Business Expert Says Canada not Paying MPs Enough

Pay increases for politicians are seldom popular. Just about every time politicians vote themselves a raise there's a big ruckus from the general public who don't believe their elected officials deserve such high salaries.

Some argue that the maximum amount payable should be limited to the average income earned by the constituents an MP represents. Or that a politician's income should be dependent upon performance

Others believe high salaries are necessary in order to attract the best brains and the most accomplished people to the job.

But should politicians be paid on a par with CEOs in the private sector? According to Ian Lee, director of the MBA program at Carleton University's Sprott School of Business, Canadian politicians are not paid nearly enough considering the type of work they do.

"Our Prime Minister and cabinet ministers are grotesquely, radically and profoundly underpaid. They are executives running the equivalent of multi-billion dollar corporations, yet the Prime Minister is paid $155, 400 and ministers $74.400 base salaries. This is a sick joke."

Lee holds that, since politicians are in the unique position of "representing the public interest and the public good of Canada," they deserve higher pay.

"They vote to pass laws that can do such things as increase our taxes, take away our freedoms…these are not run-of-the-mill, trivial responsibilities.

"Do we want honest and not corrupt MPs? If we do, then let's pay them and not tempt them with terribly inadequate salaries…. Let's not entice them and motivate them to do anything inappropriate…there's enormous stress and pressure on these people."

But Lee's advocacy for higher salaries for MPs is challenged by the very people he's trying to help.

Ottawa MP Mauril Bélanger, who was Minister for Democratic Reform, Deputy Leader of the House of Commons and Chief Government Whip under Paul Martin's Liberal government, doesn't agree that politicians are underpaid.

"MPs current salaries are adequate," he says, adding that salaries shouldn't be so high that money becomes the only incentive to enter politics.

Alexa McDonough, elected as federal NDP leader in 1995, says she doesn't know of "a single NDP who thinks we're underpaid…MPs are extremely well paid by any calculation.

"Anybody who characterizes MPs pay as grossly inadequate doesn't understand you wouldn't do this job for the money in the first place."

McDonough is referring to a quote by Sean MacDonald, a professor at the University of Manitoba's Asper School of Business, in an article this month in the Hill Times, a weekly publication that reports on politics.

MacDonald said Canadian MPs salaries didn't match those in the private sector nationally or internationally. He maintained that MPs got into politics "simply for the power" and paying them poorly means "we'll never get good people in office."

Macdonald would like to see MPs salaries linked to the consumer price index or a universal inflation index. MPs Karen Redman, Libby Davies and Jay Hill who were interviewed for the article said their wages were fair.

Regarding pay scale, Bélanger says there's "a formula which is attached to a compendium of indices and annually there's an adjustment."

But the way Lee looks at it, the Board of Internal Economy, which is responsible for finances and administration of the House of Commons, essentially makes political judgments based on Canadian values.

"There's no bible or magic word that says MPs should be paid ten, 50 or 80 per cent of the average industrial wage; these are arbitrary formulas of the Board of Internal Economy."

When it comes to pensions, Lee says an MP's pension is definitely better than in the private sector, the only unfairness relative to the private sector being they can withdraw their pensions at age 55.

As in the private sector, within budget limits and upon presentation of receipts, MPs are reimbursed all costs involved in doing their jobs such as for travel, hotel accommodation, and food and rent allowance.

As for Senators, Lee says a lot of Canadians "resent the undemocratic nature of the Senate regardless of political party… so anything we pay them is seen as illegitimate."

Bélanger says there have been times in the past when fiscal restraint was the order of the day, including the freezing of MP's and public servants' wages during the entire tenure of former Prime Minister Jean Chrétien.

"We were facing huge deficits and Canadians were facing difficult times. For politicians to give themselves a pay raise was not the most attractive thing to do, so quite often we just said no," says Bélanger.

McDonough sees her job as an "enormous privilege" and believes MPs salaries should "relate to" the average Canadian wage. She's against paying politicians the "obscene salaries of CEOs of oil companies and bank companies."

A 1998 research paper by a commission to review MPs allowances found that many MPs enter politics about mid-point during their careers in the private sector, and that political life is "neither a windfall nor a major financial loss" for most.

The paper stated that the "patina" of glamour and prestige quickly wear off and life in politics usually takes a high toll on MPs and their families before, during and after politics.

Bélanger, who describes Parliament as "a very stimulating environment," says that while there's a case to be made for adequate compensation, "people who seek to be elected know the conditions…we're all consenting adults."