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Health Minister Fred Horne has fired the board of Alberta Health Services over its refusal to cancel executive bonuses.Sandor Fizli/The Globe and Mail

The Alberta government has taken the extraordinary step of firing the health superboard that makes day-to-day decisions regarding operations at the province's hospitals and clinics after board members refused, even when asked by the Health Minister, to revoke executive bonuses.

With opposition parties questioning the mandate of the politically appointed Alberta Health Services board, Alberta Health Minister Fred Horne said the provincial cabinet made the decision to yank all 10 members of the board – which included chairman Stephen Lockwood – because they refused to stand down from a budget that saw as much as $3.2-million in bonus pay awarded to 99 health-care executives.

Although the unique-in-Canada AHS board is delegated to make decisions regarding a $13.4-billion health-care budget, the government has stepped in a number of times when the health minister of the day has concluded that the board overstepped its bounds. Recent rounds of public-service cuts in the name of what the Redford government says are lower-than-expected oil revenues have already stirred protests and labour unrest. The AHS senior staff bonuses – given the cryptic name of "at-risk pay" – are an almost impossible political sell.

"At a time when we've asked our front-line providers, including doctors, teachers and support workers, to take freezes in pay, the unwillingness of the Alberta Health Services board to reconsider its decision on at-risk pay is completely out of step with the government's priorities and, more importantly, the priorities of Albertans," Mr. Horne said Wednesday.

"I informed the Alberta Health Services board chair and the members of the AHS board that I am terminating their appointments, effective immediately," Mr. Horne said, adding the situation had become "intolerable for the government."

Mr. Lockwood, who was only appointed chairman of the board last September, headed a public emergency meeting in Calgary on Tuesday at which the board decided to proceed with its plan to pay bonuses for the 2012-13 fiscal year – but cancel at-risk pay in the current fiscal year. In an interview, Mr. Lockwood said the Redford government knew that was the plan, and didn't like it, but had indicated in earlier months that it would allow the board to make the decision. He said he had to stick to his guns.

"You cannot backtrack on your decision," said the 57-year-old Calgary-area businessman. "People rely on you."

It was also a simple matter, he said, of meeting the requirements of employment contracts and maintaining the board's ability to recruit top talent – even as the process of cutting costs continues.

"The bigger issue is who's responsible and accountable for the operating decisions of AHS," Mr. Lockwood said. "The system that was set up is a good model. But it requires government to not interfere."

In 2008, then-premier Ed Stelmach disbanded nine regional health authorities to create AHS, saying it would cut administrative costs and ensure better care for patients.

Since then, the consolidated board has become a lightning rod for many of the ills of Alberta's health-care system, but it has never been given the autonomy board members have sought.

In 2010, AHS chief executive Stephen Duckett created a public spectacle that overshadowed a meeting on a crisis in emergency room care when he refused to speak to the media – all the while waving a cookie at a television camera and insisting he was too busy eating to stop walking and talk. Following censure from the health minister, the board came to an agreement that ended Dr. Duckett's tenure. But several board members resigned, citing the government's interference in the process.

On Wednesday, Mr. Horne did not confirm he will actually appoint a new board. But in the interim, health executive Janet Davidson, a former assistant deputy minister, becomes the AHS administrator. Mr. Horne said she will review the decision to award bonuses for the 2012-13 fiscal year – which have not yet been paid.

He said day-to-day health-care operations will continue uninterrupted. However, Liberal Leader Raj Sherman, a former Conservative MLA who has become the ruling party's most vehement critic on health care, called for an emergency sitting of the legislature.

No other opposition members were taking the board's side either. NDP Leader Brian Mason said decision-making should be brought back to the Health Ministry, and Wildrose Leader Danielle Smith said her party wants to return to a period of decentralized decision making. Instead of the superboard cutting administrative layers, she said, "we've seen a growth of bureaucracy, a growth in senior executives, a growth in executive salaries and compensation packages, out of control expenses – and now clearly an out-of-control board."