http://business.financialpost.com/author/williamhanley/
Pity Gilles Duceppe. The leader of the Bloc Québécois spent almost two selfless decades in Parliament being paid handsomely by the taxpayers of Canada to try and pry the country apart. And what is his thanks after he was defeated in his own riding on Monday and the Bloc was reduced to four seats? He must now get by on a measly MP pension of just $141,000 a year, yet another insult to Quebec from Ottawa.
Of course, Duceppe is not the only former MP to be turfed on to the streets with nothing to show for years of service but measly pensions sometimes amounting to as little as $27,000 a year and only as much as $147,000.
But the Bloc’s ill wind has blown some good to the NDP and its unlikely cast of rookies from Quebec. They improbably find themselves headed to Ottawa, to annual salaries of $157,000 and, yes, to pensions of at least $27,000 a year at age 55 if only they can survive the next election some four years hence and sit a minimum six years in the House of Commons.
It depends on what Kool-Aid the Quebec electorate is drinking when the next election rolls around. Many of the new Quebec NDP MPs are likely to be one-term wonders, pinching themselves four years from now and wondering if it was all just a nice dream. But some no doubt will survive and be slated to enjoy the ultimate reward of a golden MP pension.
The Canadian Taxpayers Federation calculated this week that the 113 MPs who were either defeated in the election or retired before it will collect $4.9-million in pension payments in their first year and will get a cumulative $111.5-million by the time they reach 80. Another $4.3-million in severance will be handed to former MPs, including $116,624 to defeated Liberal leader Michael Ignatieff.
That it is so easy to ridicule this perpetual trough pension system starkly shows that it is ridiculous, an insult to taxpayers and no laughing matter. At a time when millions of Canadians are rightfully worried about how they will survive retirement and if their pensions will keep them in old age, the “leadership” of the country blithely maintains a plan that is not only overly generous, but downright unfair.
Yet Stephen Harper’s Conservative majority victory provides him and his party an opportunity to right this shameful situation. They can not only do the right thing and over time trim back MP pensions to something resembling real-world conditions and save taxpayers considerable sums. They can also be seen to be righting a flagrant abuse of power, demonstrating that some of the political ills built up over the generations can be remedied by bold intervention.
Just the basics of the MPs’ from-trough-to-grave self-service plan are ludicrous: Pensions are calculated on the best five earnings years and are locked in after only six years of “service.” Backbenchers make about $157,000 a year and will qualify for a minimum indexed lifetime pension of $27,000 a year when they reach age 55. As a result, an MP sacrificing all of six years in the House could pocket $675,000 (in today’s dollars) if he were to reach 80.
The system adds insult to injury after this election because the defeated and retired Bloc MPs – dedicated to pulling the country apart at taxpayers’ expense – will pocket a total of about $2-million in their first year of retirement and tens upon tens of millions over the lives of their pensions.
There is little that can be done to change that and other distasteful MP pension facts. The taxpayer will have to live with the results of a system run out of control by politicians who were either greedy or ****less or both.
But the Tories with their majority of four-plus years can do something to reform a pension plan that allows MPs to put in just one dollar for every four the government puts up.
Defined-benefit public pensions systems in which governments match employee contributions dollar for dollar are unsustainable. The federal Tories and other governments and jurisdictions across the country will be addressing such problems in the years to come.
Demographics and deficits will help focus the national debate on pensions at all levels, expecially governmental. Prime Minister Harper can help get the debate really rolling by announcing a review of MPs’ pensions with a view to at least putting them in line with those of other public servants.
Like other people, MPs will have to make do with less. They can send a mighty message by cutting their own bloated pensions over time.
As for Gilles Duceppe, I hope he’s been racking up the RRSPs to cushion the blow of making only a measly $141,000 a year for the rest of his life
