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Golden handshake deal puts MLAs in the money

Author: John Carpay 2001/08/14
Premier Klein was front-and-center in abolishing the lucrative MLA pension plan just before the 1993 provincial election. His bold leadership on this issue helped secure victory over Laurence Decore, the reform-minded and fiscally conservative provincial Liberal leader who toured the province with an electronic "debt-clock". Abolishing the MLA pension plan was not done quietly by an all-party committee while Albertans were away on holidays.

Eight years later, Premier Klein is trying to abdicate leadership to an all-party committee of MLAs which held an almost secret meeting on a hot Tuesday afternoon just after the August long weekend. At a time when most Albertans were going on holidays or coming back from holidays, and media attention was centered on the World's Athletics Championships, MLAs from three parties cheerfully passed a unanimous motion awarding themselves what amounts to a 10% pay increase. They're calling it a $6,750 "RRSP allowance," set at half of the maximum allowable annual RRSP contribution. But this $6,750 is simply added to the MLA's $41,000 salary and $20,500 tax-free allowance, and comes on top of automatic annual increases for inflation.

The PC and Liberal MLAs on the committee also voted to increase MLA severance pay, New Democrat Brian Mason dissenting. MLA severance pay had been a generous two months' salary for every year of service, to a maximum of 24 months' pay, calculated on the MLA's salary alone. But the committee resolution would see this increase to three months' pay for every year of service since 1989, calculated on total compensation including pay received by the MLA as Premier, Opposition Leader, Speaker, Cabinet Ministers, and other positions.

Upon defeat or retirement in 2005, Premier Klein is in line for $530,000, Liberal Leader Ken Nicol for $356,000, ND Leader Raj Pannu for $137,000, and Finance Minister Pat Nelson for $475,000. Speaker Ken Kowalski stands to gain $475,000, plus additional severance pay and an MLA pension for service prior to 1989.

The government would have Alberta taxpayers believe this is a done deal, not worth fighting over: "Continue enjoying your holidays, and don't worry your little heads over complex and irrelevant details" seems to be the prevailing attitude. But in fact, the Legislature has merely delegated its authority over MLA compensation to an all-party committee, and can reverse or reject whatever the committee decides. Further, there is no reason why the committee can't meet again, on another hot summer day, and undo the damage it did last week.

How many members of the taxpaying public, upon quitting or losing their jobs, receive three months' salary for every year of service? And how many Albertans earn less than $70,000 per year and still have to provide for their own pensions?

Alberta should lead the way on setting MLA compensation: an independent body should study the issue, receive public input, and make unbiased recommendations; MLAs should vote on the recommendations in the Legislature; and changes should not go into effect until after the next provincial election. But Alberta lacks all three of these basic steps. The current process for determining MLA compensation is unprincipled, sneaky, unaccountable, and a blatant conflict of interest.

If Premier Klein thinks a 10% pay increase and gold-plated severance packages are fair and justified, why didn't he put these proposals before the taxpaying public in the election just five months ago?

Will Premier Klein now show leadership on this issue, as he did in 1993? Or will the trust he established in 1993 be destroyed through his silent consent to the quiet workings of an all-party committee?

It's up to Albertans in general, and Calgarians in particular, to phone their MLA and the Premier's Office to voice their concerns. It only takes a few minutes. It's what made the difference in 1993.

These outrageous and obscene increases are only a "done deal" if Ralph Klein and Alberta taxpayers allow it to be so.

Proposed severance packages for Calgary and area MLAs

If Ralph Klein goes along with the decision of the all-party Member Services Committee, MLAs who retire or are defeated in 2005 would receive severance packages as per the following list. If Alberta taxpayers do not call their MLAs to object, MLAs will receive three months' pay for every year of service after March of 1989, based on the average of the three highest-paid years.

Ralph Klein $529,680 Premier
Pat Nelson $474,816 Finance
Don Tannas $374,064 Deputy Speaker
Gary Mar $356,112 Health and Wellness
Murray Smith $356,112 Energy
Heather Forsyth $356,112 Solicitor General
Ron Stevens $237,408 Gaming
Greg Melchin $237,408 Revenue
Hung Pham $242,784 Deputy Chair, Public Affairs Committee
Denis Herard $242,784 Deputy Chair, Law and Regulation Committee
Richard Magnus $242,784 Deputy Chair, Alberta Heritage Savings Trust Fund Com.
Shiraz Shariff $242,784 Deputy Chair, Public Accounts Committee
Carol Haley $230,688 Chief Government Whip
Moe Amery $204,984
Yvonne Fritz $204,984
Mark Hlady $204,984
Marlene Graham $187,032 Chair, Private Bills Committee
Janis Tarchuk $187,032 Chair, Public Affairs Committee
Karen Kryczka $161,856 Deputy Chair, Private Bills Committee
Wayne Cao $136,656
Cindy Ady $68,328
Harvey Cenaiko $68,328
Alana DeLong $68,328
Jon Lord $68,328
Total severance pay for all 83 MLAs: $17,693,087

If the next provincial election were held on March 20, 2005, and if all 83 MLAs retired or were defeated, Alberta taxpayers would be on the hook for $17,693,087 in severance pay for these 83 individuals - an average of $213,170 per MLA.

These numbers are based on the MLA's total compensation, including

- $41,052 salary,
- $20,526 tax-free allowance,
- the proposed new "RRSP allowance" of $6,750,
- the additional indemnity for Premier ($64,092), Speaker ($50,376), Cabinet Minister ($50,376), Chief Government Whip ($8,568), Assistant Government Whip ($6,420), Deputy Speaker ($25,188), Leader of the Official Opposition ($50,376), Official Opposition House Leader ($10,716), Chief Opposition Whip ($6,420), Assistant Opposition Whip ($5,352), Committee Chair ($25,188), and Committee Deputy Chair ($12,600).

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