Three senior Harper Ministers – Jim Flaherty, John Baird and Tony Clement – must be grinning widely today. The troika were elected exactly six years ago and now they can retire worry-free, having finally qualified for their gold-plated MP pensions.
They are each entitled to $68,000 a year if they hang on until 2015 – and $96,000 a year if they remain until 2019. It keeps increasing from there.
The three former provincial ministers left the Ontario legislature without a pension after the government they served in, the Mike Harris Conservative government, abolished pensions for MPPs.
And so their salaries and compensation have increased substantially from their Queen’s Park days. As federal ministers they earn $233,247 a year; as Ontario cabinet ministers they would be earning $165,851 a year.
They can begin collecting their MP pensions at age 55. Finance Minister Flaherty is 62, Treasury Board President Clement will celebrate his 51st birthday Friday and Foreign Affairs Minister Baird is 42.
Coincidentally, Mr. Clement is now eyeing the MP pension as part of his strategic review. As the Treasury Board President he needs to find $4-billion in annual savings from government. He has not said for sure if the MP pensions will be reformed.
“It's ironic that they are all qualifying for their pensions today at the same time as they're probably preparing to take an axe to the MP pension plan,” Canadian Taxpayers Federation’s Gregory Thomas told The Globe. “It's also ironic that they led the way in scrapping MPP pensions in Ontario under Mike Harris. If they succeed in Ottawa they will have eliminated not just one, but two pensions for themselves.”
Despite what Mr. Thomas says, however, it’s not entirely clear whether any action Mr. Clement takes – or that of the government – on reforming pensions will be retroactive. So, he and his colleagues may have just qualified in the nick of time.
The Canadian Taxpayers Federation, meanwhile, recently put together a comprehensive look at MP pensions. It was released last week in advance of the so-called “class of 2006” being eligible on January 23. Indeed, six years ago Monday, Stephen Harper and his Conservatives beat the Paul Martin Liberal minority government, forming for the first time in 13 years a Conservative government.
The Flaherty-Clement-Baird trio are among 39 MPs who qualify for their pensions Monday, according to the CTF.
“The ‘Class of 2006’ will be eligible for a collective $1,927,000 in annual pensions in 2015, adding up to $29.1 million by age 80 in addition to $1.8 million in severance payments,” says the CTF report.
The report notes that for every $1 that MPs contribute to their pension plan, Canadian taxpayers contribute $23. The MP pension is nothing like pension in the real world.
“It would take a regular Canadian nearly 30 years to save the equivalent nest egg necessary to produce the eventual pension payouts a backbench MP is eligible for after just six years of service, and who makes the same pension contributions,” says the CTF report.
Interestingly, Mr. Thomas notes that those MPs “with the biggest entitlements” are the former Reform and Alliance MPs, who made scrapping MP pensions a centrepiece of their campaigns.
“Many have already left Ottawa with multi-million dollar pension annuities – some are working as lobbyists,” notes Mr. Thomas. “If it were the public service, the government would arrange a buyout, but try taking that idea home to the voters on the weekend. When Klein scrapped pensions in Alberta, there were some long serving MLAs in his own party more or less left out in the cold.”
The case for – and against – MP pensions
Martha Hall Findlay, a former Liberal MP, does not qualify for a pension after being defeated last May with less than six years service. Yet, she went on Tom Clark’s The West Block Sunday to defend the pension scheme.
“You know, when you go into an operating room, you want a doctor who’s pretty good at what he or she does,” argued Ms. Hall Findlay. “We want people in this country, when they’re making decisions about who’s going to go to war, when they’re making decisions about funding for the health-care system, when they’re making decisions about the tax you actually end up paying, you want people who are good ...”
She noted the challenges of the job, including the fact that there is no job security – as she discovered.
But Ian Lee, with Carleton University’s Sprott School of Business, argued the pensions are simply too rich. He noted, too, that being in public service and Parliament is not simply about monetary compensation.
“There is intellectual compensation; there’s policy, you’re making a difference. Most people don’t pass laws; 306 people [there are actually 308 MPs]are controlling the lives of 34 million Canadians and that’s an enormous kick. That’s an enormous motivation,” he argued.