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Premier Alison Redford speaks at the first annual Alberta Economic Summit held at Mount Royal College on Feb. 09, 2013, in Calgary. Ms. Redford is signalling she will not roll out an austerity-minded budget as her government confronts an unexpectedly growing deficit, instead pledging new spending aimed at making her province less dependent on oil.

Chris Bolin/The Globe and Mail

Alberta Premier Alison Redford, desperate to cut costs amid a ballooning deficit, is angering the very labour groups she coveted for support during her leadership bid and last year's election.

The province's teachers on Tuesday joined a growing number of groups expressing frustration with Ms. Redford's Progressive Conservative government, dismissing the latest contract offer by the province as a "thinly veiled threat" to roll back salaries and reduce staff.

"Teachers do not respond well to ultimatums," said Carol Henderson, president of the Alberta Teachers' Association, which represents the province's 42,000 teachers.

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She said the offer, which includes wage freezes, fails to address workloads adequately. She called it "unacceptable" and urged teachers to go back to the bargaining table with Alberta's 62 school boards to find labour peace at the local, rather than provincial, level.

The Tory government is scrutinizing teachers, doctors and civil servants as it prepares to release a very tight 2013-14 budget on March 7. Facing a deficit of $3.5-billion to $4-billion this fiscal year – about four times bigger than projected – the government is looking to pinch every penny it can.

In its third-quarter update last week, the province announced a three-year salary freeze for public-sector managers starting April 1 to save about $54-million. The government also said it would cut the number of managers by 10 per cent over the same period.

Alberta Health Services, which manages health care, told its staff to brace for austerity. The University of Calgary has said enrolment at its medical school would be limited to 155 spots, down from 170, because it expects the budget to slash funding. The fast-growing province already has a shortage of physicians and is stuck in long-running labour talks with doctors.

"It seems like the Redford government is preparing to pick an unnecessary fight," said Gil McGowan, president of the Alberta Federation of Labour. "If there's any province in Canada that can afford quality public services, it's Alberta. The sky is not falling."

Mr. McGowan said Ms. Redford appears to have forgotten the new constituency – teachers, nurses and public sector workers – that propelled her to a massive majority last April, and warned of labour strife if the province doesn't sort out its revenue problem.

"If they think they can return to Klein-style cuts or rollbacks, then they've got another thing coming," he said.

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This month, Alberta Medical Association president Michael Giuffre, who represents about 10,000 physicians, issued a letter accusing Ms. Redford of making "inaccurate and misleading" public comments about the province's doctors. He highlighted a particularly touchy topic: pay.

Dr. Giuffre wrote that doctors are paid 14 per cent more than the national average – not 29 per cent, as the government suggested – and noted that salary also covers the costs of running an office in a province where space and staffing are expensive.

"The tenor of your comments vilifies Alberta's physicians and creates an environment that will poison efforts to recruit and retain doctors in the future," he wrote.

He also said funding cuts will have "serious and negative" impact on health care.

"Some medical practices in Alberta will no longer be viable; offices will close and patients will be without care," he added.

Negotiations with doctors are continuing with a facilitator after almost two years, but there's no deadline for a deal. Health Minister Fred Horne enraged doctors in November when he attempted to force a contract that included an overall raise, cost-of-living adjustments over three years, as well as a lump-sum payment of 2.5 per cent of the previous year's billings that would run through 2016. He revoked the offer to head back to the bargaining table.

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"There was an end of February deadline, and then that was extended to as soon as possible once the budget comes out," said Bart Johnson, a spokesman from Mr. Horne's office.

Last week, Alberta Education Minister Jeff Johnson offered the teachers and school boards a four-year contract with a wage freeze for the first three years, followed by a 2 per cent hike in the final year. He also dangled cash incentives, including 1 per cent of their salary in each of last two years of the deal if an agreement is reached by the end of February.

Otherwise, he warned of the "possibility of salary rollbacks" and expressed his desire to "minimize as much as possible reductions in teaching staff."

The ATA had offered a four-year deal with salary increases at 0, 0, 1 and 3 per cent, and provisions around working conditions, but Mr. Johnson rejected it. On Tuesday, he said he was disappointed the teachers turned down his latest offer, which he said would ensure labour and cost stability.

Jacquie Hansen, president of the Alberta School Boards Association, said the minister's recent offer has "some merit" as well as "some concerns," but her organization recommended boards ratify it. The previous five-year deal with the teachers and boards ended last August.

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