Under legislation, MPs’ yearly salary increases are tied to the average wage settlements negotiated in private-sector companies that have more than 500 employees. That means they are automatically entitled to the average 2.3 per-cent wage hike private sector employers gave their employees in 2014.
The secretive Board of Internal Economy, a group of MPs who oversee the administration of the House of Commons, has been advised of the increase and it’s expected that all MPs will soon be notified of the raise, which kicks in April 1.
The board doesn’t have to accept the increase. For example, MPs faced a three-year wage freeze between 2009-10 and 2012-13, in the aftermath of the financial crisis.
Senators, whose salary increases are tied to those of MPs, will also get a raise.
With the increase, the base salary of an MP will jump from $163,700 to $167,400. The raise for senators, who now earn a base salary of $138,700, will be slightly higher in percentage terms: By law, senators must be paid $25,000 less than MPs. That means senators will earn $142,400 in base salary starting April 1, a 2.7-per-cent increase.
The increase will also extend to the additional salaries MPs and senators earn for extra tasks, from deputy whips and committee chairs and up.
For example, the prime minister will earn an additional $167,400, on top of his MP pay, for a total salary of $334,800. Ministers, the Speaker and the leader of the Opposition will make $247,500.
The formula for parliamentarians’ wage increases is spelled out in the Parliament of Canada Act. It links MPs’ raises to the average increases negotiated by unions for large private sector firms with more than 500 employees. The data are collected by the labour program at Employment and Social Development Canada.
With an election scheduled this year, the pay hike is timely because it will also boost severance and pension payments for those who are leaving politics, whether they decide not to run or whether they lose their seats in the election.
Compensation is a sensitive issue in Ottawa these days, given Treasury Board President Tony Clement’s longstanding vow to bring the pay and benefits of public servants in line with those of the private sector.
Interestingly, the private-sector increases the MPs are linked to have outstripped the average wages negotiated by unions with similarly large employers in the public sector every year since 2010.
A Treasury Board official wouldn’t say what wage benchmarks the government uses when negotiating with federal unions.
“Minister Clement is focused on making the cost of government more affordable and accountable to taxpayers,” said Heather Domereckyj, Clement’s press secretary.
Meanwhile, in the federal public service, employees have yet to get a raise for 2014-15.
The 6,500 executives in the public service are still waiting to hear whether they are getting a raise, with only a few weeks left in the 2014-15 fiscal year. They got a one-per-cent raise last year, less than the 1.5-per-cent raise unionized employees received and the 2.2-per-cent hike MPs got.
The 17 federal unions are still in bargaining, where the big issue is surrendering accumulated sick leave, and there’s no deal in sight yet. So far the government has offered them a 0.5-per-cent raise in each of the next three years.
Ron Cochrane, co-chair of the union-management National Joint Council, said the drive to rein in public sector pay and benefits is “hypocritical” because it’s all aimed at public servants while the MPs and senators “coddle” themselves.
“It’s ‘do as I say,’ not ‘do I as I do,’” said Cochrane. “They have the Cadillac benefits and forget about making any comparisons for themselves and just try and take away the long and hard-earned benefits earned in collective bargaining.
“That’s a poor way of leading by example … If they want to set an example, they shouldn’t be taking from their own employees and keeping it for themselves, especially when the base salary is nearly three times the average in the public service.”
The abolition of severance payments for voluntary departures from the public service was a key piece of the Conservatives’ promise to bring federal benefits in line with the private sector. It rankles unions that a similar severance package for MPs who voluntarily decide not to run has remained intact.
Some of the 44 MPs who have decided to bow out in the next election will be entitled to severance-pay lump-sum payments worth half of their salaries.
The government’s decision to eliminate severance pay for public servants who voluntarily quit, leave or retire from the public service was the first major concession extracted from unions, despite a long battle to save it.
Public servants accumulated one week of pay for every year worked, which they could collect when they voluntarily left, resigned or quit the public service. The Conservatives abolished it and are now cashing out employees for the severance pay they earned in order to wipe the $6 billion liability off the books. The move is expected to eventually save $500 million a year.
Aaron Wudrick, federal director of the Canadian Taxpayers Federation, said the severance paid to public servants and MPs for voluntary departures can’t be compared. He argued the severance package is an incentive to ensure MPs who want to leave actually finish their terms, thereby avoiding the cost and disruption of byelections.
MPs are entitled to various allowances if they resign, decide not to run or are not re-elected, depending on their age and years of service.
Those who have less than six years of pensionable service when they leave are entitled to both severance – half a year’s pay – and a withdrawal allowance, which is a lump-sum payment of what they paid into the pension plan, with interest.
MPs who have six years of service and are under the age of 55 are entitled to severance but those who are 55 or older aren’t. They can start collecting their pensions.
In this round of bargaining, the government wants to abolish accumulated sick-leave benefits for unions as part of its drive to reduce absenteeism and replace it with new disability plans. Clement has said his mandate to reform sick leave and disability management is limited to public servants and doesn’t extend to MPs.
MPs currently get unlimited sick leave. They are required to submit regular attendance reports when the House is sitting but illness and absences for official business are considered as “days of attendance.”
But few perks spark controversy like pensions. Wudrick said Canadians have long envied public servants’ pensions and those of MPs are even better.
The Conservatives brought in sweeping changes to pensions for both MPs and public servants that will force them to pay more and work longer before they can retire with full pension benefits. Both are expected to foot half the bill for their pension contributions by 2017 – MPs now pay 14 per cent – and the retirement age is increasing from age 55 to 65.
The changes for MPs, however, don’t come into effect until January 2016, after a new Parliament is elected — which is a big incentive for long-serving MPs to reconsider whether they want to seek re-election in 2015.
“They have come a long way to bring those down … they were outrageous before and now they are generous compared to the ordinary Canadian,” said Wudrick.
Original Article
Source: canada.com/
Author: KATHRYN MAY
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