The following message was distributed to the education sector earlier this afternoon.

For the past eighteen months, the education sector has engaged in many conversations about the future of learning in our province. The five year agreement between the Government of Alberta and the Alberta Teacher's Association, subsequently effected in part by collective agreements between school boards and ATA locals, created a clear time frame where work like Inspiring Education could happen without the needless distractions of bargaining and "labour relations." The Government of Alberta has strongly maintained its commitment to the agreement and our consequent obligations. The funding of teachers' Alberta Average Weekly Earnings increases has clearly been part of that commitment.

Alberta has been able to manage the impact of the global financial crisis without having to make deep cuts. We are in this fortunate position because government had paid off its debt and accumulated $17 billion in the Sustainability Fund. To see our province through this difficult period, the government has adopted a balanced approach to financial management that includes closely managing spending, using our savings to protect key public programs and services, and continuing to building infrastructure to support jobs and the economy.

However, our revenue picture remains highly uncertain, with natural gas prices low, and oil prices, financial markets, and the Canadian dollar fluctuating on a daily basis. We will remain focused on our plan to be prudent, balanced and cautious, and balance the provincial budget by 2012.

Within this context, my government colleagues and I will meet our commitments. In light of the better than expected year end results for the past fiscal year, government has determined that it is prudent to provide funding for the 2.92 per cent increase in this year, rather than over a longer term period. Today, therefore, I am pleased to inform you that government will fulfill its commitment to school boards and teachers by providing funding for a 2.92 per cent increase in teachers' salaries effective September 1, 2010.

The increase in funding will be applied in the form of a 2.92 per cent increase to the base student and class size initiative grants. I want to be absolutely clear: this money is for teacher and support staff salaries, not for any other purpose. As I have repeatedly said in recent months, we have devoted significant resources to reducing class sizes, and I have no desire to see these gains lost. While I recognize that there were adjustments in the class size funding formula, I expect that boards will sustain or improve their progress in meeting class size guidelines as a result of this funding.

In the event that a board has to or desires to reduce its teaching and classroom support staff complement, I will expect that you will first provide me with your rationale for doing so. This rationale could and would be used in my responses to parent and constituent complaints specific to the engagement of teaching and support staff in your jurisdiction. In the event that a board does not use the funds provided in the expected manner, and in fact proceeds to reduce staff levels absent an approved rationale, these funds may be deducted from future grants.

I want to again stress that the Government of Alberta, our Premier Ed Stelmach and I have at all times indicated that our commitments would be met, whether in this fiscal year or in future years. I am disappointed that some boards have indicated that they will make budget decisions which result in teaching staff reductions that are not in the evident best interests of students, despite my repeated assurances that funding would be forthcoming. I have fulfilled all of the commitments I have made to school boards about their budgets: an unprecedented collaboration with school boards in the preparation of the Education budget last fall; providing additional funding for last year's 5.99 per cent increase as soon as the arbitrator's ruling was made and the provincial budget was passed; and now providing funding for the coming school year's salary increases. This is ample grounds for trust in commitments made by the government.

Given that many school boards have decided to delay submitting their 2010/2011 school year operating budgets until November 30, this notice will provide time to adjust decisions about staff recruitment, financial allocations and other resourcing issues. For those school boards that have passed their budgets and/or have submitted their budget for the upcoming school year, it will be essential to revisit resourcing and allocation decisions. In addition to the new financial information, student enrolment numbers gathered at the end of September will have an impact on your decisions.

Many of you have asked why we did not fund this fall's salary increases in the 2010 provincial budget. I want to provide the context for this decision.

In 2009, as you are well aware, there was a dispute about the Alberta Average Weekly Earnings index adjustment due to the fact that Statistics Canada changed the way this measure was calculated. We believed it was appropriate and necessary to challenge the automatic assumption that the calculation would continue to be based on formula which is now significantly different from that to which we originally agreed. Some have tried to characterize this as the government reneging on its commitment to teachers. Nothing could be further from the truth.

This was an appropriate prudent and fiscally responsible action taken on behalf of Alberta taxpayers to ensure that the agreement met its intent: that teachers would continue to be well paid in Alberta, and their salary adjustments would mirror those of other Albertans. Clearly, the Alberta Average Weekly Earnings index calculated by Statistics Canada has not accomplished this, with pay increases of 4.53, 5.99, and 2.92 per cent during the most severe recession Alberta, Canada and the world has seen in many years. When the index produces substantial increases like this, it clearly does not reflect the reality that many Albertans have lost their jobs, others have faced salary freezes, and overall income is down. While the index was a well-established, credible third party generated adjustment criteria, it did not stand up well to the extremes of the Alberta economy.

In that light, the Government of Alberta took the position that the agreement should be interpreted in a manner that would continue the calculation of the AAWE adjustment based on the formula in place at the time the agreement was reached. Budget 2009 had, of course, already been prepared by the time the new index formula was put into effect at the end of March 2009. The 2009 budget therefore used the 2008 AAWE index calculation, which would have provided a 4.82 per cent increase. When Statistics Canada changed their AAWE index formula, there was immediate call for funding at the 5.99 per cent level. However, this was not reasonable or prudent given the need to appropriately define the actual adjustment.

Arbitration, a perfectly normal, appropriate process for resolving disputes, and one which was provided for in the agreement, was undertaken, and a decision was rendered at the end of January 2010. Budget 2010 had been prepared (though not publicly introduced in the Legislature) before the arbitration decision was received. From my perspective, it was entirely possible to expect that the arbitrator would agree with our position that changing the calculation of the index opened up the possibility of using a different calculation which more appropriately reflected (in our view) the intention of the agreement. Given the state of the Alberta economy, and given the government's stated intention of keeping public sector compensation constant in order to assist in meeting the fiscal objectives, it was prudent to budget for no increase in funding to boards.

As you are well aware, the arbitration determined that the new Statistics Canada Alberta Average Weekly Earnings index formula was the adjustment factor. When Budget 2010 was presented in the Legislature in February, I communicated directly with board chairs, superintendants and others that we would accept the arbitrator's decision and that we would meet all of our commitments, including the 2.92 per cent adjustment for September 1, 2010. I then moved as quickly as possible to ensure school boards were provided with the additional 1.17 per cent needed to meet their September 2009 salary adjustment. This was accomplished prior to the end of March, in the same week that the 2010 budget was passed.

I indicated and have continued to indicate to boards that we would work with you to ensure you were in a position to meet your obligations under your collective agreements. I said in the strongest possible language that the government's commitment to the agreement would be upheld.

However, I also indicated that I was not in a position to guarantee that funds would be available in this fiscal year. I anticipated we would need to look to a longer period to meet fulfill our funding commitments. It was for that reason I again requested in the strongest possible terms that boards budget for this year on the presumption that they would receive the funding needed to meet their obligations to teachers, even if that meant running a deficit this year and funding it from operating reserves or deficit financing. I indicated that Alberta Education would work with any board which would end up with unsupported debt as a result.

This was all clearly intended to ensure that we did not lose teachers as a result of short term fiscal issues. We know school populations are increasing, many experienced teachers are retiring, and we will need our younger teachers. I have repeatedly stressed the importance of all of us — government, school boards, and teachers — taking a long-term approach.

Now that funding questions are off the table, we can once again focus on the critical work of preparing our education system for the future. Inspiring Education has provided a platform for in depth thinking and discussion about education policy and practice which will ensure that Alberta students have the opportunities they need to meet their learning needs.

Teaching excellence and continued workforce stability are essential to improving student learning. For this reason, it is necessary to focus on the selection, pre-service education, induction, and continuous professional development of teachers. The growing positive working relationships resulting from the current five year agreement have provided many opportunities for us to continue to focus our energies on transforming education in Alberta from a world-leading system today to the world-leading system we will need tomorrow. Therefore, the Alberta School Board Association, Alberta Teachers Association and government are developing a process by which to sustain and build on the stability and focus afforded by the present agreement. I look forward to your trust, patience and support in this work.

I trust this funding will come as welcome news, and that we can now turn our fullest energies to the future of education in Alberta.