Report recommends higher salaries for Alberta Premier, MLAs

EDMONTON — The Globe and Mail

PC leader Alison Redford reacts after winning the provincial election in Calgary, Alberta, April 23, 2012. (TODD KOROL/REUTERS)

An independent report is recommending an overhaul of how Alberta MLAs are paid. It would hand them the highest base salary in Canada and introduce a pension, while ending lucrative committee and retirement bonuses.

But Premier Alison Redford – who said throughout the recent election campaign she’d accept the recommendations of an impartial report – dismissed one of them minutes after receiving it, saying she wouldn’t take a hefty raise.

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The report, written by a retired judge, recommends the premier be paid like a judge – $335,000 annually within two years. Ms. Redford said she was surprised to see that.

“I couldn’t take that, I would not take that, it’s not what Albertans want and I don’t think it’s appropriate,” she said. “I think what we need to do is take a look at the whole report, and make sure we’re consistent with the spirit of the report.”

Retired justice John Major makes several recommendations, including a base salary for MLAs equivalent to $134,000, slightly more than a senator earns, and about 15 per cent higher than in Ontario, the next closest province. Cabinet ministers would earn more.

It also suggests doing away with bonus pay for legislative committee work, which has averaged about $40,000 per year for MLAs, and erupted into an election issue. Mr. Major also recommended slashing so-called transition bonuses for retiring or defeated MLAs, which have reached $1-million in some cases, while adding the type of defined-benefit pension plan that former premier Ralph Klein eliminated two decades ago.

MLA pay must be competitive with comparable public sector positions to ensure “the recruitment and retention of qualified and competent candidates,” Mr. Major wrote.

The proposed pension would not be particularly lucrative compared with those in other provinces – only Ontario, Manitoba and Saskatchewan contribute less to legislator’s retirement – but the suggestion nonetheless won’t be popular.

“It doesn’t shock me that [Mr. Major]is recommending a pension plan. I mean, he’s a judge. He has a gold-plated pension plan,” said Scott Hennig, the Alberta director of the Canadian Taxpayers Federation, who approved of the proposed base salary but would prefer Alberta to avoid defined-benefit plans. “It’s completely out of line with public expectations.”

The province’s other parties are divided over the report. The Liberals would reduce, but not cancel, committee pay. The NDP supports modest pensions, while Wildrose has advocated for pay cuts.

Wildrose deputy house leader Shayne Saskiw called the pension plan “disconcerting,” and said cabinet ministers should rescind the pay raise they took in 2008, something the report doesn’t recommend.

New Democrat Leader Brian Mason said his party supports a pension in line with that of a teacher, nurse or police officer, but opposes “gold-plated” plans. Liberal Leader Raj Sherman said the report was a waste of money, agreeing pensions are a bad idea.

“We don’t want to replace the golden handshake with a golden parachute,” he said, adding: “If I was the premier, I wouldn’t have wasted money on this report.”

Ms. Redford acknowledged she has repeatedly promised to accept the recommendations, and said she will do so “with a couple of exceptions,” including the premier’s salary.

“I certainly wouldn’t want anyone leaving this room thinking that that is a recommendation that I will be implementing,” she said on Wednesday at a press conference that began 15 minutes after the report was released.

Alberta is one of two provinces to take advantage of a federal law that lets a province pay part of its MLAs’ salaries tax-free. Doing so saves the province money, the report found, because less money gets sent to federal tax collectors.

Mr. Major outlined two options: a salary of $134,000 fully taxed, or a lower salary with a portion tax free, which would be equivalent to the fully-taxed one. The latter option is actually cheaper for the province, but considered controversial because politicians pay a lower tax rate than average voters do.

Mr. Mason, for instance, said it’s worth the extra money, about $1-million, for MLAs’ pay to be fully taxable to avoid alienating the electorate. “The problem is the public actually views that as MLAs not being subject to the same rules they are,” he said.

Alberta has 87 MLAs, whose total compensation is about $17-million annually, or 0.043 per cent of the provincial budget. The salaries, nonetheless “generate considerable public and media angst,” the report found.

The report will go to the province’s all-party members’ services committee, which is responsible for implementing any or all of its recommendations. Mr. Major is scheduled to comment on his findings on Thursday.

Follow on Twitter: @josh_wingrove

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