Fort McMurray's municipality announced Tuesday it is shedding 168 positions, saying it can no longer shelter its employees from the effects of last spring's wildfire and Alberta's slumping economy.

"Like industry, as a government we need to do our due diligence," said Wood Buffalo interim chief administrative officer Annette Antoniak. "These are not easy times and easy decisions."

Antoniak, Mayor Melissa Blake and the municipality's human resources director broke the news before lunch. Blake, usually unflinching in front of the media, sighed at times during the presentation.

The municipality said the job cuts include managers and union staff as well as 46 vacant positions. The move is expected to save about $24.2 million a year, or $121 million over five years.

The Regional Municipality of Wood Buffalo represents Fort McMurray and several other communities in northern Alberta.

About 100 employees will receive severance pay or a layoff notice. The municipality expects to pay anywhere between $2.3 million and $3.4 million in severance.

Antoniak and Blake blamed the cuts on a number of factors. The municipality is receiving less revenue from oilsands producers that have been hit hard by low oil prices. The Fort McMurray wildfire has also increased the municipality's expenses.

(L to R) Wood Buffalo interim chief administrative officer Annette Antoniak and Mayor Melissa Blake broke the news before lunch at city hall, Tuesday. Blake, usually unflinching before the media, sighed at times during the presentation. (David Thurton/ CBC)

May's wildfire forced more than 80,000 people from the region and destroyed 2,400 homes and other buildings. The Insurance Bureau of Canada has called the wildfire the costliest insured natural disaster in Canadian history and estimates insured property damage at almost $3.6 billion.

"Changes like this in an organization are never easy," Blake said Tuesday in a news release.

"I want to thank all those affected employees for their contributions and time of service to the community."

The municipality said the cuts come as it braces for potential changes to Alberta municipal tax laws that could deepen its financial woes.

The municipality said potential impacts of Bill 21, the Modernized Municipal Government Act, will affect its ability to assess and set rates for rural non-residential taxes. Future regulations could require the municipality to reduce rural non-residential tax rates, it said.

Bill 21 proposes capping the ration between the highest and lowest tax rate at 5 to 1, whereas the current ratio — rural non-residential to rural residential — is 18 to 1. The municipality is concerned the new bill will drastically reduce its revenues.

But Shannon Greer, press secretary to Municipal Affairs Minister Shaye Anderson, said the bill, which was passed by the legislature last year, doesn't require the municipality to become immediately compliant with the new 5 to 1 ratio.

"Therefore, it is inaccurate to suggest that these layoffs are a result of Bill 21," Greer said in an email.

She said a steering group in Wood Buffalo is studying how and if a transition to comply with the new tax rate ratio "could be done sustainably and responsibly." The steering group will report back to the government this spring.

'Never easy'

The municipality said most employees were notified Monday about the cuts. The jobs of non-unionized employees ended immediately. Canadian Union of Public Employees (CUPE) employees will remain in limbo for about a month as the collective agreement determines which senior employees bump junior ones.

The municipality said all departments were affected by the layoffs except protective services.

The finance department absorbed the largest share of the job losses. The municipality also said the cuts were "one-time" and no more were expected.

"This kind of work is never easy," Antoniak said. "We are working with CUPE to ensure that the layoff process is implemented as expediently as possible to minimize ongoing impacts to individuals and to the organization as a whole."

Antoniak said staffing accounts for about 52 per cent of the municipality's operating budget. The municipality will examine other spending to see where more savings can be made.

The cuts reduce the total number of municipal employees from 1,652 employees to about 1,480.

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