensation Board.
- Under this Act, the Minister may issue various directives that employers must follow before, during, and after engaging in collective bargaining or a related process. Directives may relate to: (a) a term of the collective agreement that an employer may propose or agree to; (b) fiscal limits that an employer must operate within when engaging in collective bargaining or a related process; and (c) specifying that an employer must provide to the Minister such data regarding compensation, employment and labour markets, as necessary for the purpose of monitoring compliance, and any other information considered necessary.
- Directives may be general or specific, but are to remain confidential. They may only be disclosed to another employer, employee of a department, or member of Executive Council if the Minister considers it necessary, and cannot be released to a third-party without the consent of the Minister.
- If there are any conflicts or inconsistencies between this Act, the Labour Relations Code, and the Public Service Employee Relations Act, this Act is intended to apply.
- The Lieutenant Governor in Council may amend the Act’s Schedule to include additional entities that the Act will apply to as long as they are public agencies covered by the Alberta Public Agencies Act, or receive funding from the Crown to provide a public service.
Post-Secondary Learning Act
- The freeze on tuition, apprenticeship instructional fees, and apprenticeship material and service fees for the next three academic years is lifted.
Other Legislative Impacts
- The indexation of benefits for Assured Income for the Severely Handicapped (AISH), Income Support, and the Senior Lodge Program will be temporarily suspended.
- Interest on provincial student loans will be increased by 1%.
- The cap on regulated electricity rates will be removed.
- The Health Minister may place conditions on new practitioner identification numbers, which may restrict the number of physicians practicing and their mobility within the province. Further, the Master Agreement between the Crown in Right of Alberta and the Alberta Medical Association may be changed, which may include the ability to terminate any agreement for physician compensation.
- The Minister may change through Regulation how municipalities pay for policing. This includes municipal districts and every town, village, and summer village with a population not greater than 5,000 being required to pay a cost for these services if required by the regulations. Metis settlements will continue to receive policing services at no direct cost to the settlement.
- Money collected by the Crown in Right of Alberta in respect to a penalty, fine, or sum of money payable under the enactment or the proceeds of a forfeiture may still be retained to offset the expenses incurred by the Crown with respect to collecting the penalty, fine, sum of money, or forfeiture. However, the Crown may also choose to use this money to fund programs that support or improve the administration of justice or government initiatives.
Article by Tim Mitchell, Rebecca Silverberg and Madyson Dietrich, McLennan Ross LLP