The
following letter was faxed to the Independent Commission
to Review MLA Compensation today. If you would like to make
a submission to the Commission, please use the address captioned
below. Don't expect a media campaign inviting your submission.
The Commission was appointed
on January 30, 2007, and given 90 days to report. Their
early May report will arrive in time for the Legislature
to implement it before it adjourns.
February
16, 2007
Independent
Commission to Review MLA Compensation
c/o Fasken Martineau DuMoulin LLP
2100 - 1075 West Georgia Street
Vancouver, BC V6E 3G2
Dear
Commissioners:
The
purpose of this submission is to argue that there should
be no change in the salary and pension benefits currently
enjoyed by BC MLAs.
Nowhere
on the Legislative, Government or political party websites
can one find a full listing of the salaries, benefits and
expense allowances for MLAs. Whatever you recommend with
respect to their pay and pensions, I urge you to also recommend
that all details of the compensation and expense package
be readily available on the Legislative website.
I was
elected MLA for North Vancouver-Lonsdale in 1991. During
my five year term, MLA salaries were frozen and we legislated
the end of the very rich defined benefit pension plan. Salaries
were substantially increased following the adoption of the
1997 Citizen's Panel Report on MLA Compensation. Compensation
arrangements are handled by the very secretive Legislative
Assembly Management Committee (LAMC), one of the rare
committees whose work is not recorded by Hansard. Bill 51(1997)
increased the powers of LAMC to set salaries for: the Speaker,
the Deputy Speaker, the Deputy Chair, Committee of the Whole,
the Leader of the Official Opposition, the Leader of a recognized
political party other than the government or opposition,
the Government Whip, the Deputy Government Whip, the Opposition
House Leader, the House Leader of a recognized political
party other than the government or opposition, the Official
Opposition Whip, the Party Whip of a recognized political
party other than the government or opposition, the Government
Caucus Chair, the Official Opposition Caucus Chair, the
Caucus Chair of a recognized political party other than
the government or opposition, and the Chair of Select Standing
or Special Committees. It is hard to find a member of the
government caucus that doesn't receive at least $5,000 more
than the base salary, and several opposition members also
enjoy pay above the base. Bill 51 also allowed LAMC to establish
a group registered retirement savings plan which effectively
re-instated MLA pensions in the form of a defined contribution
plan to which the employer pays 9.0% of base pay.
In 2004,
only 453,770 British Columbians reported registered pension
plan contributions, and only 776,790 reported RRSP contributions
averaging $4,418. Employment income was reported by 1,840,380
people, so most have no form of pension whether it be defined
benefit or defined contribution. Most British Columbians
would probably consider themselves lucky to have $6,849
per year contributed to an RRSP on their behalf like our
MLAs. Invested over a 40 year working career, those contributions
form a good basis for retirement. We shouldn't expect MLAs
to have instantly vested full defined benefit pensions after
serving only one or two four year terms.
The
base pay for MLAs is indexed with a complicated formula
that includes both average pay for all workers and the consumer
price index. Currently at $76,100 it is 36% higher than
the 2004 median BC family income of $55,900, and to earn
it some families must have more than one wage earner to
make that income. Comparison to the incomes enjoyed by most
British Columbians is particularly important since those
are the people the MLAs are elected to represent, and they
are the people who ultimately pay the MLAs salary. According
to Revenue Canada's taxation statistics for 2004 (the most
recent year available), 90% of the 3,029,720 people who
filed income tax returns reported income from all sources
of less than $70,000. More than 9 out of 10 British Columbians
make less than the current base pay received by MLAs.
Government
hires expertise; the voters elect MLAs. It is important
to keep that distinction in mind because MLAs are briefed
by and lobbied by many well-paid people and some begin to
feel that they are part of that circle and should be paid
accordingly. We wouldn't want our MLAs to be so poorly paid
that they would have to moonlight or worse, but we also
shouldn't want them so highly paid that they lose touch
with what life is like for the vast majority of people they
represent.
Unlike
deputy ministers, MLAs get their jobs by getting the most
votes, not by being the most qualified in any particular
field. Some are relatively young and will likely work for
many years after they leave politics. Other are over age
65, and notwithstanding BC eliminating mandatory retirement,
it is fair to say that they are unlikely to seek further
employment after leaving politics. That variety in work
history and proximity to retirement is relevant to the argument
that MLAs disrupt their careers and should be compensated
for that sacrifice. No one forced any of our elected representatives
to disrupt their careers and some, perhaps many, did not
do so. MLAs take a lot of abuse; it is not the purpose of
this argument to add to that abuse but merely to argue that
there is not a case to compensate them for any loss. For
every MLA there were several others on the ballot who wanted
the job, and there were dozens more who unsuccessfully sought
nominations. If supply and demand determined their compensation,
there would be downward pressure on their wages.
In The
Intelligent Woman's Guide to Socialism and Capitalism,
George Bernard Shaw wrote: "It is no use saying that
it is scandalous that Mrs. A. should have a thousand pounds
a day and poor Mrs. B. only half a crown. If you want the
law altered you must be prepared to say how much you think
Mrs. A. should have, and how much Mrs. B. should have. And
that is where the real trouble begins. We are all ready
to say that Mrs. B. ought to have more, and Mrs. A. less;
but when we are asked to say exactly how much more and how
much less, some say one thing; others say another; and most
of use have nothing to say at all except perhaps that Mrs.
A. ought to be ashamed of herself or that it serves Mrs.
B. right." As Commissioners you have the trouble of
saying not more or less, but saying exactly how much more
or less MLAs should be paid. While I argue here that they
should not be paid more, in either salary or pensions, you
might ask whether I would extend my argument to the point
of asking for a reduction in compensation. The reason I
argue for no change is that the current compensation provisions
are what were in place when our MLAs were elected in 2005.
Nothing has changed in less than two years that justifies
either an increase or a decrease.
Sincerely,
David
D. Schreck
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