MPs, ministers to get a lower salary increase in economic crisis: budget

MPs, Senators, Cabinet ministers, and civil servants will all get a smaller salary increase this year and for the next three years, under Finance Minister Jim Flaherty's recession-fighting budget released last week in Ottawa. The government also announced it will freeze departmental spending on travel, conferences, and hospitality at 2008-2009 levels for the next three years, and departments "will be encouraged to explore less costly options, such as teleconferencing," according to the budget document. "Business class travel will no longer be allowed on any flight that is less than two hours for Cabinet ministers, their staff, and senior public servants," the government said. Government House Leader Jay Hill (Prince George-Peace River, B.C.) said the freeze on the MPs' salary increases is the government "leading by example." Senators, Cabinet Ministers, and civil servants from 3.1 per cent to 1.5 for the next three years. "If we, as Members of Parliament and ministers, are expecting federal public servants, including the RCMP, to adhere to 1.5 per cent annually for the next three years, we should subject ourselves to the same restriction or roll back or whatever you want to call it," said Mr. Hill, who said he has received positive feedback from his own caucus on this proposal and doesn't expect it to be a contentious issue. According to the current formula, MPs would have received a $4,817 pay increase on April 1, bringing their salaries from $155,400 to $160,217. The 37 Cabinet ministers and ministers of state would have received a $7,123 pay hike, bringing their salaries from $229,800 to $236,923. And the Prime Minister would have seen his salary increase by $9,634, raising it from $310,800 to $320, 434. With the reduction in the pay increase to 1.5 per cent, however, MPs will get a $2,331 raise on April 1, Cabinet ministers will get $3,447, and the Prime Minister's salary will go up by $4,662. Excluding the many travel and living expense perks that MPs receive, and the extra money paid for positions such as the Speaker of the House, and the Leader of the Opposition, the measure will save government at least an estimated $812,208 in 2009. Liberal MP Scott Brison (Kings-Hants, N.S.), chair of his party's committee on economic strategy, said he thinks MPs should do their part during these rough economic times. "If the government wanted to , I don't actually have a problem with that, Canadians are losing their jobs and I for one don't have a problem with us doing our part to demonstrate good faith with Canadians," said Mr. Brison. NDP Deputy House Leader Joe Comartin (Windsor-Tecumseh, Ont.), however, questioned the significance of the move, considering that MPs, who fall under the highest income tax bracket, will make up for the loss with tax breaks they will also receive from the recalibration of income tax thresholds contained in the budget. "If you actually do the calculations, you realize that you make just about as much money in the tax break that we get, given our incomes are at the level that they are, as the freeze that they gave us. It's the height of hypocrisy on the part of this government," said Mr. Comartin. "If the provinces follow suit it will be even bigger tax savings for us. When they raise the thresholds, those of us in high income brackets benefit from it much more than the people in the lower and middle income brackets." Since 2005, MPs salary increases have been tied to the index of the average percentage increase in base-rate wages for the calendar year, resulting from major settlements negotiated with bargaining units of 500 or more employees in the private sector in Canada, as published by the Department of Human Resources and Skills Development within three months after the end of each calendar year. Before that, increases in MPs' salaries were linked to senior judges, however this law was repealed under former Liberal prime minister Paul Martin. The issue of MPs' salaries has been in and out of the news for decades and has gotten quite contentious at times. MPs were subjected to a pay freeze in 1991, which in 1994 extended until 1997 by the Liberal government of former prime minister Jean Chrétien. MPs at that time earned $64,400 a year, however they were given the benefit of a tax-free expense allowance of at least $21,300 annually. In 2001 Chrétien-era minister Don Boudria convened a commission to study the issue, which eventually led to a 42 per cent pay increase for the prime minister, and a 20 per cent increase for MPs and the elimination of the tax-free allowance. Mr. Chrétien's salary went from $184,600 to $262,988, and the pay for MPs went from $109,500 to $131,400. Faced with criticism from opposition MPs, Mr. Chrétien suggested that those who voted against the pay increase shouldn't receive it. Kevin Gaudet from the Canadian Taxpayers Federation said he welcomes the changes but "they haven't gone as far as they reasonably could have or should have." "We do like to see politicians tightening their belts and that's you know in that respect it's a good move and leadership by example is a good thing. Having said that though, 1.5 per cent a year for three years is more than an awful lot of Canadians will be getting so an awful lot of people would have good reason to argue that it should just be frozen altogether, I mean, at $155,000 for a base pay, plus all the incentives they get, they are not too hard-done by to begin with," said Mr. Gaudet. "This Conservative government could start by in fact reducing the size of their Cabinet and the amount of money that is spent on ... I think if they are really serious there are lots of things that can be done, look at the whole package and I think that's what we have to do, look at every aspect of government and make sure that everything is being done," said NDP MP Judy Wasylycia-Leis (Winnipeg North, Man.). Ms. Wasylycia-Leis said that the issue hasn't been discussed in caucus so she couldn't speak for the NDP's position on it. "I think that it's all great to talk about what each one of us can do personally, but if we don't use the tool of government in a way that creates the greatest benefit for Canadians it really is irresponsible so you have to do both." Liberal MP Bob Rae (Toronto Centre, Ont.) said most Canadians are scaling back on expenses, and that he and his colleagues in the Liberal caucus are prepared to do the same. "I think MPs from all parties recognize that as the economy heads into a serious recession and Canadians are having to tighten their belts, we have to do the same thing, I don't think there'll be any objection from our side to that," Mr. Rae said. news@hilltimes.com The Hill Times

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MPs, ministers to get a lower salary increase in economic crisis: budget

NDP calls it 'height of hypocrisy' since MPs fall under highest income tax bracket.

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