• Taxpayers Respond to Commission on MP Compensation
  
• General Direction Applauded but Devil remains in Salary and Pension Reform Details
  
• CTF Challenges MPs to Improve upon Lumley Recommendations revise Salary Numbers Downwards

OTTAWA: The Canadian Taxpayers Federation (CTF) today responded to the release of the recommendations on MP compensation by the Lumley Commission that reviewed the salary and pension packages provided to MPs and Senators.

Principles
"We applaud the Lumley commission for incorporating our principles of simplicity, transparency, and accountability into their recommendations for parliamentary salary and pension reform," stated CTF federal director Walter Robinson.

Pay
"However, when it comes to the last principle of fairness, the proposal for a 20% increase in an MPs base salary to $131,400 is too generous and the proposal to increase the Prime Minister's real pay by almost 42% to almost $263,000 is a non-starter."

The commission justifies these hikes to make up for wage freezes during the 1990s. But Robinson countered by noting "the 1990s were a lost decade for all Canadians. While it is true MPs experienced a seven-year wage freeze, so did other public sector employees and many taxpayers in the private sector endured much worse including wage roll backs and layoffs." Robinson added, "reform of the pay regime should not be about addressing past issues but moving forward instead."

The CTF also noted that indexing annual base pay adjustments packages to some form of "industrial wage composite" parallels a CTF recommendation made earlier this month. "But we should remember hiking pay packages won't attract better people to public life, fundamental reform of the role of an MP by ending overburdening party discipline, incessant media coverage and making the job of our legislators meaningful again."


The Pension Question
"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," added Robinson.

"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."

"This is also unfortunate because in the long run the math is very clear, the majority of MPs would do better under defined-contribution scheme as we propose as compared to the current "gold-plated" defined benefit regime," noted Robinson. "It would be the classic win-win situation where MPs would do better at less cost to Canadian taxpayers."

Next Steps
"The torch has now been passed from the Lumley commission to our MPs," said Robinson. "Past experience - seven commissions over 20 years - has shown us that MPs have a proclivity for cherry picking recommendations from these reports and taxpayers have paid the price."

The CTF will encourage MPs to adopt Mr. Lumley's recommendations on ending tax-free allowances, simplifying the layering of allowances immediately. However, changes to base salaries and increases as well as 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.

"The other issue MPs should address is the wage increases for Senators. Canadians continue to question the utility of the Senate and this recommendation should be left off the table," Robinson concluded.