Mr. Jacobs: Thank you, Mr. Speaker. Our rural school board in my constituency is facing an $850,000 shortfall in the 2010-11 school year despite the announcements by the Minister of Education that school boards will receive a zero per cent increase. I don't know if zero per cent is an entirely correct figure as I have heard that school boards will in fact receive an overall budget decrease of over 4.17 per cent, 1.17 per cent in 2009-10 and approximately 3 per cent in 2010-11, due to the lack of funding for this government's negotiated settlement with the ATA. My question to the Minister of Education: when will the government provide the funding for the agreement that they negotiated?

Mr. Hancock: Well, Mr. Speaker, first of all, in this budget this year — and we'll go into it more during estimates — we have provided the same amount for school boards as last year, no increase in budgets overall, although there will be some adjustments between school boards based on the number of students they have, based on increased enrolment, based on changes in transportation, and based on changes in the class size funding.

With respect to salaries the member is absolutely correct. There are agreements in place with the ATA locals which provide for an adjustment based on average weekly earnings, and we've had an arbitrated process.

Mr. Jacobs: Thank you. Again to the Minister of Education. Because of the budget shortfall boards will have to make significant cuts to staffing in the upcoming year and will face public outcry as the current information does not indicate the deficit created by the government's lack of commitment to the agreement with the ATA. Question: why did the government fail to budget for teachers' salary increases at the more prudent figure of 5.9 per cent?

Mr. Hancock: Well, Mr. Speaker, the average weekly earnings index at the end of 2008 was 4.82 per cent. At the end of March, Stats Canada changed the way they calculated the index, and that change resulted in the 5.99 figure. That was not something we could budget for because the budget was already prepared. However, there was also a dispute with respect to interpretation as to whether the index should be what they had previously calculated or what they changed it to. We went through an arbitrated process. We didn't win that, unfortunately, so now we have an index that's certain, but we haven't budgeted the money for it.

Mr. Jacobs: Thank you, Mr. Speaker. Again to the same minister. In addition to the shortfall due to the government's salary settlement with the ATA, boards will also face increased costs for support staff, benefits, grid movement, and increases due to inflation. Without additional funding in the current budget school boards will be forced to either make significant program and staff cuts or submit deficit budgets. Question to the minister: does the minister envision school boards submitting deficit budgets to maintain the current educational programs being offered to students in Alberta?

Mr. Hancock: Well, the good news, Mr. Speaker, is that school boards across this province are in great financial shape. There are close to $360 million in operating reserves. Yes, those monies have been saved for specific purposes, but they're in good shape to manage through this year. I've asked school boards to bear with us. We now have the arbitration in place, so we know the index that we're dealing with. I will have to work with the ATA and the Alberta School Boards Association school boards with respect to the salary issue over a longer term process so that we can make them whole over a longer term if we can't in the short term. In the meantime they have the resources in their operating reserves.