Sunshine Lists in Review

This post is adapted from a presentation the Parkland Institute director made to the Standing Committee on Families and Communities reviewing the Public Sector Compensation Transparency Act.

It has been almost a decade since the Notley NDP government, responding to public outcry over excessive compensation for public sector senior executives, passed the Public Sector Compensation Transparency Act (PSCTA). The PSCTA created the now-famous “sunshine lists,” publicly disclosing the compensation paid to anyone in the public sector whose earnings surpassed a certain threshold.

The act was introduced after a series of revelations that Alberta Health Services and other government agencies were offering bloated salaries, awarding gold-plated severances, and providing inappropriate benefits such as golf club memberships to select senior executives. One AHS vice-president walked away in 2012 with over $730,000 in severance after being in the position for only 18 months. The PSCTA was clearly needed.

The Notley government also introduced the Reform of Agencies, Boards and Commissions Compensation Regulation (RABCCR) to curb excessive compensation and create standard remuneration practices for senior government officials. The UCP repealed this regulation last fall, and the legislature is now reviewing the PSCTA.

The PSCTA was introduced with the public interest in mind. It worked from the adage that “sunshine is the best disinfectant,” hoping that public disclosure would curb tendencies toward financial excess by senior executives. Whether it has worked as intended is an open question. What is clear is that it is something of a blunt tool.

Disclosure displays the individual’s name, position and classification, and total compensation, including severance and non-cash benefits. The only criterion for inclusion on the sunshine list is whether the person passes the financial threshold. Everyone employed by a provincial public sector entity earning over the threshold has their name and compensation disclosed. For reference, in 2023 that financial threshold sat at just over $125,000 for the core public service, although it differed for some agencies and institutions.

 

A crucial distinction

Here lies the PSCTA problem: it does not distinguish between the vice-president of AHS and a registered nurse working overtime. While it is rare for a nurse to earn enough to make the sunshine list, it does happen. A review of the 2022 AHS disclosure list found that 2,316 people earned more than $141,000 (the AHS threshold that year). On the list are 884 registered nurses, out of approximately 35,000 nurses working in Alberta. There were also 112 paramedics.

The question is, what is the public interest in knowing the names and salaries of those 884 nurses? All it really tells us is those nurses worked a hell of a lot of overtime in 2022. In contrast, learning that former AHS CEO Verna Yiu earned $661,377 in 2021 and received a $600,000 severance when Danielle Smith fired her in 2022 tells us a lot about the culture at AHS and the priorities of this government.

As written, the act fails to recognize that senior executives have a great latitude in negotiating their contracts, while a registered nurse — and most public sector workers — have their wages set through a collective agreement. A nurse working in a local hospital cannot negotiate a nice severance package or a year-end bonus for themselves. All of that is set by the terms of their collective agreements. This is a significant difference.

Even though the intent of PSCTA is to shine light on secret deals by senior executives, somehow it also scoops up hundreds of hard-working public-sector workers, breaching their privacy for little gain to the public interest. If the legislature is considering amendments to the PSCTA, here are a few simple recommendations.

First, introduce a preamble to the beginning of the act clearly articulating that the purpose and intent of the act is to ensure appropriate transparency to Albertans of the remuneration of the public sector’s senior leaders while respecting the privacy of public sector workers in general. It is important to clarify that the purpose of the legislation is not to reveal the wages of every public sector employee, but instead to focus accountability on those individuals who are in senior leadership positions and who are responsible for making decisions that affect millions of Albertans.

Currently, the intent of the legislation is not made clear, and even though the act is not even 10 years old yet, many may have forgotten the series of events that led to its enactment. A preamble would make that purpose clear.

Second, to address the main concern, the scope of who falls under public disclosure rules should be narrowed. Disclosure should only apply to employees whose remuneration is determined by an individual employment contract. Employees whose compensation is determined by a collective agreement should be exempt from disclosure. The financial threshold should be maintained to prevent ordinary out-of-scope workers, such as human resources and finance personnel, from accidentally being included.

This act was a measure to address concerns about secret deals with high-level officials providing gold-plated severances, inappropriate perks, and the like. This amendment would have the provisions of the act more closely align with its original intent by ensuring only those employees who have latitude in negotiating their compensation are covered.

Members of the public can already learn what unionized workers earn, as their collective agreements are public documents filed at the Alberta Labour Relations Board. Indeed, it is easier to find the hourly wage of a personal care attendant than it is to determine how much AHS is paying private, for-profit surgical centres.

Third, in one area the PSCTA has too limited ambitions. The act as written has missed an opportunity to use public disclosure to further our understanding about pay equity in the public service. Many Albertans might be interested, for example, to see if female senior officials are paid less than their male counterparts. The information currently disclosed is insufficient to perform a pay equity analysis. As the sunshine list only covers the highest income earners, it is an imperfect tool for such an analysis, but it could be a starting place. Care will need to be taken in such amendments to not unnecessarily violate the privacy of these individuals. But I believe, if well crafted, we could learn more about pay equity in Alberta’s civil service.

Finally, we need to bring back the RABCCR, for it doesn’t just shine light on the problem — it takes steps to fix it by preventing sweetheart deals in the first place. That is how the public interest is best served.

 

Note: images related to this post were AI-generated.