MLA Pay Hike a Smokescreen for Gold-Plated Pensions
Author:
Maureen Bader
2007/05/10
In 2005, B.C.'s MLAs gathered behind closed doors, voted to give themselves a 15% pay increase and re-introduce gold-plated pensions that had been abolished just nine years earlier. Public outrage forced them to shelve the plan, but they weren't ready to throw in the towel just yet. Fast forward to 2007 and Premier Campbell announces appointment of a three-person "independent commission" to review the whole pay and benefits question.
Lo and behold, two lawyers and a university professor recommend pay and benefit hikes even greater than what the politicians had. Salaries up 30%! Gold-plated pensions - you bet! And bizarre severance provisions that would pay an MLA their full salary for 15 months after leaving office were just some of the highlights.
Great news if you're a politician. Not so great if you're a taxpayer.
Why are MLA pay and benefits an issue in the first place
In 1996, a citizens' panel was appointed to look at the issue in the wake of public outrage over gold-plated pensions that had taxpayers coughing up $6.50 for every $1 contributed by an MLA. Moreover, fully one-third of an MLA's salary was exempt from federal and provincial income taxes at the time. Then opposition leader Gordon Campbell crowed time and time again that pension benefits were too extravagant!
The panel, made up of average citizens, came back with sensible recommendations that were commendably implemented by the Harcourt government and make up the current compensation package which today provides a fully-taxable base salary for MLAs of $76,100 and a taxpayer-funded RRSP contribution of $6,849.
Is that unreasonable It puts BC MLAs in the top 7% of income earners. And the taxpayer-funded contribution to a RRSP for MLAs is greater than what is available for most in the private sector.
Nevertheless, the three-member commission's report portrays MLAs as characters in a Charles Dickens novel: underpaid, downtrodden and unappreciated.
The Commission says MLAs should be bumped up to the top 3% of income earners taking home a cool base salary of $98,000. Of course most MLAs will earn more than that with 'top-ups' for 'extra duties'. The pension plan is nearly double that available to other public employees and is one-and-half-times greater than the limit to register a pension under the Income Tax Act of Canada. Wouldn't it be great if we could all write our own set of rules.
How generous Should this current crop of 79 MLAs last through to the 2013 election they would be eligible for a pension bonanza of $63-million to age 80 with taxpayers having contributed $4 for every $1 contributed by each MLA. 26 MLAs would be eligible for over $1-million in benefits while the premier would top out at $2.2-million.
It should be noted that the NDP Opposition has commendably said they will not accept these new benefits. Should they keep their word the pension trough would drop by $20-million. Moreover, one of the three commission members has come out publicly and said she finds the pension too rich and even suggested the report was changed when she was out of the country. The NDP Opposition should be demanding this 'tainted' report be shelved; yet their silence suggests they may yet themselves take the benefits and run.
At a time when most governments in Canada are seeking to clean up the culture of political entitlement; British Columbia is poised to entrench it further. It's both shameful and an embarrassment. A 30% raise is outrageous; but re-introduction of gold-plated pensions that have fallen like dominos across the country borders on contempt for taxpayers.
Whatever is done, legislation must have an opt-out provision for individual MLAs who choose not to participate and no changes should take effect until after the next election. That way, politicians can justify the increases to the people who pay for them.