For a Few Dollars More...
Author:
Walter Robinson
2001/05/29
Summer's coming (if only this rain would go away), the House of Commons is winding down so it must be time to top up paycheques for our MPs again. Think this is a touch cynical? Sorry, this the third June (work with me it's coming this Friday) in the last four years where MPs pay and pensions are on the public policy radar screen again.
And taxpayers can be forgiven for their visions of MPs sitting in the commons anxiously looking at their watches in anticipation of vote on MP pay before they jet off to their constituencies for the summer bar-be-que circuit. But it looks as though this will happen again in the next two weeks.
Yesterday the much anticipated report of the Lumley Commission on MP compensation was released, which is ably reported by Sun Media's team of journalists in the news section of today's paper. In it, Mr. Lumley, a Trudeau-era cabinet minister - and to be fair - a very decent man made some very sensible recommendations about changing the structure of compensation of parliamentarians. Indeed, his principles of simplicity, transparency and accountability in the pay regime are ones that the CTF has advocated for over a decade.
However, the proposals to hike MP pay by 20% and the Prime Minister's pay package by 42% are too excessive. The commission defends these proposed hikes as catch-up for wage freezes during the 1990s. Indeed MPs experienced a seven-year wage and only three years of inflationary increases on their paycheques in the last decade. But so did other public sector employees and many taxpayers in the private sector endured much worse including wage rollbacks and layoffs. So reform of the pay regime should not be about addressing past issues but moving forward instead. A more appropriate wage increase should be in the realm of four or five percent.
On a more positive note, we agree with the commissions recommendations on an automatic index for MP pay adjustments, similar to a composite wage average but we need to see the full details on this to ensure that MPs don't lock themselves into double-digit annual salary escalations. And the proposals to remove the tax-free component of MPs salaries and make their salaries fully taxable are long overdue.
With respect to the contentious issue of MP pensions, we are disappointed that the Commission has disregarded our suggestion for fundamental MP pension reform through implementation of a matching dollar-for-dollar group RRSP scheme. However the proposal to reduce the 4% accrual rate to 2.5% for pension calculations is a tacit acknowledgment of the odious pension regime. But the devil is in the details for MP pensions and the commission was short on actual specifics in this area. The jury is still out whether these changes will fundamentally change the gold-plated pension plan or not. But we will try not to let our pursuit of perfection be the enemy of the greater good on this file.
This is also fiscally ironic because in the long run the math is very clear, the majority of MPs would do better under defined-contribution scheme as we have proposed as compared to the current "gold-plated" defined benefit regime. It would be the classic win-win situation where MPs would do better at less cost to Canadian taxpayers.
But let's be very clear. These recommendations are not about attracting better quality people to public life. The "if you pay peanuts you get monkeys" school of thought does not apply here. Give me strength. There is not a study on the face of the planet that shows more pay equals better politicians. And do you really think MPs sit around and say "hey we should pay more to attract better people so they can take our jobs and collect our pensions?" Ah, no!
Even if we did pay $150K or $200K or more, the things that deter CEOs and other community leaders and professionals from seeking elected office still remain. Excessive party discipline, no real influence on public policy, incessant media scrutiny, and the fact that MPs are basically seen for the utility as voting machines and not much else still remain. .
Hiking pay packages won't attract better people to public life, fundamental reform of the role of an MP and of parliament are more important objectives that should be pursued to attract others to public life.
So where does the issue go from here? Well the torch has now been passed from the Lumley commission to our MPs. Unfortunately, past experience - six commissions over 20 years - has shown us that MPs have a proclivity for cherry picking some recommendations from these reports while leaving other common sense and integral components on the table. The result, taxpayers have paid the price and public cynicism toward parliament and MPs has only been exacerbated.
The CTF will encourage MPs to adopt Mr. Lumley's recommendations on ending tax-free allowances, simplifying the layering of allowances immediately but changes to base salaries and pension adjustments should take effect only after the next election to remove the inherent conflict of interest of current MPs voting on their own pay packages. In the next week, we'll see where our MPs stand on these issues.