The Canadian Taxpayers Federation (CTF) has been the leading public policy advocacy organization in the country on the issue of MP (or MLA, MPP, etc.) pay and pension reform for the last decade.

Last week, the CTF released proposals for reform of MP pay packages. Later this month, the Lumley Commission (which is studying the issue of MP pay and pensions) is expected to report to the House of Commons.

Let's review some of the facts that envelop MP compensation.

The fully taxable equivalent of an MPs salary is currently in excess of $110,000.

This places MPs amongst the top 2.1% of all income earners in Canada.

The MP pension plan is the 2nd most generous public service pension plan in the country.

According to figures derived from the Public Accounts (1999-2000), for each dollar an MP contributes, Canadian taxpayers contribute $4.32.

The MP Pension plan accrual rate is 4%, twice the legal limit under the Income Tax Act and after 6 years of service, the pension is fully vested and indexed for inflation.

MPs can collect their pensions a full ten years earlier than Canadians can collect CPP.

The Lumley Commission is the seventh review commission to study and address the issue of MP compensation reform since 1979. Most of the ambitious and fundamental recommendations of the six previous commissions have been ignored.

So if the work of six previous commissions has basically been ignored, what hope is there for this commission To start, MPs have never been held in lower esteem by citizens in our history they are now.

Moreover, MPs need to accrue political capital with taxpayers if they wish to have the moral authority to deal with the contentious issues of health care reform, national debt reduction and the ticking time bomb of aboriginal policy.

Finally, with the government slated to bring forward a package of parliamentary reforms this fall, it is self-evident that pay reform should be a part of this package. The CTF recommends that the principles of simplicity, transparency, accountability, and fairness govern the commission's work. Therefore, the CTF recommends the following changes to the structure of MP compensation:

Abolition of tax-free and travel status expenses for MPs and adjusting their base salaries upwards to account for full exposure to income taxes;

Instituting a wage indexation factor for MP salaries based on the annual national average of private and public sector wage settlements;

Implementing all changes after the next election to remove the conflict of interest in having MPs vote on their own salary increases;

Winding up the gold-plated MP pension plan and replacing it with a matching dollar-for-dollar group RRSP scheme;

Limiting the circumstances in which voluntarily retiring MPs can collect severance; and

Limiting the involvement of former politicians in future compensation reviews.

We'll soon see if the Lumley commission and MPs have the courage to address this issue and put it to bed forever.