MLA Compensation Review – Alberta May 2012 Report
The Honourable J.C. Major, CC, QC
REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Review of Compensation of Members of the Legislative Assembly of Alberta
A Report
May 2012 Commissioner: The Honourable J.C. Major, CC, QC
“MLAs must realize that their primary purpose is to maintain the integrity of democracy and that all of their actions should focus on that goal. Serving their constituents is noble, but does not necessarily protect the freedom of the individual inherent in democracy. Serving, legislating, regulating, debating, voting and all other MLA actions, if not properly focused, could erode our democratic principles.”
The Honourable Raymond (Ray) Speaker, PC, OC
Review of Compensation of Members of the Legislative Assembly of Alberta | 5 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Table of Contents
Acknowledgements 8
Summary of Recommendations 9
Section 1: Introduction 10
1.1 Mandate...... 11 1.2 Guiding Principles...... 12 1.3 Publicity of Review and Summary of Evidence Gathered...... 13 1.4 Principle Areas of Concern...... 15
Section 2: Evidence 16
2.1 Current MLA Compensation and Benefit Package...... 17 2.2 The Role of an MLA...... 19 2.3 The Highs and Lows of the Position of MLA...... 22 2.4 Fair Compensation...... 24 2.5 The Use of Comparators...... 26 2.6 Hay Group Report...... 28 2.7 Aon Hewitt Report...... 30
Section 3: Conclusions and Recommendations 32
3.1 Base Salary...... 33 3.2 Offices Other Than MLA...... 35 3.3 Tax-Free Allowance...... 39 3.4 Transition Allowance...... 41 3.5 Pension...... 43 3.6 Other Benefits...... 47 3.7 Indexing...... 48 3.8 Future Review...... 49 3.9 Implications of Recommendations...... 50
6 | Table of Contents REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Appendices 52
A List of Alberta papers that carried notices of the review and copies of the notices...... 54 B Calendar of when notices appeared in papers...... 62 C Cheryl Scarlett’s written submission and exhibits...... 64 D Member cash compensation comparisons for provincial, territorial and federal legislators in Canada...... 92 E Member total compensation comparisons for provincial, territorial and federal legislators in Canada...... 94 F Dr. Allan Tupper’s written submission...... 96 G Dr. David Docherty’s written submission...... 115 H Raymond Speaker’s written submission...... 122 I Dr. Herbert Grubel’s written submission...... 130 J Hay Group Report...... 152 K Aon Hewitt Report...... 224 L Transcripts from the January 23rd, 2012, public hearings in Edmonton...... 238 M Transcripts from the February 2nd, 2012, public hearings in Calgary...... 277 N Member total compensation comparisons and proposed Alberta salary and pension (FULLY TAXABLE)...... 318 O Member total compensation comparisons and proposed Alberta salary and pension (w/ TAX-FREE ALLOWANCE)... 320 P Cabinet Minister total compensation comparisons and present Alberta Cabinet salary...... 322 Q Cabinet Minister total compensation comparisons and proposed Alberta Cabinet salary (FULLY TAXABLE)...... 324 R Cabinet Minister total compensation comparisons and proposed Alberta Cabinet salary (w/ TAX-FREE ALLOWANCE)...... 326
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Acknowledgements
The Commission thanks the Legislative Assembly Office for information provided for this review. The Commission also thanks all the participants who shared their views at the Edmonton and Calgary public hearings; in particular, the Honourable Ray Speaker, Dr. Allan Tupper, Dr. David Docherty and Dr. Herbert Grubel. The Commission is grateful to Jessica Hogan for providing professional writing and editing expertise in the preparation of this Report. To all those who provided a written submission, the Commission is grateful for their interest.
8 | Acknowledgements REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Summary of Recommendations
Compensation for the basic MLA role is expressed as a single amount and encompasses all legislative, constituency and committee duties. It is competitively placed around the median when compared to other government and broader public sector markets, and is placed at a lower percentile when compared to private sector markets. Given the additional responsibilities involved in chairing committees, an appropriate stipend should be paid to the chair (or presiding Member) of all Assembly and Government committees. The stipend is to be provided on a per-meeting basis. Additional compensation for Offices other than MLA and for MLAs in Special Members’ roles is dealt with on an individual basis. Historical trends were observed and in many cases have been maintained. Existing ratios between various offices with respect to additional remuneration have been maintained to a large extent. Compensation for the Office of Premier is to be increased to be commensurate with the duties and responsibilities of the role and to reflect the importance of the position. It is recommended that the tax-free allowance be retained as it is of significant economic benefit to the Province of Alberta to do so. The cost savings to Albertans are illustrated in some detail. However, provisions are also made for eliminating the tax-free allowance, should the Legislative Assembly of Alberta decide to do so. The present transition allowance is discontinued. A reduced transition allowance with a precise maximum is suggested, which is intended only to provide short-term assistance to departing MLAs on re-entering private life. The present RRSP allowance contributions provided to MLAs are discontinued. In light of substantially curtailing the present transition allowance and discontinuing the RRSP allowance contributions, the re-institution of a pension plan for MLAs is recommended. It is to be implemented on a go-forward basis with no recognition of past service. Health, life insurance and disability benefits remain unchanged. MLAs’ salaries are indexed annually in accordance with the Alberta Consumer Price Index (CPI). MLA compensation is to be reviewed every four years by a three-person committee consisting of the Chief Justice of the Alberta Queen’s Bench and two other judges from that court. The implementation of these recommendations in full would result in a reduced total compensation for Alberta MLAs. (page 50) The overall cost to the province for implementing these recommendations for Alberta’s 87 MLAs is approximately the same as it was to compensate Alberta’s 83 MLAs for 2011/2012.
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Section 1: Introduction
th
On November 30 , 2011, Speaker Ken Kowalski of the Legislative Assembly of Alberta appointed this Commission to conduct an independent review of the compensation and benefit package for Members of the Legislativerd Assemblynd (MLAs) and to submit a final report of the review within 120 days of January 3 , 2012 (by May 2 , 2012). Both the review and the report were to be completed in accordance with the following Mandate.
10 | Section 1: Introduction REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 1.1Mandate
To review and make recommendations to the Assembly regarding the compensation, benefits and allowances to be paid to the Members of the Legislative Assembly under the authority of the Assembly or the Government of Alberta, such items to include: 1) Member Indemnity and Tax Free Expense Allowance 2) Allowances for Offices other than MLA (Premier, Speaker, Minister with Portfolio, Minister without Portfolio, Leader of the Official Opposition, Deputy Speaker and Chair of Committees, Deputy Chair of Committees, Leader of a Recognized Opposition Party) 3) Special Members’ Allowances (Official Opposition House Leader, Third Party House Leader, Chief Government Whip, Assistant Government Whip, Chief Opposition Whip, Assistant Opposition Whip, Third Party Whip) 4) Compensation for serving on Legislative Assembly committees 5) Compensation for serving on Government committees and holding other government funded offices 6) The RRSP Allowance 7) The Transition Allowance and/or consideration of a pension plan. 8) Health Care Benefits and Life Insurance Provisions
Benchmarks:9) The impact on Members of ‘double dipping’ provisions in some pension plans
1) The Panel would make appropriate compensation and benefit comparisons to other jurisdictions including:
2) Canadian federal, provincial and territorial parliaments
3) Comparable Commonwealth parliaments
4) Alberta Queen’s Bench and Provincial Court Judges
5) Senior public servants in Alberta including provincial, university, municipal, education and health care sectors
Expectations:6) Others as determined by the panel
by the Legislative Assembly 1) The Panel would review the above matters and provide recommendations for consideration
2) The Panel would make recommendations on the process for future review and adjustment of Members’ compensation, benefits and allowances 1.1 Mandate | 11 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 1.2Guiding Principles
The following list outlines the general principles that guided the Commission in the preparation of this Report. First, clarity and accessibility have been two essential principles in this undertaking. The Commission’s aim was to make the Report clear, accessible and comprehensible to the general public, and to avoid the technical terminology that exists on the subject of compensation. Second, transparency is necessary. This principle must apply to both the process of preparing the Report and its recommendations. The evidence gathered by the Commission on MLA compensation and the conclusions drawn based on that evidence should be open and transparent to the public. A third goal, which relates to the second principle, is to gain the public confidence in MLA compensation and in the Legislative Assembly of Alberta. It is understandable that Albertans, as interested taxpayers, dislike—and distrust—a complex compensation system with elements that are regarded as hidden or unfair. The aim is for the recommendations contained in this Report to allow Albertans to understand the process by which their representatives are remunerated, although they may disagree with the result. To that end, an attempt has been made to use objective criteria available in the analysis of the position of MLA and in the assessment of MLA compensation. Fourthly, the recruitment and retention of qualified and competent candidates must be an objective of this Report. Albertans expect—and should attract—the most qualified representatives prepared to undertake public service. Finally, it is recognized that the principal objective is to recommend compensation that is fair and reasonable to the Members who work in the Legislative Assembly and understandable to the taxpayers to whom they are accountable. Members should be remunerated in total in a manner that is commensurate with the duties, responsibilities and importance of their role.
12 | 1.2 Guiding Principles REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 1.3Publicity of Review and Summary of Evidence Gathered
At the beginning of this review, notice was given to Albertans to provide their input. Members of the public were encouraged to share their ideas and opinionsth either by appearing before thest Commission at one of the public hearings in the province, or by filing a written submission. The latter were accepted by mail or email until February 24 , 2012, but all received by March 1 , 2012, were included as evidence. To facilitate the public’s participation and access to information regarding the MLA compensation review, a website was created (www.mlacompensationreview-alberta.ca). Thesubmissions@ schedule for the public hearings was posted on the website, as werest instructions for how to register as a presenter. A separate email address was established for written submissions ( mlacompensationreview-alberta.ca). As of March 1 , 2012, the website received 2,172 visits that generated 16,724 page views. On January 9th In addition to the website, notices for the public hearings were published in multiple newspapers. , 2012, notice of the formation of the Commissionth and generalst notice of the upcoming hearings was published in nine major daily newspapers, and, in the same week, in 98 weekly papers throughout the province. Between January 11 and January 21 , more specific notice of the dates, times and locations of the public hearings was published in the major daily newspapers. The full list of papers that carried the notices and copies of the notices as they appeared is attached to this Report as Appendix A, and a calendar of when the notices were published is attached as Appendix B. Originally, there were to be seven public hearings held throughout the province over the course of two weeks (in Edmonton, Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat, Red Deer and Calgary). However, due to a marked lack of public response, all but the Edmonton and Calgary public hearings were cancelled. The few interested participants who had responded where hearings were cancelled were invited to attend in either Edmonton or Calgary at the expense of the Commission; one person accepted that invitation and appeared in Calgary. In all, 24 witnesses appeared before the Commission over the course of two days of afternoon and evening hearings at the Edmonton and Calgary public meetings. Five of these were ‘experts’ retained by the Commission for the purpose of this review, and the rest testified either as private citizens, MLAs, former MLAs or as organizations. All of the witnesses’ papers were marked as Exhibits and posted on the website. Transcripts of all of the testimonies were prepared and likewise posted. In addition, the Commission received 285 written submissions, all of which are posted on the website and included in the enclosed CD. The Commission retained the services of Hay Group, a global management consulting firm, to perform a job evaluation of the position of MLA and the other roles named in parts 2 and 3 of the Mandate. Hay Group has approximately 2,600 consultants and support staff worldwide and have been in operation for almost 70 years. They offer human resource consulting for their clients, a large part of which deals with compensation and rewards. Hay Group’s methodology offers a means of more objectively assessing the role of MLA and placing a value on the position itself. The evaluation takes into consideration the job’s complexity in terms of the knowledge, the skills, the creative thinking and the level of accountability required. The consistency of their methodology allows them to compare compensation data across all industries and sectors. Based on their independent evaluation of the MLA role, and using 1.3 Publicity of Review and Summary of Evidence Gathered | 13 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
various comparators in the private and public sectors, they analyzed and assessed the current compensation and benefits of Alberta MLAs. Hay Group submitted a report to the Commission based on its findings, which is attached as Appendix J. Additionally, the Commission engaged the services of Aon Hewitt to provide actuarial evidence on the cost of various pension and benefit arrangements. Aon Hewitt submitted this evidence to the Commission in a report, which is attached as Appendix K. To summarize, the evidence gathered by the Commission comprises the testimonies of the five ‘expert’ presenters and 19 other presenters, all 285 of the written submissions, Hay Group’s Report and Aon Hewitt’s evidence. Notice was taken of ‘unofficial’ evidence such as media coverage as well. I thank those who shared their ideas and opinions during this review. The testimonies and recommendations without evidentiary foundation were of modest help, although they were expressions of interest. Many of the written submissions were single sentences criticizing MLA compensation, the inference being that the lower the pay, the better the government of the province would be.
14 | 1.3 Publicity of Review and Summary of Evidence Gathered REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 1.4Principle Areas of Concern
From the evidence gathered, there are six specific aspects of Member remuneration that have generated the most comments and annoyance. They were: 1) The general lack of transparency with respect to MLA remuneration and benefits;
2) The difficulty or inability to determine the total actual compensation of MLAs;
3) Dissatisfaction with the tax-free allowance provided to MLAs ($26,046 annually);
4) Dissatisfaction with either the existence or the generosity of the transition allowance (set at three months’ pay for every year of service, with no maximum, based on the average earnings for the Member’s best three years);
5) Dissatisfaction with the extra compensation provided to MLAs for sitting on various committees, particularly those committees that failed to meet or met infrequently; and
6) The monies paid by the Alberta Legislative Assembly to all MLAs annually as RRSP allowances ($11,225.00 for 2011), or other pension-related considerations.
It is of some interest that, while the annual budget of Alberta is in excess of $39.4 billion and the total compensation (including benefits) of the Legislative Assembly’s elected members makes up only 0.043 per cent of that value (about $17 million), the issue of MLA remuneration generates considerable public and media angst. I believe that whatever the reason, this fact alone as well as the obscure nature of the compensation require consideration.
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Section 2: Evidence
16 | Section 2: Evidence REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 2.1 Current MLA Compensation and Benefit Package
The first witness at the Edmonton public hearing was Cheryl Scarlett, Director of Human Resources, Information Technology and Broadcast Services for the Legislative Assembly Office. Ms. Scarlett explained the current compensation, benefits and entitlements provided to Alberta MLAs. Ms. Scarlett’s written submission and its accompanying Exhibits are attached as Appendix C. The transcript of her testimony is included in Appendix L. All MLAs receiveIncome an Tax indemnity Act (1985) of $52,092.00 and a tax-free allowance of $26,046.00, totaling $78,138.00 as a base salary. The tax-free allowance is an exemption provided under Sect. 81 of the federal as a benefit for provincial legislators. The Act makes similar provisions for civic legislators as well. Notably, while all provincial jurisdictions are entitled to make use of this tax exemption in the compensation of their legislators, only Alberta, Quebec, Yukon and the Northwest Territories currently do so. Throughout this Report, the term ‘grossed up’ is frequently employed when referring to salaries that include a tax-free allowance. This means that to keep an MLA at the same net level of compensation if the tax exemption were removed would require an increase in payment—a ‘gross up.’ When comparing compensation across all the provinces, the ‘grossed-up’ amounts provide more accurate illustrations of the salaries as fully taxable incomes and can therefore be more readily compared to the salaries in jurisdictions that do not provide a tax-free allowance. For information purposes, if Alberta MLAs did not receive the tax-free allowance but rather were paid a fully taxed salary that yielded the same net income for the Members, the above-mentioned base salary of $78,138.00 would be ‘grossed up’ to an equivalent taxable amount of $90,708.00. This is a difference of $12,570.00. The implications of this are that for every MLA to be paid a fully taxable salary of the same net amount as they currently receive, the cost to the province would be more than $1.04 million ($12,570.00 times 83 MLAs), all of which would go to Canada Revenue Agency in the form of income taxes. In Alberta, MLA salaries have remained unchanged since April 2008. Previously, salaries were adjusted annually in accordance with the Alberta Average Weekly Earnings, as reported by Statistics Canada. Had this indexing been applied from 2008 to 2012, salaries would have increased by 24.66 per cent. 1 Supplementary to MLAs’ base salary is remuneration received by Members for serving on committees of the Assembly and committees of the Government. With respect to Legislative Assembly committees, MLAs receive $1,500.00 per month for chairing a committee, $1,250.00 per month to serve as deputy chair, and $1,000.00 per month to serve as a member. There is no limit on the number of legislative committees on which an MLA can serve, but they are restricted to receiving pay for three committees up to a maximum of $3,500.00 per month. An MLA who belongs to the governing party is entitled to additional compensation for serving on Government committees. Overall, the average total of additional annual compensation received by MLAs for their committee work (as calculated in February 2012) was $46,680.00 for Government MLAs and $38,250.00 for Opposition MLAs. 1 I am aware of the recent changes related to committee pay that have been implemented since the beginning of this review. In March 2012, all legislative and government committee pay was suspended. However, the information and recommendations contained in this Report refer to the circumstances of the Mandate and the process of committee pay that existed at the time this review was initiated.
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Cabinet Ministers and the Premier are ad hoc members of various committees and receive a monthly stipend of $2,967.00 and $3,483.00 respectively in recognition of their Government committee work. Similarly, the Speaker and the Leaders of the Opposition parties all receive a monthly stipend of $3,500.00 for their Assembly committee activity. The Members who hold these positions are not eligible for any extra remuneration for their work on committees of the Assembly or Government. Attached as Appendix D is a chart showing the cash compensation for legislators in all provinces and territories, as well as for MPs in the House of Commons; for those provinces and territories that provide a tax-free allowance, salaries have been ‘grossed up’ to the equivalent taxed income level. In addition to the MLA base salary of $78,138.00 (or ‘grossed-up’ equivalent of $90,708.00), Alberta Cabinet Ministers receive a salary of $63,912.00 and committee pay (mentioned above) of $35,604.00 for total annual remuneration of $177,654.00 ($190,224.00 ‘grossed up’). The Premier receives an additional salary of $81,312.00 and committee pay of $41,796.00 for a total annual remuneration of $201,246.00 ($213,816.00 ‘grossed up’). Other compensation providedIncome to MLAs Tax includes Act (Canada) the Legislative Assembly of Alberta’s annual payment to each Member of an RRSP allowance equivalent to one half of the allowable amount for that year pursuant to the during their tenure. This payment was $11,225.00 for 2011. Members do not receive any other form of pension as a result of their current service as MLAs. Additionally, MLAs are entitled to receive a transition allowance upon leaving office—regardless of the circumstances—equal to three months’ pay for every year served, with no limit on the amount realized. The payment is based on the average earnings for the Member’s best three years. The transition allowance is considered a retiring allowance under federal tax guidelines. Attached as Appendix E is a chart comparing the total compensation received by all federal, provincial and territorial legislators in Canada, based on the estimated value of the transition allowance for Alberta MLAs and the estimated pension values for other jurisdictions; again, salaries have been ‘grossed up’ for the provinces and territories that provide a tax-free allowance. In terms of benefits, MLAs are provided with a combined health benefit plan that is comparable to the benefits offered to management employees in the Alberta public service. The plan provides options for prescription and extended medical coverage, dental coverage and life insurance coverage, and Members can review and change their coverage levels every two years. Premiums for the benefit plans are shared by the Legislative Assembly Office and the Member. There is an Extended Benefits option offered to former Members as well. Individuals can elect to continue the benefit coverage they received on the above-mentioned plan when they resign, choose not to run for re-election or are defeated. Premiums continue to be shared by the Legislative Assembly Office and the former Member for the first five years, after which they are paid entirely by the retired Member if they choose to remain on the plan. MLAs are also provided with Long-term Disability Insurance (LTDI) coverage, which guarantees partial income (70 per cent of the eligible recurring annual salary) for a Member who becomes disabled during their term and must resign their seat as a result. The LTDI benefit continues until the individual is deemed fit to return to gainful employment or until they reach age 65. However, unlike typical employee disability plans, there is no option to ‘return to work’ for an MLA, as the MLA has resigned his or her seat.
18 | 2.1 Current MLA Compensation and Benefit Package REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 2.2 The Role of an MLA
The Commission heard a variety of testimonies (both ‘expert’ and personal) and reviewed numerous written submissions that related to compensation for MLAs. Many were critical of the current remuneration system and the MLAs that benefit from it, and some made suggestions that attempted to satisfy both the legislators and the public—a goal not easily reached. The evidence showed a general disparity between what the public perceives an MLA does (or believes he or she should do) and what in fact they are required and expected to do. While I have found that this is a problem common to other jurisdictions, there is a need to close that gap. Members of the public need to understand the unique nature of the role of an MLA before they can reasonably conclude whether MLAs are meeting their responsibilities or that their compensation is appropriate. On the other hand, Members need to appreciate what is the reasonable public expectation of their performance, both in the Legislature and in their constituencies. The aim is to consider the evidence with a view to properly compensating MLAs so as to attract the most competent individuals of those who are prepared to serve, even at some financial sacrifice. It is also the goal to properly explain compensation so as to satisfy Albertans, or at least explain the reasons for my recommendations. To achieve these objectives, the role and the value of our elected representatives must be properly assessed. The two people described below were retained by the Commission to give evidence for the purposes of this review. They both submitted papers and testified at some length on the role of the MLA and the importance of both legislators and Legislatures. Dr. Allan Tupper, Professor and Head of the Department of Political Science at the University of British Columbia in Vancouver, has 40 years’ experience as an academic in political science. He is also the author of numerous published works on the subject of democratic Legislatures. Dr. Tupper is obviously qualified as an expert in this field. Dr. David Docherty is President of Mount Royal University and has a PhD in Political Science. He has studied Legislative Assemblies and legislative careers across Canada and has published extensively on this subject. The evidence he has given to the Commission has not been in his capacity as a university president, but as a political scientist. He, too, is qualified as an expert and entitled to express his opinion on this subject. The following is a summary of the evidence given by both ‘experts’ relevant to the role of an MLA. Dr. Tupper’s and Dr. Docherty’s written submissions are attached to this Report as Appendices F and G, respectively. The transcripts of their testimonies are included in Appendix M. Alberta is governed by a system of representative democracy whereby the voters elect others to represent them and govern on their behalf. A Member of the Legislative Assembly of Alberta has been selected by his or her constituents through a free and fair electoral system to represent them. The personal autonomy, freedom of speech and association and political equality that all Albertans enjoy is possible only in a genuinely democratic system such as ours. A representative institution such as the Legislative Assembly of Alberta is an essential feature of a modern democracy. An MLA’s role is unique and varied. The representative function of an MLA is important and challenging. An MLA represents the residents of his or her constituency, a geographically defined community in a rural, urban or mixed area. An MLA also typically represents the ideological 2.2 The Role of an MLA | 19 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
views of the greatest percentage of his or her constituents, as the MLA is responsible for generally supporting the legislative aims of the party to which he or she belongs. However, a Member has a duty to represent all constituents, obviously including those who voted for another candidate or did not vote at all. The challenge in representation comes in trying to balance the diverse interests of the people in the riding and, in some instances, connecting the interests of the people with the policy of the Government. Most constituents expect their MLA to do what is best for them, their family or perhaps their community, not always aware that doing so can have an adverse effect on valid interests other than their own. MLAs face issues where no resolution will satisfy all interested parties. In short, an MLA must attempt to speak to the needs and ideals of all those he or she represents. 2 As of December 2011, there were 83 MLAs in Alberta, which is approximately one Member for every 46,000 citizens. This ratio means that the specific requirements, concerns and requests of every Albertan cannot realistically be met, yet it holds true that theoretically, every resident has direct access to his or her Member. It is of interest that both Dr. Tupper and Dr. Docherty made a case for increasing the number of members in provincial Legislative Assemblies. Larger Legislatures, they maintain, are the most effective means of controlling Governments and holding them to account. This view contrasts with some suggestions that fewer MLAs could be as effective and yet cost less. An obvious role of MLAs is their legislative one, the importance of which can hardly be overstated. When the Legislature is in session, usually during the spring and fall, MLAs introduce, debate, amend and pass legislation in an open public forum. This legislation relates to almost every aspect of our everyday lives, including health, education, justice, taxation and economic development, to name a few. The decisions of MLAs affect the quality of life of Albertans and the short – and long- term success of the province. Members who are also part of the Executive Branch of government (the Premier and Cabinet Ministers) make decisions that involve the budgeting and expenditure of billions of dollars of public monies. As issues are debated and legislative business is conducted in public view, MLAs are collectively held accountable to the public and individually to their constituents. In the execution of their legislative role, part of an MLA’s time is spent on committee work. It is in committees where groups of MLAs, generally from all parties, can meet to consider bills, propose amendments and examine Government ministries and policies. Outside of Question Period, this is where much debate occurs. Considerable research is often required for committee work, and it is on committees where MLAs frequently gain expertise in government. The purpose of most committees is to inform Government decision-making; the MLAs who serve on them are serving the needs and wishes of Albertans. Committees are not all equal, nor do they all perform in the same way. Some committees are active and challenging. The same does not apply to others whose mandate requires little work and fewer meetings. The fact that some committees do not meet regularly or function in a noticeable way does not diminish the value of the active ones. Another responsibility of MLAs is to act as a control on the Executive Branch of government—the Premier and Cabinet. It is the collective duty of all Members to hold the Government accountable 2 Electoral boundary changes made in January 2012 have resulted in four additional constituencies. There are now 87 MLAs in for theAlberta, administration which works out to of approximately the laws and one Member the expenditure for every 44,000 of citizens. public funds. Not surprisingly, this
20 | 2.2 The Role of an MLA REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
particular activity is primarily associated with the Opposition. They not only oppose the Government’s decisions,3 they are responsible for bringing issues of maladministration or error to light and for offering an alternative to the public. “Stronger Legislatures are the best antidote to executive dominance,” and “are essential to taming leader-dominated majority governments.”4 An important function of MLAs is their role in their constituency. When the Legislature is not in session, much of a Member’s time is devoted to constituency work. More than simply maintaining a constituency office, this involves being present and accessible in the riding. This may be more the case in rural ridings, where a Member often is—or soon becomes—personally known to his or her constituents. Attending constituency functions and ‘main-streeting’ form a regular part of many MLAs’ daily life in their ridings. In fact, when an MLA is in their constituency, he or she is effectively ‘on call’ at all hours of the day and any day of the week. Amongst Constituency work is in itself varied and often complicated. “It is a unique set of duties that requires patience, knowledge of government and a keen grasp of local sensitivities.”5 other things, it entails problem solving for constituents, explaining public policies, working with community groups, and attending and speaking at public functions. To that add ‘ribbon cutting’ and other social commitments. It is in the performance of these roles that MLAs have the most direct contact with those they represent and can listen to their concerns and views. The success of almost all politicians can be attributed to following the advice of the late U.S. Congressman Tip O’Neill, who notably said, “All politics is local.” After assessing the role of MLAs in their respective duties, Dr. Tupper and Dr. Docherty both offered their views on the issue of remuneration. Put simply, provincial Legislatures undertake important activities in governments that are central to citizens’ concerns and needs. It follows that the well being of many Canadians is heavily shaped by the decisions of provincial politicians. Canadians should care a great deal about the quality of people that represent them. Public policies should be undertaken that provide positive incentives for qualified persons to pursue elected public office in the provinces.6 Members require remuneration that reflects their many contributions, that allows them to serve without financial penalty and that recognizes the impact of public service on their personal lives.7 Democracy must be transparent, but it is not free, (nor is it cheap). Saving money should not be a driver in establishing salary levels … We must understand that while there is a financial price to pay for democratic representation, it is a price worth paying … In order to both attract and retain strong, capable [Members], we need to compensate them appropriately. We must recognize that for many [Members] and for others that might consider a stint in office, the salary … represents a fiscal sacrifice. Diverse and representative Assemblies should also reflect a diversity of occupations. While salaries of elected officials cannot compete with the highest salaries of the private (or even public) sector, neither should they be so low that they 3 Allandrive Tupper, good “Legislatures individuals in Democracies: away beforeRoles, Influence even andcontemplating Importance,” A Submission public to service. the Alberta8 MLA Compensation Review, February 2nd, 2012, p. 2 4 Tupper, p. 14 5 Tupper, p. 10 6 Tupper, p. 14 7 Tupper, p. 3 8 David Docherty, “Compensation for MLA’s,” A Submission to the Alberta MLA Compensation Review, February 2nd, 2012, pp. 1-2 2.2 The Role of an MLA | 21 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 2.3The Highs and Lows of the Position of MLA
Like any occupation, the position of MLA has its highs and lows. But the nature of these highs and lows is what makes it unlike any other occupation and a factor to consider in setting compensation. The Honourable Ray Speaker, PC, OC, is a former Alberta MLA both in government and in opposition, provincial Cabinet Minister and two-term MP. He has more than 30 years’ experience as a legislator in Canadian government, qualifying him to express an opinion on the functioning of Legislatures and legislators. Retained as an ‘expert’ by this Commission, he provided insight into the highlights and challenges of being an MLA. Mr. Speaker’s written submission is attached as Appendix H and the transcript of his testimony is included in Appendix L. Mr. Speaker testified that the nature and scope of the position of MLA has changed considerably over the course of Alberta’s history. Earlier it was a part-time job, which required the balancing of a regular full-time job with the duties of an MLA. More recently, as governments became more complex, so did the responsibilities of MLAs, and as the length of legislative sessions increased, so did the time expectations placed on the Members. Mr. Speaker felt that one of the most appealing aspects of being an MLA was the honour of serving the public. He believes MLAs have the opportunity to contribute in a tangible way to the quality of life of their fellow citizens and many who hold office regard it as a privilege. His evidence suggested the position has some marketable value and can bring with it some degree of celebrity status. Provincial politicians can become influential figures in society, and occasionally their careers as MLAs prepare them for other careers of significance in the public or private sectors. It is an interesting role, he said, and offers opportunities for travel that one would not otherwise have had. The high-profile nature of the position can be a double-edged sword. Being in the public eye is difficult, and necessarily involves a loss of privacy not only for the Member but also for his or her family. While MLAs’ successes rarely garner significant media attention, their failures (real or apparent) are almost always made public. MLAs are answerable to a number of different people themand groups: all. the public, the Premier, Cabinet Ministers, party leaders, party executives and, of course, their constituents. It is unique to have so many bosses; it is almost impossible to satisfy
Most MLAs also have demanding workloads. They must manage their schedules to accommodate their legislative and committee responsibilities, their constituency work, attending public functions, and other various obligations. With these demands they must balance their family or private life; for many Members, the latter is frequently sacrificed. MLAs whose permanent residence is outside of Edmonton expect to be away from home four to five days a week for five or six months of the year. The travel can be time-consuming and wearisome. Mr. Speaker’s statements on this subject were similar to those of former Speaker of the Legislative Assembly of Alberta Dr. David Carter, who testified to the death of three MLAs while traveling either by car or by plane to carry out official duties. With respect to the end of their career, many MLAs face a number of difficulties, not the least of which is—for many—the uncertainty of when it ends. There is no job security—an MLA remains employed at the pleasure of the constituents and therefore cannot easily plan for the future. Being
22 | 2.3 The Highs and Lows of the Position of MLA REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
elected an MLA means accepting a certain amount of risk with respect to one’s future career. A defeat at the polls is akin to being publicly fired, and can be traumatic. Mr. Speaker testified to having personally witnessed many cases of individual MLAs who struggled psychologically with losing an election and the practical difficulty of returning to private life. After losing an election, Mr. Speaker said, “a Member has got the plague.”9 There is often a stigma associated with former MLAs, and this can be intensified if the Member’s defeat occurred at the time of a change in the governing party. Re-employment can pose a great obstacle for these MLAs in spite of the opportunities offered a few. Some of the difficult cases that Mr. Speaker spoke to about Members returning to private life occurred when there was nothing offered in terms of transition allowances. Some of them … went through a difficult time. I think we have to be aware of that and try to deal with that issue. … [I]t’s not that the people weren’t trying to do a good job under those circumstances; they were. Then all of a sudden the voters changed their minds about who should be administering the province.10 Mr. Speaker pointed out that even for those who resigned, and therefore chose the timing of the end of their political career, the return to private life was still challenging. Resuming a career that has been interrupted for an average of eight years (but quite often longer) is not simple. Re- training, re-certifying or further education can be required. Building or re-building clientele can be challenging. Most MLAs do not have a post-political position waiting for them. It takes time for them to adjust to the unusual change in lifestyle as well. On this subject, Mr. Speaker remarked: As taxpayers—and I say this as a private taxpayer—if the job is done well, then we should 11 compensate these people well and not feel that they should live in poverty or difficulty either when they’re elected to the Legislature or after they have been defeated or decided to quit. Another concern identified by Mr. Speaker with respect to MLA compensation was the fact that currently, the Premier and the Executive Council are paid significantly less than their immediately subordinate staff members. Mr. Speaker recommended that, over time, that gap be shortened or eliminated, that it was irrational in his opinion that the people who are elected to govern and administer the province are paid less than the people who work for them.
9 Ray Speaker, “MLA Compensation and Benefits Review,” Transcript of Public Meeting, Edmonton, January 23rd, 2012, p. MLA-7 10 Speaker, p. MLA-8 11 Speaker, pp. MLA-7-8
2.3 The Highs and Lows of the Position of MLA | 23 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 2.4Fair Compensation
The issue remains of how to properly assess compensation. Determining the appropriate level of remuneration for MLAs is difficult for a number of reasons and is complicated by a number of factors. MLAs are not employees in the formal sense of the word, but rather office- holders who are elected by and held accountable to the public. They are not readily comparable to other occupational groups, either in the private or the public sectors. Much is expected of our elected MLAs. Their responsibilities have been outlined, but how should their contribution be measured? MLAs differ widely in their skills, diligence, qualifications, education and occupational backgrounds, and their experience as legislators varies from one Member to the next. Apart from Cabinet appointments, there are no promotions or opportunities for career advancement for MLAs. In terms of base salary, a newly elected Member is compensated the same as one with 20 years’ experience. Moreover, MLAs differ in their approaches to their responsibilities. While some MLAs might regard their legislative role as their priority, others view their constituency duties above all else; all will allocate their time, effort and resources differently. One of the facts of a representative democracy is that less talented, less conscientious and even incompetent individuals are, on occasion, elected to serve as legislators. Practically speaking, once an MLA is elected, nothing more is required to confirm their legitimacy. Citizens may cast their votes based on the perception of competence, on popularity or on a vote along party lines. It goes without saying that the popular vote does not always result in the most competent or deserving individuals being elected; nonetheless it is the democratic process. The constituents elect them, and in subsequent elections, the constituents continue to judge them. Despite the foregoing, the only equitable means of remunerating MLAs is to treat them as a homogenous group. As different as they may be, compensation must be based on the necessity and obligations of the office and not on the individual. This raises the questions of how can we objectively assess the position, or should we rely on comparators (other provincial MLAs, federal MPs, the judiciary, or university presidents for instance), as diverse as those roles may be? Dr. Herbert Grubel, PhD (Yale), is Professor Emeritus at Simon Fraser University in Vancouver, B.C., following a distinguished teaching career in Economics. His academic career, which has taken him to a number of universities, such as Stanford University and Oxford University, was followed by one term as Member of Parliament in the House of Commons. His numerous publications include “A Professor in Parliament,” a reflection on his role as an MP in Ottawa. Dr. Grubel was retained by the Commission as an ‘expert’ for this review, and his remarkable career in economics and politics M.qualifies him to express his opinion on the question of MLA compensation. Dr. Grubel’s written submission is attached as Appendix I and the transcript of his testimony is included in Appendix
Dr. Grubel stated that two problems complicate the issue of MLA compensation. First: “There is no market that establishes the productivity and correspondingly proper12 level of pay for legislators, as it does for workers in the private sector. Nor are there any objective criteria to select a group of private sector workers to which the pay of MLAs should be linked.” And secondly: “The actual
level12 Herbert of compensation Grubel, “Alberta MLA is difficult Compensation to establish in Perspective because and Recommendations it includes for pensions Changes,” A and Submission fringe to benefits, the Alberta the MLA Compensation Review, January 31st, 2012, p. 1
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13 value of which is different for individual MLAs. This fact complicates making comparisons of the compensation of Alberta’s MLAs with those of other provinces.” Unlike the private sector, where workers’ pay is typically determined by their education, training and previous experience, as well as by their measurable productivity, there is no comparable ‘labour market’ for MLAs that can be used in determining their pay. Moreover, there is no truly suitable reference group of workers in the private sector to which MLAs’ pay can be linked. The remaining method for deciding their pay, according to Dr. Grubel, is to allow the will of the public to indirectly determine the appropriate level of compensation. This process is quite simple. It sees one political party pushing for higher pay but finding its efforts restrained by other parties that push for lower pay. Through the election of parties whose platform best reflects voters’ preferences, the pay of legislators ultimately is determined by the public.14 Dr. Grubel’s theory is that pay levels are generally limited within the constraints of what the public thinks is appropriate, since MLA compensation becomes an election issue when it exceeds (or falls below) what the public deems suitable. This theory also reasons that the quality of legislators is—to some extent at least—“an increasing function of their pay.”15 That is, the competence and productivity of MLAs increase as their salaries increase, which, insofar as this is true, is in the public’s interest as it is conducive to good legislation and good governance. So despite MLA salaries coming out of taxpayer dollars, the pay levels will rarely be so low as to dissuade potential candidates from running. If the levels become excessive in the public’s eye, voters will make their dissatisfaction known through the electoral process. This process, while not exemplified at all times, is manifested “in the longer run and on average.”16 In light of this theory, which “implies that the political process tends to result in levels of compensation for MLAs that reflect the will of the people,”17 Dr. Grubel maintains that the only suitable comparators to be used in setting the pay of Alberta MLAs are the MLAs in other similar Canadian provinces. Dr. Grubel compares the total actual compensation received by Alberta MLAs to that of those in the other provinces. Dr. Grubel’s conclusions can be summarized as follows: in terms of the basic salary paid to MLAs, Alberta’s legislators are the lowest paid. However, when the tax-free allowance, transition allowance and committee pay is added to the basic salary, Alberta is close to or at the top amongst the provinces.18 In light of his analysis, Dr. Grubel recommends bringing the transition allowances paid to Alberta MLAs more in line with other provinces and for the sake of transparency replacing the tax-free allowances with a ‘grossed-up’ fully taxable salary.
13 Grubel, p. 1 14 Grubel, p. 3 15 Grubel, pp. 2-3 16 Grubel, p. 4 17 Grubel, p. 4 18 Grubel, p. 14
2.4 Fair Compensation | 25 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 2.5 The Use of Comparators
My opinion differs from that of Dr. Grubel on the use of other Legislatures as proper comparators for MLA compensation. The provinces and territories vary in size, obligations and cost of living. And while it was suggested in the Mandate that the Commission use other provincial and territorial parliaments as benchmarks for this review, it is evident from a study of other Legislative Assemblies in Canada that circularity occurs when setting compensation for their elected representatives. Historically, it appears that Legislatures since at least Confederation have looked to see what neighbouring jurisdictions provide in terms of remuneration for their legislators and have determined from that what was appropriate or acceptable. For instance, if Province A has increased Members’ salaries by 5 per cent, so should Province B; then, if Province B subsequently increases compensation, it is an invitation to Province A (or other provinces) to match Province B. Over time, the same process is repeated; thus the circularity noted above. While the Canadian provinces and territories each establish the compensation for their elected legislators independently, the actual amounts paid are in relatively close proximity to one another, suggesting that comparisons with other Canadian jurisdictions is the primary source of guidance when setting remuneration levels. I could not find any objective evaluation or independent analysis for MLA compensation for Alberta or other Canadian provinces; most reports of this nature simply refer to other jurisdictions when reviewing and establishing appropriate pay levels for elected legislators. It is my view that this comparative procedure in some respects lacks an objective assessment of what the position of an MLA entails—what an MLA’s duty is to the Assembly and to his or her constituents, and, perhaps most significantly, what an MLA’s contribution is to our continuing democracy. The Mandate also suggested that the Commission consider the compensation paid to Members of the House of Commons of Canada (MPs) and to the legislators of other Commonwealth parliaments. However, for the same reasons as mentioned in the previous paragraphs, there was only limited value in doing so and I have sought a more independent approach. It was further suggested that the Commission consider Alberta Queen’s Bench Judges, whose compensation annually is $281,000 (indexed), and Alberta Provincial Court Judges, whose compensation annually is $260,000 (indexed). I regarded such comparisons as being of little use, since the judges’ remuneration is based on entirely different criteria. In addition to educational requirements, those positions and salaries require a certain number of years of practice as a lawyer and approval by committee review. Moreover, judges are appointed to tenured positions and have mandatory retirement with indexed pensions at age 75 and 70 respectively. Similarly, I did not find it particularly instructive to attempt, as directed in the Mandate, any direct comparison between MLAs and senior public servants in Alberta in the university, municipal, education and health care sectors. Once again, those positions have very specific requirements in terms of education, experience and expertise, and the people in those roles have very different expectations in terms of careers and tenures. University Presidents, for instance, have generally pursued long academic careers before assuming that role. The position entails multiple business and fundraising responsibilities, and compensation with full benefits for Presidents of major Universities in Alberta and Canada ranges from $500,000.00 to over $1 million. It is clearly more akin to a position in the private sector. 26 | 2.5 The Use of Comparators REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Civil servants typically serve in a long-term career spanning 25 to 35 years. They bring and acquire specific knowledge to their position and to the operation of Government. While they carry out Government policy, they do not set it, nor are they held accountable in the same way as those elected to public office. MLAs serve a different function. While varying in skill, they represent the people of Alberta. They are the custodians of our economy, the guardians of our way of life and the embodiment of our democratic institutions. Finally, I have discounted most direct comparisons with the private sector. Typically employment in the private sector requires specific qualifications in terms of education and experience and is subject to performance evaluations based on productivity or other measurable factors. Turning a profit is the ultimate goal of publicly traded companies. And while the Premier can be likened on some level to the CEO of a multi-billion dollar company, and Cabinet Ministers to his or her high- level executives, the parallels do not run deep. And as the CEOs of such companies typically earn several millions of dollars in total compensation annually, they make neither suitable nor realistic comparators for the Province’s Chief Executive. The Province of Alberta is not a publicly traded company, and the responsibilities of MLAs are different from those of private sector workers. An MLA’s contributions to our province cannot readily be measured, and his or her performance is only evaluated on election day and only by the people in his or her constituency. MLAs’ salaries cannot compete with private sector salaries. However, they should not be so low as to dissuade potential candidates from the private sector from entering public life due to an inordinate financial sacrifice.
2.5 The Use of Comparators | 27 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 2.6 Hay Group Report
Hay Group, as previously mentioned, is a global management and human resources consulting firm retained by the Commission for the purposes of this review. They were engaged to perform job evaluations of the basic MLA role and the various other MLA roles (such as Premier, Cabinet Minister, Speaker, Leader of the Official Opposition, etc.), to benchmark these roles and their associated compensation and benefits against certain comparator groups and to submit a report based on their findings. Hay Group’s Report is attached as Appendix J. Hay Group’s methodology involves evaluating and assessing job ‘size’ (or ‘weight’ or ‘importance’) based on a set of criteria found in all jobs. These criteria fall under three general categories: Know-how; Problem Solving; and Accountability. Broadly speaking, ‘Know-how’ considers the knowledge, skills and ability required in a given role, the demands in terms of organizing and integrating knowledge and the communicating and influencing skills required. ‘Problem Solving’ considers the application of knowledge in analyzing and resolving problems and also the nature role.and complexity of the problems faced in the role. ‘Accountability’ measures the decision-making authority of a role, accountability for actions and decisions and the scope of the influence of the
The extensive use of Hay Group’s methodology worldwide and the consistency of its application across roles, organizations, industries and sectors means the firm has amassed a wealth of data that allows them to compare job ‘sizes’ relatively accurately. The use of a points system to score positions allows compensation comparisons to be made between jobs in widely divergent fields or industries that have similar job ‘sizes.’ As part of their process, Hay Group conducted a number of interviews with Alberta MLAs representing a cross-section of roles. They also compared the proposed MLA evaluation with similar evaluations carried out on New Zealand Members of Parliament, as New Zealand’s population and GDP are comparable to Alberta’s. Hay Group assessed the various MLA roles and attached a numerical point value to each role. Using the points system as a guide, they then grouped the MLA roles into five levels or ‘Bands,’ Band 5 comprising the basic MLA role, Band 1 comprising the Office of Premier, and the other Bands comprising the roles that fall in between these two extremes. The MLA roles in each Band were benchmarked against three comparator groups: the Government market, the Broader Public Sector market (public service jobs outside of government), and the Private Sector market (industry). Hay Group submits that using these comparator groups provides a sense of compensation levels across the three sectors and offers a reliable source for assessing th th th the appropriateness of MLA compensation. th th Hay Group presented compensation data by average and quartile to reflect the 25 , 50 and 75
percentiles of the market data, as well as the 10 and 90th percentiles, where available. According to their data, compensation for Band 5—basic MLA—ranks the most competitivelyth of the five Bands.rd In terms of base salary, it is at the 67 percentile compared to the government market, the 53 percentile comparedth to the broader public sector marketth and the 35 percentile compared to the private sector market. Base salaries for comparable government roles typicallyth range from $108,000.00 (at the 10 percentile) to $167,000.00 (at the 90 percentile). Base salaries for comparable roles in the public sector range from $110,000.00 to $173,000.00 (at the 10 and
28 | 2.6 Hay Group Report REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
90th th th percentiles, respectively). Base salaries for comparable roles in the private sector range from
$117,000.00 to $199,000.00 (at the 10 and 90 percentiles,th respectively). Compensation for Band 4—Officialth Opposition House Leader and Committee Chair—ranks close to the median of government organizations, at the 26 percentile compared to the broaderth publicth sector market and below the 10 percentile compared to the private sector market. Base salaries for comparableth governmentth roles range from $116,000.00 to $178,000.00 (at the 10 and 90 percentiles, respectively), and for comparable public sector roles, from $132,000.00 to $219,000.00
(at the 10 and 90 percentiles, respectively).th Compensation for Band 3—Leader of ath Recognized Opposition Party and Deputy Speaker/Chair of Committees—ranks below the 10 percentile of both the broader public sector andth the privateth sector markets, but ranks near the 20 percentile of the government market. Base salaries for comparableth governmentth roles range from $148,000.00 to $216,000.00 (at the 10 and 90 percentiles, respectively), for comparableth publicth sector roles, from $169,000.00 to $310,000.00 (at the 10 and 90 percentiles, respectively), and for comparable private sector roles, from
$216,000.00 to $389,000.00 (at theth 10 and 90 percentiles, respectively). Compensation for Band 2—Minister with Portfolio, Speaker and Leader of the Official Opposition—ranks below the 10 percentile of both the broader public sector and the private sector marketsth (thereth are no comparable jobs in government organizations in the Hay Group database). Base salaries for comparableth public thsector roles range from $234,000.00 to $439,000.00 (at the 10 and 90 percentiles, respectively), and for comparable private sector roles, from
$329,000.00 to $575,000.00th (at the 10 and 90 percentiles, respectively). Compensation for Band 1—the Office of Premier—ranks the least competitively of the five Bands. It ranks well below the 10 percentile when compared to the private sector comparator group (there are no comparable jobs to that of Premier in governmentth organizationsth or the broader public sector in the Hay Group database). Base salaries for comparable private sector roles typically range from $709,00.00 to $1,169,000.00 (at the 10 and 90 percentiles, respectively). These values do not include bonuses or severance payments, many of which are substantial in the private sector. With respect to the low total remuneration positioning of the MLA roles in Bands 1 and 2, Hay Group observed that this is due, in large part, to the fact that MLAs are not entitled to cash incentives of any kind. Short-term, mid-term and long-term incentives are prevalent in the private sector, and short-term incentives are common in the broader public sector. What is more, MLAs receive minimal to no perquisites, while these are customary at senior levels in private organizations. Hay Group further noted that the present transition allowance is excessive when compared to those offered to legislators in other Canadian jurisdictions and even within the private sector.
2.6 Hay Group Report | 29 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 2.7 Aon Hewitt Report
Since 1993, Alberta MLAs have not been provided with any form of pension, with the exception of the annual RRSP allowance payments discussed in Section 2.1 above and, in some respects, the present transition allowance. As directed in the Mandate, the Commission was to consider the option of implementing a pension plan for Members. To this end, as previously mentioned, the Commission retained the services of Aon Hewitt to comment on options for providing MLAs with a retirement plan and to provide actuarial evidence on the cost of various pension arrangements. Aon Hewitt submitted a report to the Commission, which is attached as Appendix K. The following is a summary of the Aon Hewitt Report. The primary consideration with respect to any registered pension plan is determining whether a defined benefit plan or a defined contribution plan is more appropriate under the circumstances. In a defined benefit plan, the pension income received at retirement is predetermined and is based on a formula involving years of service and earnings. Contributions to a defined benefit plan fund are typically made by both the employer and the employee, and the pooled assets are invested and managed by a professional asset manager on the behalf of the employees. In a defined benefit plan, the employer is responsible for all pension liabilities and therefore shoulders the risk if the fund does not cover the entirety of the retirement incomes. In a defined contribution pension plan, the income received at retirement is not predetermined, but the contributions made by both the employer and employee are fixed. Contributions are deposited into a fund in the employee’s name and are invested and managed by the employee or on an employee group basis. The income received at retirement is based on the contributions made over the years and the investment income generated on those contributions and continues only until there are no more funds in the employee’s account. In a defined contribution plan, the employee shoulders the investment and interest rate risk, and retirement income will vary according to market fluctuations during their career and at the time of retirement. In recent years, defined contribution plans have become more common in the private sector, and the sustainability of defined benefit plans in the public sector has been questioned. This is due, in part, to increased life expectancies among Canadians, recent market volatility and lower interest rates, all of which make defined benefit plans more costly to employers. Companies and governments are now more frequently facing funding deficits in covering pension liabilities. As a result, many defined benefit plans in the public sector are being redesigned to offset some of the costs and risks to employers. Changes to these plans include increased retirement ages, less generous benefits, increased employee contribution rates and greater risk sharing between employers and employees. It is worth noting that most Canadian jurisdictions provide their legislators with defined benefit pension plans. Two provinces that switched to defined contribution plans have since reverted to defined benefit plans. Saskatchewan and Ontario are the only provinces that provide defined contribution pension plans. Pensionable earnings for a registered defined benefit plan are limited to an employee’s taxable income only. Thus, in the case of Alberta, the tax-free allowance would not be considered pensionable earnings. The tax-free portion of MLAs’ salaries, if applicable, would only yield
30 | 2.7 Aon Hewitt Report REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
pension benefits under a supplementary pension plan. A vesting period of at least five years is recommended by Aon Hewitt for an MLA defined benefit plan to ensure that only Members who serve more than one term are eligible to receive a pension. Shorter vesting periods are more costly as a greater number of Members receive the pension and there are added administrative costs. Members of the Legislative Assembly Pension Plan Act There are two options with respectIncome to registering Tax Act (Canada) a pension plan for Alberta MLAs. The , in which membership was suspended in 1993, is still in force and registered under the . Therefore, the Act can be amendedIncome to Taxreflect Act the (Canada) newly designed plan and, the amendments can be filed with Canada Revenue Agency. Otherwise, a new Act is required, and application for registration and compliance with the is necessary before it can take effect. Defined benefit plans are typically designed based on either final-average or career-average earnings. The latter usually provide lower, more predictable costs to employers than the former. They also tend to be more sustainable. In the case of MLAs, a best average earnings formula is sometimes used to ensure the inclusion of Executive service (such as a Cabinet position) in the pension calculation, regardless of when such service occurred in a Member’s career. A career average formula also considers Executive service, since each year of earnings is treated separately. According to the Aon Hewitt Report, “defined benefit plans are much more efficient vehicles for providing retirement income due to the fact that financial risks are pooled across all beneficiaries of the plan rather than being borne by each member individually.”19 Acknowledging that defined benefit plans are coming under pressure due to increased costs and questionable sustainability, the Report offers a number of ‘tools’ for organizations to mitigate risks and keep costs sustainable. These tools include plan design, investment policy, funding policy and actuarial assumptions. For a full discussion, see Aon Hewitt’s Report attached as Appendix K. The Aon Hewitt Report further provided cost and benefit comparisons for various retirement plan designs for the Commission’s consideration.
19 Aon Hewitt Report, p. 4.
2.7 Aon Hewitt Report | 31 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Section 3: Conclusions and Recommendations
32 | Section 3: Conclusions and Recommendations REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.1Base Salary
As noted in Section 1.4 of the Introduction, a primary concern highlighted at the public hearings and in the written submissions is the present difficulty in determining the total actual remuneration paid to MLAs, Cabinet Ministers and the Premier. Another is the current pay structure for committee work, particularly that MLAs are compensated for sitting on committees that rarely meet, or do not meet at all. Members frequently serve on numerous committees at once, but they are restricted to receiving compensation for three committees, up to a maximum of $3,500.00 per month. Thus it is not necessarily the case that an MLA is remunerated for serving on an inactive committee. Nevertheless, most testimonies and written submissions from members of the public argued that committee work is a duty accompanying the office of MLA and should not be separately compensated. All of the MLAs interviewed by Hay Group as part of their analysis likewise felt that committee work was a core responsibility of their role as Members. I agree that a more legitimate and transparent approach is necessary; that is, that MLAs be paid a single amount as a base salary that includes legislative and constituency duties as well as all committee services. However, since the chairs of committees have the additional responsibilities of running and organizing the committees, I recommend that an appropriate stipend be paid to the chairs of committees (or presiding Member, as the case may be). Compensation for MLAs should be generous enough to attract suitably talented and capable individuals from all sectors, yet not so generous as to be the primary motivator for prospective members. Experience has shown that to attract the best people seeking office is to appeal to those primarily motivated by a desire to serve. For some, pursuing politics as a career will involve a financial sacrifice—MLAs’ salaries cannot compete with those offered in the private sector. However, compensation should be crafted so as not to deter desirable candidates from serving due to unreasonable monetary sacrifices. Compensation should also be commensurate with the duties, responsibilities and importance of the role. The unique position of MLA and the challenges associated with attaching a salary to that position have already been explored at some length in this Report. It is sufficient to say MLAs are critical to upholding our democracy. Collectively, they form the legislative institution that represents and expresses the will of the people. They establish and maintain the quality of life of Albertans in many ways; they are charged with setting public policy and spending public funds responsibly. If members of the public take issue with the performance of their legislators or their Government, they can vote them out. The opportunity is open to all Alberta residents 18 and over to stand for election. The Legislature is not a closed shop. The specific recommendation for the MLA base salary was reached after considering all of the evidence, including the Hay Group Report. As noted in the summary of Hay Group’s findings (Section 2.6 of this Report), the present MLA salary, including indemnity, tax-free allowance and average committee pay, is competitively placed in both the government and broader public sector markets. And while it is recommended that the payth structure be changed to include committee pay in the base salary, I believe that the compensationth should not vary greatly from its present level. I market.recommend that it remain roughly around the 50 percentile with respect to both the government and public sector markets, and around the 25 percentile with respect to the private sector
3.1 Base Salary | 33 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Recommendation 1: All MLAs should receive an indemnity of $134,000.00 as compensation for their legislative, constituency and committee duties. They should not be separately compensated for serving on any Assembly or Government committees.
Recommendation 2: Given the added responsibilities involved in chairing committees, a stipend should be paid to the chairs of committees. Standard procedure for providing chairs with additional remuneration is to compensate them on a per-meeting basis; therefore, a $200.00 per-meeting stipend should be paid to the chair (or presiding Member) of any Assembly or Government committee.
34 | 3.1 Base Salary REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.2 Offices Other Than MLA
The Mandate directed the Commission to make recommendations regarding additional compensation for offices other than basic MLA. All of the offices mentioned in the Mandate are dealtSpeaker, with Minister below: with Portfolio, Leader of the Official Opposition: Historically, these three threeroles haveroles. been compensated equally, and there is no reason to suggest that this should be otherwise. Therefore, it is recommended that compensation for these offices should apply to all
According to Hay Group’s evidence, these roles are not compensated competitively when compared to the broader public sector and private sector markets. This is due, in part, to the fact that short- term, mid-term and long-term cash incentives are not available to MLAs in these roles. Hay Group could not find any comparable roles in government organizations. Theses roles equated, in Hay Group’s analysis, to chief financial officers and CEOs of moderate-sized organizations, whose private sector compensation is an unrealistic target for these particular public sector positions. The preferable approach to setting compensation for the Speaker, Cabinet Ministers and the Leader of the Official Opposition is to relate their roles to the basic MLA role, the compensation for which has already been addressed. As these roles involve considerable added responsibilities and typically a higher profile and level of accountability, it is recommended that these offices receive an additional compensation equal to 50 per cent of the basic MLA indemnity. In actual amounts, this recommendation represents very little change from the present levels.\ Recommendation 3: The Speaker, Ministers with Portfolio and the Leader of the Official Opposition should receive additional compensation of $67,000.00 as remuneration for the added responsibilities of their respective roles, for a total cash compensation of $201,000.00.
Premier:
As discussed in Section 2.6 above, Hay Group’s evidence demonstrated that the Office of Premier is the least competitively compensated of any of the MLA roles they explored in their report. And the fact that Hay Group could not find any comparable government or public sector roles in their extensive database to compare to the position of Premier is telling. In reality, there are very few roles that are as demanding as that of Premier, or that are accompanied with such a high level of responsibility and accountability. Only the most senior positions in the private sector compared to the Office of Premier in Hay Group’s analysis. In effect, the Premier is the face and voice of Alberta, is responsible for a budget of nearly $40 billion, is answerable to all of the citizens of the province, and is Alberta’s representative on the national and global stage. The institution of the Office of Premier attracts the most attention as the most prominent public office in the province. The compensation should reflect that office. One could expect the Premier to be the highest paid public servant in the province, given the importance and demands of the role. At present, the Chief Justices of the Alberta Superior Courts level.are paid $315,900.00 annually (as of April 2012). The Premier’s remuneration should not be less than this. Yet even the Premier’s public sector subordinates are presently remunerated at a higher 3.2 Offices Other Than MLA | 35 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
The Premier’s compensation is inadequate and not commensurate with the duties, obligations and responsibilities of the office. The Premier should be remunerated to reflect the difference in the level of responsibility between the Premier and his or her immediate subordinates. The Premier’s salary should be higher than that of his or her deputy, and also the gap in remuneration between the Premier and the Cabinet Ministers should be widened. While managing a Portfolio is a notable responsibility in addition to regular MLA duties, it is not as significant as that of the Premier for the whole province. The Premier’s compensation should be increased, and while there may be reasons for doing this gradually, it is recommended that it be accomplished within three years, since it is further recommended (in Section 3.8 below) that MLA compensation be reviewed every four years by an independent committee. The Premier should receive additional compensation equal to 100 per cent of the basic MLA indemnity, effective immediately, and two subsequent increases should be made to the Premier’s salary for an ultimate additional compensation equal to 150 per cent of the basic MLA indemnity. While the Premier’s duties are more than double those of the private Members, these increases will compensate the Premier in a way that more appropriately reflects the office. Recommendation 4: The Premier should receive additional compensation of $134,000.00, effective immediately, for a total cash compensation of $268,000.00. In one year’s time, the Premier should receive an additional $33,500.00 for a total cash compensation of $301,500.00, and in two years’ time, an additional compensation of $33,500.00 for a total cash compensation of $335,000.00. This would bring the Premier’s compensation more in line with Alberta’s highest paid public servants and more commensurate with overall duties, responsibilities and accountability.
Minister without Portfolio:
Presently, there are no Ministers without Portfolio in Alberta. However, should those circumstances change and an MLA be appointed Minister without Portfolio, the following comments and recommendation should apply. Historically, compensation for this position has been roughly less than half of that for a Minister with Portfolio. I regard this as reasonable. Thus, given that the compensation for a Minister with Portfolio is recommended to be $67,000.00, the compensation for a Minister without Portfolio should be equal to 45 per cent of that value. Recommendation 5: A Minister without Portfolio should receive additional compensation of $30,150.00 as remuneration for the added responsibilities of that role, for a total cash compensation of $164,150.00.
Deputy Speaker/Chair of Committees:
Historically, the compensation for this position has been half of that of the Speaker. I also regard this as reasonable. Thus, given that the compensation for Speaker is recommended to be $67,000.00, the compensation for Deputy Speaker should be equal to 50 per cent of that value. 36 | 3.2 Offices Other Than MLA REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Recommendation 6: The Deputy Speaker/Chair of Committees should receive additional compensation of $33,500.00 as remuneration for the added responsibilities of that role, for a total cash compensation of $167,500.00.
Leader of a Recognized Opposition Party:
Historically, the compensation for this position has been roughly less than half of that of the Leader of the Official Opposition. I regard this as reasonable. Thus, given that the compensation for the Leader of the Official Opposition is recommended to be $67,000.00, the compensation for a Leader of a Recognized Opposition Party should be equal to 45 per cent of that value. Recommendation 7: The Leaders of Recognized Opposition Parties should receive additional compensation of $30,150.00 as remuneration for the added responsibilities of that role, for a total cash compensation of $164,150.00.
Deputy Chair of Committees:
Historically, the compensation for this position has been half of that of the Deputy Speaker/Chair of Committees. (This is not to be confused with committee pay.) I regard this as reasonable. Thus, given that the compensation for Deputy Speaker is recommended to be $33,500.00, the compensation for the Deputy Chair of Committees should be equal to 50 per cent of that value. Recommendation 8: The Deputy Chair of Committees should receive additional compensation of $16,750.00 as remuneration for the added responsibilities of that role, for a total cash compensation of $150,750.00.
Special Members’ Compensation:
Regarding compensation for MLAs in the various Special Members’ roles listed in the Mandate (identified in Recommendation 9, below), in general terms, I recommend that these could remain more or less as they are presently. However, in keeping with the formula used to determine the additional compensation for the offices dealt with in previous recommendations, I recommend that the compensation for each role be calculated as a percentage of the compensation for a Cabinet Minister (which is recommended to be $67,000.00). My specific recommendations are as follows: Recommendation 9: Additional compensation for the various Special Members’ roles, as remuneration for the added responsibilities of those positions, should be as listed below. In parentheses is the recommended compensation expressed as a percentage of that of a Minister with Portfolio.
3.2 Offices Other Than MLA | 37 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Official Opposition House Leader: $16,750.00 (25 per cent) Third Party House Leader: $13,400.00 (20 per cent) Chief Government Whip: $13,400.00 (20 per cent) Assistant Government Whip: $10,050.00 (15 per cent) Chief Opposition Whip: $10,050.00 (15 per cent) Assistant Opposition Whip: $8,040.00 (12 per cent) Third Party Whip: $8,040.00 (12 per cent) A summary of the recommendations regarding the various MLA roles is represented in the followingBase Indemnity tables: Annual Remuneration MLA Offices Other than MLA – Additional Annual Remuneration $134,000.00 Compensation
Premier $134,000.00 Speaker $67,000.00 Minister with Portfolio $67,000.00 Leader of the Official Opposition $67,000.00 Minister without Portfolio $30,150.00 Deputy Speaker/Chair of Committees $33,500.00 Leader of a Recognized Opposition Party $30,150.00 Special Members – Additional Compensation Annual Remuneration Deputy Chair of Committees $16,750.00
Official Opposition House Leader $16,750.00 Third Party House Leader $13,400.00 Chief Government Whip $13,400.00 Assistant Government Whip $10,050.00 Chief Opposition Whip $10,050.00 Assistant Opposition Whip $8,040.00 Third Party Whip $8,040.00 There were a number of government roles for which there was little information available as to their duties and responsibilities (Parliamentary Assistants, Secretariat Chairs) and on which no recommendations were made in this report. However, in order to maintain consistency in the proposed approach to salary determination, these salaries should be set by Cabinet as percentages of the MLA salary when the nature and scope of these roles can be more fully determined.
38 | 3.2 Offices Other Than MLA REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.3Tax-Free Allowance
At the public hearings, in the written submissions and in the media, there was considerable criticism of the tax-free portion of the MLA salary, which is $26,046.00 annually. It can be appreciated why this particular aspectth of MLA remuneration is the subject of widespread disapproval,The Income Tax yet ActI believe (Canada) that is because it is the least understood. , RSC 1985, c 1 (5 Supp), s 81(2) states: Where an elected member of a provincial legislative assembly has, under an Act of the provincial legislature, been paid an allowance in a taxation year for expenses incident to the discharge of the member’s duties in that capacity, the allowance shall not be included in computing the member’s income for the year unless it exceeds ½ of the maximum fixed amount provided by law as payable to the member by way of salary, indemnity and other remuneration as a member in respect of attendance at a session of the legislature, in which event there shall be included in computing the member’s income for the year only the amount by which the allowance exceeds ½ of that maximum fixed amount. (Underlining added.) As noted in Section 2.1 above, Ms. Scarlett testified that this tax-free allowance is a benefit provided to all provincial legislators by the federal Government. It is a provision paid for in forgone taxes by the Government of Canada. Alberta as a province has, to date, elected to recognize this exemption and, in doing so, saves the province paying extra taxes to the federal government. If the province ignored the exemption, MLAs’ salaries would need to be increased or ‘grossed up’20 to permit them to retain their present compensation after paying this income tax. The effect of each MLA’s present salary being ‘grossed up’ by approximately $12,570.00 (if their net base salary was to remain the same) would cost taxpayers approximately $1.04 million, all of which would go to the federal Government in the form of income taxes. Thus, its elimination would be tantamount to a decision to send more than one million dollars directly to Revenue Canada, for which Albertans would receive nothing. I assume the lack of support for this federal tax benefit is, at least in part, the result of the general public not knowing the source of it or who would bear the cost if it were discontinued. If the rationale for retaining it was better understood, it might be more widely favoured. In spite of the financial penalty to Albertans, there was marked support for the elimination of the tax-free allowance by several presenters, both expert and private. In particular, the Honourable Ray Speaker, Dr. Herbert Grubel, Dr. David Docherty, and Mr. Scott Hennig of the Canadian Taxpayers Association all advocate following the lead of most provinces and eliminating the tax-free allowance, replacing it with a fully taxable salary. While these witnesses understood the financial ramifications of doing so, they generally felt that the importance of transparency outweighed the economic benefits of the federal tax exemption. Those opposing the tax-free allowance also pointed to the fact that only the provinces of Alberta and Quebec, Yukon Territory and the Northwest Territories avail themselves of this Federal Government incentive. The other provinces have elected to discontinue the federal exemption and have accordingly ‘grossed up’ MLAs’ salaries—with no explanation found other than that of transparency and the public’s perception of inequity. If the tax-free allowance is to be discontinued, it is more appropriate that it be done by the Federal Government20 For an explanation who initiatedof this term asit, used who in thestill context authorize of this Report, it, and see Sectionwho alone 2.1. have income tax jurisdiction.
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Its original purpose may be unknown or outdated, but so long as it remains available, I see considerable economic value in maintaining it. Doing away with it in the name of transparency or to assuage the public who perceive it as inequitable, as other provinces have done, is not, in my view, a compelling enough reason for following that lead, especially given the cost to Albertans. It is in the interest of all taxpayers of this Province that the tax-free allowance be kept but with an explanation of what it is and why it is an obvious financial advantage to the Province. It appears logical, as already stated, that if the exemption is to be discontinued, it should be by the federal Assemblylegislators of that Alberta. created it. Nonetheless, while I recommend against eliminating the tax-free allowance, I recognize that this decision ultimately remains at the discretion of the Legislative
In Section 3.1 above, a basic MLA indemnity of $134,000.00 is recommended. However, if the tax- free allowance is retained as a cost savings to Albertans,Income the MLATax Act indemnity should be broken down as follows: a taxable indemnity of $75,000.00 and a tax-free allowance of $37,500.00 (50 per cent of indemnity, as per Section 81 of the federal ), for a total base salary of $112,500.00. Thus formulated, this base salary would have a ‘grossed-up’ value of $134,000.00, but would yield the same net income to the Member. Any financial benefit received from retaining the tax-free allowance is on the part of the taxpayers and not the MLAs. Apart from the basic MLA indemnity, compensation for the other roles would not be affected by the decision regarding the tax-free allowance. If this recommendation is adopted and the MLA salary is implemented as $112,500.00, including a tax-free allowance of $37,500.00, instead of a fully taxed amount of $134,000.00, it would result in an overall savings to the annual budget of Alberta of about $1,870,000.00. Recommendation 10: The basic MLA salary should be formulated as follows: an indemnity of $75,000.00 and a tax- free allowance of $37,500.00 for a total base salary of $112,500.00. While this salary would have a ‘grossed-up’ value of $134,000.00, it would save the province approximately $1.87 million.
40 | 3.3 Tax-Free Allowance REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.4Transition Allowance
The average tenure for an Alberta MLA is two terms—or eight years. Some serve longer and others less, but regardless of the duration of an MLA’s career, the return to private life upon leaving office generally poses difficulties. As was explored in Section 2.3 above, these challenges can take many forms. For some, a defeat at the polls is a psychological blow that—at the very least—requires a recovery period, but in extreme cases leads to more serious psychological issues, such as depression. Even when the departure from office is voluntary, former Members often need to meet increased standards for re-entry into the work force. For those returning to professions, they may have to re-qualify in some manner. Some simply depart public office at an age that makes re-employment challenging. For still others, they are burdened by a surprising stigma of having been an MLA; this is particularly the case when there has been a change in Government or when certain Government policies have been unpopular within particular industries. As a result, finding suitable employment can be difficult. The Honourable Ray Speaker, as previously noted, testified to the disadvantages facing exiting MLAs, whether their departure from office was voluntary or not. His view was supported by former Speaker of the Legislative Assembly of Alberta Dr. David Carter, as well as by a number of the written submissions received by the Commission. The exceptions to this situation are successful Premiers and prominent Cabinet Ministers whose notable careers in government have opened up opportunities for them in the marketplace. But these cases tend to be the exceptions only and typically do not occur, particularly when an MLA’s departure coincides with a change in the governing party. Presently, MLAs accrue a transition allowance of three months’ pay for every year served in office, based on the Member’s best three years in office, with no limit placed on the total amount accrued. Simple arithmetic illustrates that a long-serving MLA is provided, upon departure from office, with a substantial lump sum payment in an amount that—while taxable—exceeds the intended limit.purpose of the allowance. A transition allowance should provide short-term assistance to former Members in re-entering private life; it should not take the place of a pension or be funded without
There is sufficient evidence to support the need for some transition allowance for MLAs to assist them in re-entering private life. MLAs have, after all, served the public in a role without job security, and, as we’ve seen, their return to their former occupations or lifestyles is often fraught with difficulties. However, there is also a compelling case to be made for identifying the present transition allowance as unjustified and excessive. Therefore, I recommend a more reasonable and justifiable transition allowance of two months’ salary for every year served to a maximum of 12 months. This is a formula seen frequently in the private sector in some of the other provincial jurisdictions and would require an MLA to serve at least six years to reach the maximum accruable allowance. It should be based on the MLA salary only and not on additional compensation provided for other roles. Most importantly, it recognizes a limit and more appropriately fulfills its intended purpose. A transition allowance should not be disguised to compensate for the suspension of the MLA Pension Plan in 1993. It is intended to assist exiting Members in re-entering private life after
3.4 Transition Allowance | 41 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
th serving the province. Amounts of the present transition allowance accrued to date and presently owing to former and serving Members to the end of the 27 Legislature should be protected and must be paid to them on leaving the Assembly. Recommendation 11: The present transition allowance should be discontinued and a new transition allowance of two months’ basic MLA salary for every year served to a maximum of 12 months should be implemented. Thus formulated, the transition allowance would not recognize additional compensation received for roles other than MLA and would accrue equally for all Members.
42 | 3.4 Transition Allowance REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.5Pension
My review as to whether a pension plan should be reinstituted for Members of the Legislative Assembly was informed both by the information and analysis provided by Aon Hewitt,21 as the actuarial firm retained by the Commission, and the extensive work that has been done in the United Kingdom in the review22 of public sector pension plans (the Lord Hutton Report, 2011) well as pension benefits provided to Members of the House of Commons and House of Lords (the Cockburn Report, 2010). The Members of the Legislative Assembly Pension Plan in which membership was suspended in 1993 was a best three-year average earnings defined benefit plan that provided a benefitMembers which ofAon the Hewitt Legislative estimated Assembly to have Pension a value Plan of Act 47.8 per cent of salary and was similar to defined benefit plans in place in the majority of Legislatures and in the Parliament of Canada today. The provides the structure under which pensions to retired MLAs are being paid but has allowed no new enrollment since 1993. In considering a pension for Alberta MLAs, it must again be noted that the average length of service for Members is just over eight years—or approximately two terms. Thus for the majority of Members a political role is either a mid-career or late career occupation and rarely close to a lifetime career. It also interrupts an MLA’s private career, which means MLAs frequently sacrifice the pension accrual that they would have earned during those otherwise pensionable years in another occupation. Given this, it would seem to follow that any pension plan in these circumstances should provide a reasonable and predictable benefit but should be cognizant of the emerging trends in pension benefit practices for this type of employment circumstance. One of the key considerations in re-implementing a pension plan for MLAs is the decision whether23 it should be a defined contribution or defined benefit plan. A more detailed analysis of the advantages and disadvantages of the two basic pension designs is presented in the Cockburn Report. As noted in this Report, a study from the United States’ National Institute on Retirement Security found that “a defined benefit (DB) pension can deliver the same retirement income at 46 per cent lower cost than an individual defined contribution (DC) account.”24 The Cockburn Report concluded that defined benefit plans appear to encourage people to contribute more to their own pensions, as the average employee contribution to a defined benefit plan is higher than to a defined contribution plan, even within the private sector. Based on the evidence reviewed, given the relatively short-term careers of the average MLA and the objective of providing a fair, reasonable and predictable pension for that service while remaining affordable and sustainable, a defined benefit plan is the optimal approach. However, instead of a final average earnings defined benefit plan in which the employer bears all of the salary, investment and post-retirement longevity risk, a Career Average Revalued Earnings plan with price indexing (CARE-P), which better balances the risk between the Member and the Legislative Assembly, is recommended. In a CARE-P plan, each year the member earns an amount of pension based on the plan’s accrual rate and their salary in that particular year. This amount is 21then Lord revalued Hutton of Furness, annually—that Independent Public is, Serviceindexed Pensions based Commission: on changes Final Report in, Marcha consumer 2011, available price at: http://cdn.hm-index (CPI). At treasury.gov.uk/hutton_final_100311.pdf 22 Bill Cockburn, Review of the Parliamentary Contributory Pension Fund, July 2010, available at: http://www.official-documents.gov. uk/document/cm79/7926/7926.pdf 23 Cockburn, pp. 11-13 24 Cockburn, p. 12
3.5 Pension | 43 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
retirement each year’s accrual is summed up to the total pension. The new retirement plan, if adopted, should be implemented on a go-forward basis only, with no recognition of past service. The specific recommendations for the provisions of an MLA Pension Plan are: Average Earnings Formula Career Average Revalued Earnings–CARE Accrual Rate 2.5% Vesting 5 years Normal Retirement Age 65 Maximum Service 30 years Member Contributions 11% of pensionable earnings Assembly Contributions Balance of Cost–estimated at 20.3% Indexing of pre-retirement pensions 100% of Alberta CPI (CARE-P) Indexing of Post Retirement Pension 60% of Alberta CPI Surviving Partner Pension Joint and 2/3 survivor Early Pension Reduction 3% per year Earnings Definition Each year of earnings treated separately The Aon Hewitt Report (Appendix K) outlines the cost estimates for a CARE-P plan with these provisions. In terms of the rationale for the specific provisions, the following observations are Accrualsignificant. Rate:
An accrual rate of 2.5 per cent is recommended in recognition of the short-term nature of the typical MLA career and the lack of perquisites available to Members in comparison to the broader Normalpublic sector Retirement and private Age: sector. This level of accrual is less than most other MLA plans in Canada.
Given the increased longevity risk for this type of plan due to the fact that Canadians are living longer, age 65 is a more reasonable age at which a Member should start receiving an unreduced Vesting:pension. This is a higher age than most MLA plans in place in Canada.
As earlier noted, shorter vesting periods are generally more costly for a plan and it seems reasonable that MLAs serve at least five years before becoming vested in the plan, which is similar Memberto most MLA and plans Assembly in Canada. Contributions:
The recommended distribution of contributions (approximately 1/3 Member, 2/3 Assembly) parallels that of the Alberta Management Employees Pension Plan presently in place. It seems
44 | 3.5 Pension REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
reasonable that similar costing be applied to Members of the Assembly as is applied to managers in the Alberta Public Service. This distribution is significantly more balanced that most MLA defined Indexing:benefit plans in Canada.
The primary characteristic of a CARE-P defined benefit plan is the indexation of annual pension amounts by some type of price index as opposed to a wage index. In that regard, indexing of pre-retirement pension amounts should be 100 per cent of the Alberta CPI and indexing of post- retirement benefits should be reduced to 60 per cent of Alberta CPI, the same indexing formula that is applied to retired managers receiving a pension under the Management Employees Pension Plan. By comparison, the pensions of Alberta Provincial Court Judges are indexed at 100 per cent of OAlbertather P CPI.rovisions:
The recommended surviving partner and early retirement reduction provisions are typical for Funding:defined benefit plans.
A revised MLA Pension Plan should be fully funded for future service on an ongoing basis with contribution levels, accrual rateIncome and Tax indexing Act provisions subject to review and adjustment dependent on the financial position of the plan. An actuarial review of the plan is required once every three years under the rules. This actuarial review would inform the periodic Implementationreview of MLA compensation and Administration: recommended elsewhere in this report.
Members of the Legislative Assembly PensionIn terms Plan of the Act implementation of a revised MLA Pension Plan, Aon Hewitt noted that this can be most easily accomplished through amendments to the now in place. With the implementation of a revised MLA Pension Plan, the existing transition allowance can be amended to reflect the earlier recommendation in this Report (see Section 3.4, Recommendation 11). The administration of the plan can be managed in a manner similar to other Alberta public sector plans. Governance of the Plan should be under the Members of the Legislative Assembly Pension Plan Board established under the present Act. As with many other public sector retirement plans, Members should have the one-time option to join the MLA pension plan. In electing not to participate, those Members who do not contribute to the plan do not benefit in any way from the plan. In part 9 of the Mandate, the Commission was asked to consider the impact of some Members’ ‘double dipping’ in more than one pension plan. There was no evidence to suggest that this was a particular problem with respect to Alberta MLAs. Individuals who are retired from other occupations and are already receiving pensions are nonetheless free to run for public office and should not be discouraged from doing so. Many people have a second career in their retirement; contributing to and collecting a second pension is not unique to MLAs and is not what I consider to be ‘double dipping.’ I therefore make no recommendation with respect to this issue.
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Recommendation 12: A pension plan should be re-implemented for MLAs on a going forward basis, with no recognition of past service. The specific recommendations for the plan are included in Section 3.5 of this Report. The Members of the Legislative Assembly Pension Plan Act should be amended to reflect the new plan design. It follows that the RRSP allowance payments presently made to MLAs be discontinued if a pension plan is re-implemented.
46 | 3.5 Pension REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.6Other Benefits
There is no evidence to suggest the need to revise the health, life insurance and disability benefits provided to MLAs. Therefore, it is recommended that these remain unchanged. Recommendation 13: The health, life insurance and disability benefits presently provided to MLAs should be maintained.
3.6 Other Benefits | 47 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.7 Indexing
In accordance with the Mandate that directs the Commission to make recommendations on the process for future adjustments to MLA compensation, it is suggested that to the extent that some or all of the aforementioned recommendations are implemented—even if implemented in stages—MLA compensation should be indexed annually following the Alberta Consumer Price Index (CPI), using the same index as other Alberta public service pension plans. Recommendation 14: With respect to future adjustments to MLA compensation, salaries should be adjusted annually in accordance with the Alberta Consumer Price Index (CPI).
48 | 3.7 Indexing REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.8 Future Review
The Mandate further directed that the Commission make a recommendation on the process for future review of Members’ compensation, benefits and allowances. As a general rule, MLAs should not set their own pay. To that end, it is recommended that every four years the Chief Justice of the Queen’s Bench of Alberta (or his or her designate from the court) be appointed chair of a three-person committee to review MLA compensation—the twoConstitution other members Act, 1867 of the committee to be judges of that same court. The Queen’s Bench of Alberta, the superior trial court of the Province, is a federally appointed court (under section 96 of the ) and is compensated by the Federal Government. That court is therefore independent from the Government of Alberta, and as its members reside in various judicial districts throughout Alberta, it offers a province-wide perspective on the assignment. Recommendation 15: Every four years the Chief Justice of the Queen’s Bench of Alberta (or his or her designate) should be appointed chair of a committee of three members to review MLA compensation. The two other members of the committee should be judges of the same court.
3.8 Future Review | 49 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3.9 Implications of Recommendations
In arriving at and making the recommendations contained in this Report, I considered, among many other things, the implications of the recommendations, financial and otherwise. I wish to highlight and comment on some of these. As previously noted, it was the aim of the Commission to come to conclusions using as independent an approach as possible. A point was made of not relying exclusively on what other jurisdictions were doing (or had done) in terms of compensating their legislators in order to avoid the circularity that has heretofore occurred in setting MLAs’ salaries. Nevertheless, it is recognized that the MLAs and the public will want to see how the proposed Alberta salaries and pension compare to those in the other Canadian jurisdictions. Therefore, several charts are attached for reference in this regard. Appendix N compares the total compensation for Members in all Canadian provinces and territories and in the House of Commons, including the proposed fully taxable Alberta salary of $134,000.00. Appendix O compares the total compensation for the same groups, but uses the proposed partly tax-exempt Alberta salary of $112,500.00 ($75,000.00 indemnity and $37,500.00 intax-free the overall allowance). totals. These charts are intended to reflect the total compensation received, not just cash compensation. Thus the values of the pension arrangements in each jurisdiction are included
Of particular interest is a comparison between Appendix E and either Appendix N or Appendix O. This comparison shows the total compensation comparisons for Members in all jurisdictions, but with respect to Alberta, it shows the total compensation before this review was initiated (Appendix E) and ‘after’—that is, with the recommended Alberta salary and pension (either Appendix N or Appendix O, depending on the decision regarding the tax-free allowance). From Appendix E, it can be seen that the present total annual compensation for Alberta MLAs is $176,989.00 (‘grossed up’), if the current transition allowance is added in lieu of a pension contribution. From Appendices N and O, it can be seen that the proposed total annual compensation for Alberta MLAs is estimated at either $161,202.00 (fully taxable) or $159,313.00 (‘grossed up’ partly tax-exempt salary). Thus the implementation of the recommendations contained in this Report would result in a decrease in total compensation principally as a result of changes in the transition allowance and the elimination of the RRSP allowance. Appendix P compares the total compensation for Cabinet Ministers in all Canadian provinces and territories and in the House of Commons using the present Alberta Cabinet salary—that is, before this review was initiated. Appendix Q compares the total compensation for Cabinet Ministers in the same jurisdictions using the proposed Alberta Cabinet salary of $67,000.00. Appendix R also compares Cabinet salaries across all jurisdictions, but uses the proposed partly tax-exempt MLA base salary in the calculation of the total Alberta Cabinet salary. From Appendix P it can be seen that the present total annual compensation for Alberta Cabinet Ministers is $257,582.00 (‘grossed up’). From Appendices Q and R, it can be seen that the proposed total annual compensation for Alberta Cabinet Ministers is estimated at either $241,803.00 (fully taxable) or $241,388.00 (‘grossed up’ partly tax-exempt salary). Thus the implementation of the recommendations in this Report would result in a decrease in total annual compensation for Alberta Cabinet Ministers. Also note the negligible difference in the totals with respect to Alberta between Appendices Q and R. 50 | 3.9 Implications of Recommendations REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
If the tax-free allowance is retained and the recommendation contained in this report of a base MLA salary of $112,500.00 ($75,000.00 indemnity and $37,500.00 tax-free allowance) is implemented instead of a fully taxable salary of $134,000.00, it would result in a savings of $1,870,500.00 to the annual budget of Alberta. If this recommendation is not adopted but the recommendation of a fully taxed salary of $134,000.00 is, the entirety of the $1.87 million would go to the federal government in the form of income taxes. Regarding the recommended MLA pension plan, it may be of interest that, based on the proposed salary of $134,000.00, an MLA who had served eight years (or two terms) as a private Member would receive an estimated annual pension at retirement of around $31,300.00. This estimate is based on a number of assumptions and is provided here only as an example. Finally, if the recommendations contained in this Report are adopted in full, the total cost (including pension benefits) to the Province of Alberta to compensate its provincial legislators, of which there are now 87, would be approximately the same as the cost to compensate the 83 Members in 2011/2012. Expressed as a percentage of the province’s overall budget of more than $39 billion, this represents 0.043 per cent, the same figure as was mentioned in Section 1.4 of the Introduction with respect to the circumstances before this review was initiated. . Contemporaneous with its release, the full Report will be posted and available for public viewing on the website: http://www.mlacompensationreview-alberta.ca/
The Honourable J.C. Major, CC, QC
3.9 Implications of Recommendations | 51 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Appendices
52 | Appendices REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
A List of Alberta papers that carried notices of the review and copies of the notices 54 B Calendar of when notices appeared in papers 62 C Cheryl Scarlett’s written submission and exhibits 64 D Member cash compensation comparisons for provincial, territorial and federal legislators in Canada 92 E Member total compensation comparisons for provincial, territorial and federal legislators in Canada 94 F Dr. Allan Tupper’s written submission 96 G Dr. David Docherty’s written submission 115 H Raymond Speaker’s written submission 122 I Dr. Herbert Grubel’s written submission 130 J Hay Group Report 152 K Aon Hewitt Report 224 L Transcripts from the January 23rd, 2012, public hearings in Edmonton 238 M Transcripts from the February 2nd, 2012, public hearings in Calgary 277 N Member total compensation comparisons and proposed Alberta salary and pension (FULLY TAXABLE) 318 O Member total compensation comparisons and proposed Alberta salary and pension (w/ TAX-FREE ALLOWANCE) 320 P Cabinet Minister total compensation comparisons and present Alberta Cabinet salary 322 Q Cabinet Minister total compensation comparisons and proposed Alberta Cabinet salary (FULLY TAXABLE) 324 R Cabinet Minister total compensation comparisons and proposed Alberta Cabinet salary (w/ TAX-FREE ALLOWANCE) 326
Appendices | 53 REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
A List of Alberta papers that carried notices of the review and copies of the notices
54 | Appendices 55
appendix A t r
Appendices | Appendices | Page 1 | May 2012 Repo Click for Copy for Copy Click
– ) Click for Copy –
(AirdrieAB)
14, 2012 14, – MLA Compensation Review ad campaign- Review Compensation January MLA 2012 January 8 January BARRHEAD LEADER (Barrhead AB) BASHAW(Stettler STAR AB) BEAUMONT NEWS (Beaumont, AB) BROOKS COUNTY& CHRONICLE (Brooks AB) DISTRICT(Beaverlodge AND AB) NEWS BEAVERLODGE BONNYVILLE AB) (Bonnyville NOUVELLE IslandBOW ISLAND COMMENTATOR(Bow AB) AB) (Bassano BASSANO TIMES CAMROSECANADIAN (Camrose AB) CASTOR ADVANCE (Castor AB) CARDSTON CITYTEMPLE STAR (Cardston AB) WEEKLYCALGARY FAST FORWARD (Calgary AB) CHESTERMEREWEEKLY ANCHOR(Chestermere AB) PRESS (ClaresholmCLARESHOLM LOCAL AB) AB) COCHRANETIMES(Cochrane, COALDALE SUNNY SOUTH(Coaldale NEWS AB) Lake AB) (Cold SUN LAKE COLD CONSORTENTERPRISE (Consort AB)
ATHABASCA ADVOCATE(Athabasca AB) BANFF CRAIG CANYON & (BanffAB Weekly Campaign Weekly AIRDRIE CITY(Airdrie AB) VIEW AIRDRIE ECHO January 9,2012 Campaign A - General Notice ad A - General Campaign Daily Campaign CALGARY HERALD CALGARY SUN EDMONTON JOURNAL EDMONTON SUN FT. TODAY MCMURRAY GRANDEPRAIRIE DAILY HERALD/TRINBUNE LETHBRIDGE HERALD RED DEER ADVOCATE MEDICINE HAT NEWS campaign advertising Review MLA Compensation REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
MLA Compensation Review ad campaign- January 2012 CORONATION EAST CENTRAL ALBERTA REVIEW (Coronation A) CROWSNEST PASS HERALD (Blairmore AB) CANMORE/BANFF ROCKY MOUNTAIN OUTLOOK (Canmore AB) CARSTAIRS COURIER (Carstairs AB) DEVON DISPATCH NEWS (Devon, AB) DIDSBURY REVIEW (Didsbury AB) DRAYTON VALLEY WESTERN REVIEW (Drayton Valley, AB) DRUMHELLER MAIL (Drumheller AB) ECKVILLE ECHO (Sylvan Lake AB) EDMONTON EXAMINER (Edmonton, AB) ELK POINT REVIEW (Elk Point AB) EDSON WEEKLY ANCHOR (Edson AB) FAIRVIEW POST (Fairview AB) FORT MCMURRAY CONNECT (Fort McMurray) FORT SASKATCHEWAN RECORD (Fort Saskatchewan AB) FOX CREEK TIMES (Valleyview AB) FALHER SMOKY RIVER EXPRESS (Falher AB) FORT MACLEOD GAZETTE (Fort Macleod AB) GRANDE CACHE MOUNTAINEER (Grande Cache AB) HANNA HERALD (Hanna, AB) HIGH RIVER TIMES (High River, AB) HINTON PARKLANDER (Hinton, AB) HINTON VOICE (Hinton AB) HIGH PRAIRIE SOUTH PEACE NEWS (High Prairie AB) INNISFAIL PROVINCE (Innisfail AB) JASPER FITZHUGH (Jasper AB) LACOMBE GLOBE (Lacombe, AB) LAC LA BICHE POST (Lac La Biche AB) LAMONT FARM 'N' FRIENDS (Lamont AB) LETHBRIDGE SUN TIMES (Lethbridge AB) LLOYDMINISTER MERIDIAN BOOSTER ) (LLoydminister, AB) MAYERTHORPE FREELANCER (Mayerthorpe, AB) MORINVILLE FREE PRESS (Morinville AB) NANTON NEWS (Nanton AB) OKOTOKS WESTERN WHEEL (Okotoks AB) OLDS ALBERTAN (Olds AB) OYEN ECHO (Oyen AB) LEDUC/WETASKIWIN PIPESTONE FLYER (Millet AB) PEACE RIVER RECORD-GAZETTE (Peace River AB) PINCHER CREEK ECHO (Pincher Creek, AB) PONOKA NEWS (Ponoka AB)
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appendix A t r
Appendices | Appendices | Page 3 | May 2012 Repo MLA Compensation Review ad campaign- Review Compensation January MLA 2012
PROVOST NEWS (Provost AB) RED DEER EXPRESS (Red Deer AB) REDWATER REVIEW (Redwater AB) REVIEW RIMBEY AB) (Rimbey ROCKY MOUNTAIN MOUNTAINEER HOUSE (Rocky Mtn. House ) RYCROFT SIGNAL(Rycroft CENTRAL PEACE AB) SEDGEWICK COMMUNITY (Sedgewick PRESS AB) SHERWOOD Park, AB) PARK NEWS(Sherwood GROVESPRUCE (Spruce AB) EXAMINER Grove STONYPLAIN REPORTER (Stony AB) Plain GAZETTESWANGRIZZLY HILLS (Swan Hills AB) AB)LAKESIDELAKE LakeSLAVE (Slave LEADER Lake SCOPELAKE SLAVE AB) (Slave SMOKY LAKE SIGNAL (Smoky Lake AB) STETTLER INDEPENDENT (Stettler AB) (St.GAZETTEST. Albert ALBERT AB) ST. PAUL JOURNAL (St. AB)Paul SUNDRE ROUND-UP (Sundre AB) SYLVAN LAKE NEWS Lake(Sylvan AB) TABER TIMES (Taber AB) THREE CAPITAL HILLS (Three Hills AB) (TofieldTOFIELD AB) MERCURY TWO COUNTYCHRONICLE & HILLS (Two Hills AB) VALLEYVIEW VIEWS VALLEY (Valleyview AB) VAUXHALL ADVANCE (Vauxhall AB) VEGREVILLE OBSERVER (Vegreville AB) WEEKLYVIKING REVIEW (Viking AB) VERMILION(Vermilion VOICE AB) VULCAN ADVOCATE AB) (Vulcan WABASCA AB) (Wabasca FEVER WESTLOCK(Westlock NEWS AB) WETASKIWINTIMES (Wetaskiwin AB) WAINWRIGHT (Wainwright STAR AB) AB) (Whitecourt STAR WHITECOURT RAYMONDWEEKLY MAGRATHWESTWIND (Magrath NEWS AB) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
MLA Compensation Review ad campaign- January 2012 Campaign B - Meeting Notice ad – Click for Copy Daily Campaign January 11- 21, 2012
CALGARY HERALD CALGARY SUN EDMONTON JOURNAL EDMONTON SUN FT. MCMURRAY TODAY GRANDE PRAIRIE DAILY HERALD/TRINBUNE LETHBRIDGE HERALD RED DEER ADVOCATE MEDICINE HAT NEWS
Campaign C- Cancellation Notice ad – Click for Copy Daily Campaign January 24-28, 2012 FT. MCMURRAY TODAY GRANDE PRAIRIE DAILY HERALD/TRINBUNE LETHBRIDGE HERALD MEDICINE HAT NEWS RED DEER ADVOCATE
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appendix A t r Appendices | Appendices | May 2012 Repo [email protected] If you would like to make a presentation a presentation make to like would If you meetings, please public the of one at of the one weekregister in advance e-mail phone, by letter. or meetingdate Those who are unable attend to may input through writtenstill provide must submissions Written submissions. be February 24, 2012. by received and the names of authors Submissions will be made public. Specific about details the public meetings will be posted on and advertisedthe website in the local daily papers of hosting communities. Ft.FEJDJOF)BUt3FE%FFS Web www.mlacompensationreview-alberta.ca More Info More The Honourable John C. QC CC, (Jack) Major, Street, Edmonton, 1E4 AB T5K - 107 9718 #801, Toll-free:1.855.643.6704 Tel: 780.643.6704 E-mail: Independent Review of Compensation and Benefits of of Compensation Review Independent Assembly of AlbertaMembers of the Legislative Meetings of Public Notice $BMHBSZt&ENPOUPOt'PSU.D.VSSBZt(SBOEF1SBJSJFt-FUICSJEH The Honourable John C. (Jack) Major, meetings public conducting is CC, QC, the review of of his a component as and benefitscompensation of Members Assembly of Alberta.of the Legislative make will he Based findings on his Assemblythe to recommendations regarding the and compensation the benefitsto Members paid Assembly. of the Legislative Individuals and groups are by share their ideas to encouraged making a public presentation. REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Independent Review of Compensation and Benefits of Members of the Legislative Assembly of Alberta Public Input Invited The Honourable John C. (Jack) Major, CC, QC, is conducting an independent review of the compensation and benefits of Members of the Legislative Assembly of Alberta. Justice Major is seeking public input through written submissions and oral presentations at public meetings. The public meetings in Calgary are scheduled as follows: Thursday, February 2, 2012 1 p.m. to 4 p.m. and 6:00 p.m. to 9:00 p.m., Pekisko Room, McDougall Centre, 455 – 6 Street S.W., Calgary, AB If you would like to present, please register by phone or e-mail one week prior to the meeting. Further information about the review is available online at: www.mlacompensationreview-alberta.ca Deadline for written submissions is Friday, February 24, 2012 Submissions and the names of authors will be made public. More Info The Honourable John C. (Jack) Major, CC, QC 801, 9718 - 107 Street, Edmonton, AB T5K 1E4 Tel: 780.643.6704 or toll-free: 1.855.643.6704 E-mail: [email protected]
A60 | Appendices 61
appendix A t r Appendices | Appendices | May 2012 Repo CANCELLED toll-free: 780.643.6704 or toll-free: Tel: e onlinee www.mlacompensationreview-alberta.ca at: Independent Review of Compensation and Benefits of and Benefits of Compensation Review Independent AssemblyMembers of Alberta the Legislative of Further information about the review is availabl Furtherinformationis about review the QC CC, John C. (Jack) Honourable Major, The T5K 1E4 AB Edmonton, 801, 9718 - 107 Street, The Honourable John C. (Jack) Major, CC, QC, is conducting an independent review of the QC, is conducting review an independent CC, John C. (Jack) Honourable Major, The Assembly of Alberta.Legislative and benefits of Members of the compensation been cancelled lack of registrants. due to public meetings have McMurray Fort The Submissions and the submissions. written input through Members of the public can provide names of authors will be made public. 24, 2012 February written submissions is Friday, Deadline for can call 1.855.643.6704 for information. other meeting locations at present who wish to Those 1.855.643.6704 E-mail: [email protected] Public Meetings Public JanuaryWednesday, 25, 2012 REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
B Calendar of when notices appeared in papers
62 | Appendices 63
appendix B t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
C Cheryl Scarlett’s written submission and exhibits
64 | Appendices 65
appendix C t r Appendices | Appendices | May 2012 Repo remuneration, benefits and and benefits remuneration, de on behalf of the tive Assembly Act and and Act Assembly tive formation Technology, and Technology, formation in accordance with the the with accordance in s of payments include the Premier, a Minister the Premier, include s of payments titlements, nor any vacation entitlements or or entitlements vacation any nor titlements, r various roles in addition to the MLA indemnity indemnity MLA the to addition in roles various r GOA are charged back and reimbursed to the LAO GOA are charged back and reimbursed a as detailed in orders in council or ministerial ministerial or council in orders in detailed as a -free allowance. In addition, Members may be may -free allowance. In addition, Members including payments ma including payments Pay and Benefits Pay and ittee through the Legisla ittee through ities with the exception of remuneration that Members Members that remuneration of the exception ities with brief overview of Members’ Office (LAO, as we refer to ourselves) support the support ourselves) to refer we as (LAO, Office 1 nefits are determined determined are nefits ly of Alberta by providing nonpartisan procedural, ly of Alberta by providing or of Human Resources, In or of Human January 2012 on government committees. The authority for these these for authority The committees. government on for all remuneration paid to Members all remuneration paid to Members for tion of Members’ pay and benefits tion of Members’ the administra . The responsibility for Legislative Assembly of Alberta Overview of MLA slative Assembly of Alberta. slative Assembly Presentation to Honourable J.C. Major Presentation to Honourable Members do not have casual or general illness en illness or general do not have casual Members entitlements. leave other o Legislative Assembly Act, Act, Assembly Legislative as delegated to the Members’ Services Comm through the Members’ Services Committee orders, and and orders, Committee Services Members’ the through MLA Pension Plan Act. by the LAO on behalf of the processed Payments by the government. is paid based on 365 work days per year. remuneration All Member Members’ pay, Members’ health benefits, MLA pension plan, and allowance. transition government of Alberta (GOA). Examples of these type government remuneration. committee government and eligible for additional pay based on appointments fo pay based on appointments for additional eligible allowance. tax-free and for all remuneration, The LAO is the paymaster All Members receive an MLA indemnity and tax and indemnity MLA an receive Members All Members’ pay is set in accordance with these author these with accordance in set is pay Members’ may receive in recognition of their service of their service in recognition receive may of Albert by the government determined is appointments orders. orders. Authorities Authorities be and pay Members’ govern that authorities The paymaster of role of LAO as Overview remuneration Members’ REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA |
Introduction of presenter: Cheryl Scarlett, Direct Introduction of presenter: Broadcast Services with the Legi Broadcast Services today. as they exist entitlements is to provide a The intent of today’s presentation Assemb of the Legislative Speaker and the Members staff that work for the Legislative Assemble The administrative and educational services administrative the LAO. of branch Resource Services Human rests with the to with respect information providing I will be today In the presentation 1. 2. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
3. Remuneration All MLA remuneration except payments for service on government committees is set pursuant to the Legislative Assembly Act and authority delegated to the Members’ Services Committee. The current remuneration chart is posted on the Alberta Legislative Assembly’s website. (Tabling 1) A link to the Report of Selected Payments to the Members and Former Members is also posted on our site. This report provides payments to all Members, including remuneration, benefits, allowances, travel expenses and payment made under the MLA pension plan and public service pension plan. (Tabling 2) Member compensation decisions per the Members’ Services Committee have varied throughout the years; however, the current formula for Member compensation adjustments is in accordance with a decision of the committee on October 5, 1998, whereby Components of Member remuneration are to be adjusted on April 1 of each year by the same percentage increase or decrease as in the Average Weekly Earnings for Alberta as reported by Statistics Canada survey of employment payroll and hours for the immediately preceding calendar year. A summary of historical adjustments (%) is also posted on the website; however, it is important to note the decisions of the committee to freeze increases for the last three fiscal years. As detailed on the site, However, based on an approved motion of the committee of December 8, 2010, there shall be no annual adjustment to the salaries as outlined (below) for the fiscal year April 1, 2011 to March 31, 2012. Salaries have remained unchanged since April 1, 2008. (Tabling 3) All three charts posted on the web have been tabled (MLA remuneration, Selected Payments report link, and historical compensation adjustments). When looking at the remuneration chart, one will see that there are various components of Members remuneration. (Refer to the chart.)
MLA indemnity and tax-free allowance
All Members receive the MLA indemnity and tax-free allowance.
The current remuneration is $52,092 per annum.
MLA Indemnity $52,092.00 MLA Tax-free Allowance $26,046.00 (Total) $78,138.00
In addition, all Members receive a tax-free allowance equivalent to 50 per cent of the indemnity in recognition of expense incidental to their duties. The authority for the tax-free allowance is pursuant to section 81of the Income Tax Act. (Tabling 4) Current total remuneration, including the indemnity and tax-free allowance, is $78,138 per annum. Based on a comparison as of November of 2011 Alberta was second lowest in comparison to all Canadian jurisdictions. (Note that all but four jurisdiction have no tax-free allowance). (Tabling 5) Of interest, if Members did not have the tax-free allowance, Members’ remuneration would need to be approximately $90,708 per annum to provide an equivalent net remuneration to the Member.
2
C66 | Appendices 67
appendix C t r $8,136 $8,136 $6,792 $6,792 Appendices | Appendices | $81,312 $63,912 $31,968 $28,392 $13,596 $10,872 $10,872 $63,912 $28,392 $63,912 $15,984 May 2012 Repo e federal government in income in income government e federal quivalent to the increased amount of income of income amount quivalent to the increased of the change. In essence, it appears that the the that appears it essence, In change. the of 3 difference in the increased remuneration amount amount remuneration in the increased difference would all be forwarded to th would all be forwarded
, Office Other Than Than , Office Other
* Recognized opposition party party opposition Recognized * Tax ($1,846.37 - $799.00 = $1,047.37). 43% increase Tax ($1,846.37 - $799.00 versus $1,093,454.28 increased tax) remuneration ($1,093,590.00 additional All taxable income income All taxable List appointments Of interest in this calculation is that the is that in this calculation interest Of (approximately $1,000 per month) is approximately e approximately is month) per $1,000 (approximately result a as paying be would Member the that tax cost remuneration employer additional payments. 16% increase ($7,559.00 - $6,511.50 = $1,047.50). Remuneration All taxable List appointments
Assistant Government Whip Chief Opposition Whip Assistant Opposition Whip Third-party Whip* Official Opposition House Leader Third-party House Leader* Chief Government Whip Deputy Speaker and Chair of Committees Deputy Chair of Committees Leader of a recognized opposition party Premier Speaker portfolio Minister with Minister portfolio without Leader of the Official Opposition Special Members’ Allowances Allowances Members’ Special Additional Allowances REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA |
REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
Committee payments LAO committees (all-party committees)
Allowances Remuneration Committee Allowances (Category A and C)
Chair $1,500 per month Deputy Chair $1,250 per month Member $1,000 per month (not to exceed $3500/maximum 3 committees) Speaker and Opposition Leaders (in lieu of all committee activity) $3,500 per month Committee Member Allowance (Category B) Up to four hours long $135.90 Over four to eight hours $224.20 Longer than eight hours $353.00 Committee Chair Allowance (Category B) (per meeting, in addition to committee members' allowance noted above) Up to four hours long $47.70 Over four to eight hours $88.50 Longer than eight hours $142.70 Speaker and Opposition Leaders $3,500 per month
Detailed remuneration chart o Committee A, B, C o Pay for A/C committees is based on a maximum of three committees/$3,500 o Pay in lieu of all committee activities – Speaker, Leaders of the opposition parties: $3,500 Category A Committees: Standing Committee on the Alberta Heritage Savings Trust Fund Act Standing Committee on Private Bills Standing Committee on Public Accounts Standing Committee on Legislative Offices Special Standing Committee on Members’ Services Standing Committee on Privileges and Elections, Standing Orders and Printing Any other committee designated as a Category A committee by resolution of the Assembly Category B Committees: (none at this time) Category C Committees: Standing Committee on Community Development Standing Committee on Education Standing Committee on Energy Standing Committee on Finance Standing Committee on Public Health and Safety
Government appointments of MLAs to Government Committees (Tabling 6) Current authority for payments is pursuant to OC 450/2011 and 526/2011, MLA remuneration order, and section 1 or 2 of OC 466/2007 of the committee remuneration order. Appointments and payments are not set pursuant to the LAA or by MSC, rather by the government. 1. In this order “committee” means a committee, board, commission, council, or other body established 4
C68 | Appendices 69
appendix C t r Appendices | Appendices | May 2012 Repo lished pursuant to the $3,483 per month; Ministers, $3,483 per month; Ministers, are calculated and administered administered and calculated are and entitlement. entitlement. and three months in the fiscal year to be eligible be eligible year to in the fiscal three months every fiscal year there shall be paid to every every fiscal year there shall be paid to every for that year as estab as year that for m of three months in that fiscal year, an m e entities to track all appointments and ensure that and e entities to track all appointments ve completed a declaration confirming such. a declaration confirming ve completed nancial institution to be applied against an RRSP red RRSP room as identified on the individual as identified on red RRSP room the government (Premier, Minister, government government Minister, (Premier, government the on. However, Members on. However, Members may request that the LAO 5 and reimbursed to the LAO by the GOA. and reimbursed eir health benefits health eir committee activities: Premier, activities: committee RRSP allowance once per fiscal year. allowance once per RRSP ithholdings and benefit entitlements (b) (c) in Council by the Lieutenant Governor (d) by a Minister of the Crown, or by a regulation
of the Legislative Assembly a committee of the Legislative Assembly but does not include Pay in lieu of all government Pay in lieu of all government $2,967 per month. per $2,967 Sections 2.1 – 2.5 Sections 3 Review OC o o o Pursuant to the Members’ Allowances Order once in Pursuant to the Members’ person who is a Member and has served a minimu person who is a Member Tax Act (Canada). Income This allowance is paid as taxable remunerati allowance equal to one-half of the RRSP dollar limit the RRSP dollar limit of to one-half allowance equal fi directly to the Member’s this payment transfer has the requi account, provided that the Member and that they ha Notice of Assessment Member’s o o (a) by an Act of the Legislature Members are eligible to receive an to are eligible Members To ensure that all appropriate w all appropriate To ensure that r Human Resource Services branch) for processing Resource Services branch) for their Human appropriately, the LAO is responsible (through th and managing to Members all payments are charged back appointments) committee As such, they work in conjunction with the appropriat As such, they work in conjunction with processed by the LAO on behalf of All payments of served a minimum have must Members Recent change: $11,485. be will year fiscal allowanceRRSP The 2012-13 the for based on their multiple appointments. appointments. based on their multiple receives the appropriate pay Members for the payment. RRSP Allowance Pay and Benefit Administration REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA |
4.
REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
5. MLA Health Benefits Plan – Members’ Choice Members are provided with a health benefit plan that is intended to parallel benefits offered to management employees of the public service of Alberta plan, First Choice. Like First Choice, Members’ Choice is a combined benefit plan offering Members the flexibility to review and change coverage levels every two years. Coverage options are provided for in the following health plans: o Prescription coverage and extended medical coverage, including emergency out-of-Canada travel coverage, o Dental coverage, and o Life insurance coverage. Premiums for the plans are paid by both the LAO and the Member (see Members’ Guide if necessary/rate chart).
MLA Long-term Disability Insurance (LTDI) Coverage
o The LTDI provides partial income for a Member who becomes mentally or physically disabled during their term and, as a result, must resign their seat.
o Disability benefit is 70 percent of the total eligible recurring annual salary. There is no minimum service requirement for this benefit. The LTDI benefit continues until such time as the individual is deemed fit to return to gainful employment or reaches age 65.
o However, this plan differs from normal employee plans as there is no option to “return to work” (as a Member) as the Member has to resign to obtain the benefit.
Health Spending Account
o Effective April 1, 2012, Members will be entitled to a health spending account of $950 per year. This benefit is parallel to a plan being implemented April 1, 2012, for public service management employees.
o A criterion for eligible expenditures is presently being developed and will be consistent with the public service program. However, the approval of eligible claims will follow the existing Canada Revenue Agency (CRA) guidelines for eligible medical expenses.
Extended Benefits Option for Former Members
o Provides Members with the option of continuing benefit coverage on the MLA plan when they resign, choose not to run for re-election, or are defeated.
o The coverage provided for prescription/extended medical, dental, and life insurance coverage based on the level of Member’s coverage at time of retirement.
o Premiums continue to be paid by both the LAO and the former Member for the first five years, and thereafter they are paid entirely by the former Member if they choose to stay on the plan.
o Participation on the plan terminates at age 75 (70 for life insurance) or sooner if directed by the former Member. Members can drop the coverage in whole or in part; however, once they have dropped coverage, they cannot recommence at a later date.
6. MLA Pension Plan
6
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appendix C t r Appendices | Appendices | May 2012 Repo ice) received a refund ice) received a refund average pensionable average plan’s unfunded liability. unfunded plan’s s of service. s of service. ee allowance at the highest level attained attained level highest the at allowance ee per cent of the highest number of years of pensionable service in an an in service pensionable of years of number ed the Member pension benefits to 3 per cent pension ed the Member te of Member’s monthly indemnity and tax- indemnity monthly Member’s te of ive years of pension serv ive years of pension spension were based on a rate of 10 per cent ribution rates changed changed rates ribution rvice formulas and cont March 20, 1989, up to a maximum of 12 years of March 20, 1989, up to a maximum ereafter do not/did not have a pension benefit ereafter do not/did not ecent years of service shall be first counted. (No (No counted. first be shall service of years ecent ice as a Member for which that person had ice as a Member ide toward meeting the the meeting ide toward 7 service prior to March 20, 1989, and October 1998 and formula amended. October 1998 and formula amended. in separate periods), after March 19, 1989. service. service. multiplied by X. multiplied by 2. for every year of service from 2 months free expense allowance by free expense allowance by 1. for every year of One month Formula calculated by multiplying the highest ra the highest calculated by multiplying Formula All members who were not vested at that time (f time that at vested not were who members All Formula based on: on: based Formula 1. and tax-fr indemnity of one month’s Amount 2. Member a as service of years part or The years 3. (whether continuously or of their contributions. of their contributions. th or 1989 in elected Members all result, a As 4. of 12 year ximum of six and a ma a minimum With pursuant to the MLA pension plan. pursuant to the MLA based on 4 The MLA pension plan as at 1993 was on service accrued of su time contributions at its LAO and Member as set was that cent per 1 additional an plus allowances for three consecutive years times the the times years consecutive three for allowances office. reduc However, a retroactive revision to the plan In calculating the years of service, the most r most service, the the years of In calculating any years of serv person shall be credited for received a payment.) previously The MLA pension plan was established in 1969. Se The MLA pension plan periodically throughout the years. periodically throughout was suspended in June 1993. The MLA pension plan allowance in to a transition Renamed This allowance was initially approved in July 1988 – Re-establishment allowance July 1988 – Re-establishment This allowance was initially approved in o o o o Historical Summary Summary Historical Historical Summary Summary Historical Transition Allowance Transition Allowance REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA |
7. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
o Subsequent formula change in August 2001 Present formula – two parts
1. For service prior to March 20, 1989, the amount to be paid:
o Multiply the highest rate of Member’s monthly indemnity and tax-free expense allowance (only) by one month for every year of service prior to March 20, 1989.
2. For service commencing on or after March 20, 1989, the calculation is based on total Member remuneration (*MLA indemnity, tax-free allowance, RRSP allowance, remuneration for office other than special Members’ allowance and remuneration for Legislature and government committees)
Uses a formula: A x B x 3, where
o A means the average month salary based on the three calendar years in which the person received their highest salary,
o B means the number of years the person served as a Member during the period commencing March 20, 1989,
3. No person shall be credited for any years of service as a Member for which that person had previously received a payment.
The transition allowance order also provides (death benefit):
o When a person who is a Member dies, there shall be paid an amount equivalent to the amount of the transition allowance that the deceased person would have been entitled to at the date of death.
o This death benefit payment would be administered in the form of a life insurance policy that has been established strictly for the purpose of dealing with this order.
o Pursuant to guidelines in the Income Tax Act governing life insurance policies, a lump-sum death benefit paid to an individual(s) named as a designated beneficiary is tax free. A lump-sum payment to an estate as the designated beneficiary would be subject to payment of debts, probate fees, and tax.
Options for Members at Time of Retirement
o Retiring Allowance (pursuant to CRA rules) Under the present guidelines set out by the Canada Revenue Agency (CRA), a transition allowance is considered a “retiring allowance.” The term “retiring allowance” (also called severance pay) is an amount paid to officers or employees when or after they retire from an office or employment in recognition of long service or for the loss of office or employment.
o Deferral Option Presently a person who is eligible to receive a retiring allowance may elect to defer the payment of the amount of that allowance over a period of years. However, the decision respecting the 8
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appendix C t r Appendices | Appendices | d directly transferre retirement or loss of retirement May 2012 Repo ng allowance to a RRSP in their RRSP. The amount that is RRSP. The amount lowances, Members who have years of service who have years of service lowances, Members immediately at the time of time the at immediately on the payout of their transition allowance, transition of their on the payout yments. Income tax must be deducted from a a from deducted be must tax Income yments. be more than the Member’s available RRSP available RRSP be more than the Member’s incomes throughout a tax year, a Member may throughout a tax year, a Member may incomes er signs a declaration confirming such. er signs a declaration confirming ar of service prior to 1996. 9 when filing their yearly income tax. tax. income yearly their filing when fits. Thank you for the opportunity to present. for lump-sum payments at source: payments lump-sum for id directly into an RRSP. RRSP. an into directly id does not accrue interest with the LAO, and the present accrued RRSP is over and above a Member’s “normal “normal for transfer to an RRSP is over and above a Member’s This eligible amount room.” $2,000 for each year or part ye part or year each for $2,000
o o specific deferred amounts to be paid is required specific deferred amounts Member may, any In addition to this provision, to an payment of their direct a designated amount Retiring allowances are treated as lump-sum pa treated as lump-sum are allowances Retiring pa is it unless allowance retiring tax rate There is a slightly reduced 3. Over $15,000 – 30 per cent the Memb for the year, and deduction limit office. by the LAO to the financial institution cannot Again pursuant to CRA guidelines for retiring al Again pursuant to CRA guidelines for retiring before 1996 are eligible to directly transfer a part of a retiri taxation at source. thus sheltering it from name, 1. 2. $5,000 or less – 10 per cent $5,000 to $10,000 – 20 per cent of However, dependent upon all other sources still be required to pay additional tax tax still be required to pay additional Formula is based on on based is Formula Of final note, any deferred money Of final note, any deferred money funded. fully is liability allowance transition Option to Request a Reduced Tax Rate at Time of Payment Payment of Time Rate at a Reduced Tax Request Option to RRSP Transfer Provisions o o o REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA |
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D Member cash compensation comparisons for provincial, territorial and federal legislators in Canada
92 | Appendices 93
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** Tax Free Allowance amount is grossed-up to equivalent taxable amount taxable equivalent to grossed-up is amount Allowance Free Tax ** * Average Committee pay from all sources (Legislative and Government) excluding Chair and Deputy Chair pay Chair Deputy and Chair excluding Government) and (Legislative sources all from pay Committee Average *
May 2012 Repo
Prince Edward Island Edward Prince $65,344.00 $63,344.00 $65,344.00
New Brunswick New $85,000.00 $85,500.00 $85,000.00
Manitoba $85,564.00 $85,564.00 $85,564.00
Nova Scotia Nova $86,619.00 $86,619.00 $86,619.00
Saskatchewan $89,300.00 $89,300.00 $89,300.00
Yukon $13,371.00 $69,531.00 $89,320.00 $82,902.00
Nunavut $90,396.00 $90,396.00 $90,396.00
Newfoundland/Labrador $95,357.00 $95,357.00 $95,357.00
British Columbia British $101,859.00 $101,859.00 $101,859.00
NWT (1) (1) NWT within commuting distance commuting within $6,962.00 $96,615.00 $106,919.00 $103,577.00
Quebec $15,538.00 $85,338.00 $108,424.00 $100,876.00
Ontario $116,550.00 $116,550.00 $116,550.00
NWT (2) (2) NWT beyond commuting distance commuting beyond $96,615.00 $13,924.00 $110,539.00 $117,223.00
Senate $132,300.00 $132,300.00 $132,300.00
Alberta $52,092.00 $125,363.00 $11,225.00 $36,000.00 $26,046.00 $137,933.00
House of Commons of House $157,731.00 $157,731.00 $157,731.00
Jurisdiction TOTAL TOTAL Allowance Pay Allowance Indemnity
** Grossed up up Grossed ** RRSP Committee * Expense Free Tax
(based on information available as of March 1, 2012) 1, March of as available information on (based
MEMBER CASH COMPENSATION COMPARISONS COMPARISONS COMPENSATION CASH MEMBER APPENDIX D D APPENDIX REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
E Member total compensation comparisons for provincial, territorial and federal legislators in Canada
94 | Appendices 95
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F Dr. Allan Tupper’s written submission
96 | Appendices 97
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two reasons. First, many Canadians are now uneasy with executive dominated government especially when combined with a parliamentary majority. Stronger legislatures are the best antidote to executive dominance. Second, Canadian democracy requires revitalization. Citizens, as discussed below, are often cynical, indifferent and even hostile to democratic politics. Legislatures, especially reformed ones, will play a major role in democratic renewal.
Several themes dominate the analysis. First, the democratic world in 2012 yields an irony. Citizens struggle, and often die, for the cause of democracy in autocratic countries like Syria, Libya, Egypt to cite a few examples. At the same time, citizens of the established democracies like Canada, United States, Great Britain and Australia frequently show disdain for, or indifference to, democratic politics, politicians and civil servants. (Howe, 2010) Citizens of affluent democracies, in other words, now take democratic government for granted. Worse still they see it as an unaffordable luxury or an impediment to their version of a good society. Such attitudes are worrisome. Very few countries enjoy the freedom, economic well-being and personal autonomy that flow from living in a genuine democracy. Democratic government far from being a luxury is at the heart of the western world’s success and influence.
A second theme relates to the first. Democracy with its compromises and debates is a messy, often unpredictable and sometimes slow system of government. Moreover, by their very nature, the value of democracy and democratic institutions are hard to measure. On the cost side, government salaries and expenditures can easily be totaled and condemned as excessive. On the other hand, the benefits of genuine political equality that flows from a broad electoral franchise, from freedom of speech and association and from the ability to communicate freely with members of government are impressive but hard to measure. In short, financial costs are easy to measure. Substantial, but hard to
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appendix F t r ” Appendices | Appendices | “delegate May 2012 Repo public service on on service public efficiency do not do not efficiency modern governments governments modern . Members of legislatures, s that provide health care,health provide that s ” was feasible. zes the impact of ributions, that allows them to serve them to serve allows that ributions, clearly, however, that legislatures are are that legislatures clearly, however, detail on the controversial subject of subject detail on the controversial ct of disciplined, mass political parties. of disciplined, ct ective foreign and national defense ective foreign Narrow concepts of Narrow concepts , the activities of of activities the , litics and require society. Members ned themselves. For members of small, ch complexity requires more delegation delegation more ch complexity requires ents ents need expertise to manage complex rvants to assist them in governing.rvants 3 govern on their behalf. on their They govern s, modern Canada and Alberta being good being good s, Alberta and modern Canada “direct democracy phically large countries with substantial populations er social security system er social security the operation of legislatures the operation remuneration that reflects their many cont reflects remuneration that very important to the quality of po to the very important recogni without financial penalty and that required modifications. Direct democracy major Modern democracy has has proven impossible in geogra of diverse peoples. In such jurisdiction to others now elect examples, citizens help much. commentnot does in essay this Finally, ItMLAs. argues for remuneration Alberta their personal lives. Representative Democracy Democracy to From Direct Observers of democracy re main influenced by visions of ancient Athenian actively where citizens democracy gover cohesive communities, relatively others. to of government Equally the task are often technically complex. Governm andpolicies presideto ov employment assistance and pensions. Su measure, benefits are easily discounted. benefits are measure, easily discounted. eff make to economies, resource-based politicians require expert civil se because impa is the and rise change major Another to central now are Parties with rare exceptions, are members of disciplined political parties. A major with rare exceptions, REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
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tradeoff occurs. Members lose some personal autonomy. On the other hand, political parties provide coherence and organization to complex political debates and events.
The shift from direct to representative government raises hard questions that are at the heart of the contemporary democratic experience. First, when citizens “delegate” democratic governance to others through elections, how do they then control their delegates? How do citizens ensure that their elected officials represent their views? In other words, how is responsive government maintained? Equally, how much independent judgement should members exercise? Should they have “carte blanche” to judge matters as they see fit? Second, how do elected representatives control civil servants they nominally preside over? Third, how are majority and minority rights reconciled? Fourth, how often should elections be undertaken? How broad should the franchise be?
Such questions are inherent to representative government. Citizens and governments often have different answers to them. As a result, representative democracy is a dynamic system that is always subtly changing and adapting. Occasionally, the changes are profound and result in constitutional change but such is the exception not the rule.
The Roles of Democratic Legislatures The renowned democratic theorist, Robert A. Dahl, sees representative institutions where members are elected through free, frequent and fair elections as essential features of a genuine democracy. (Dahl: 1998, 83-99) Without them and freedom of speech and association, democracy is either a sham or not democracy at all. In other words, elected legislatures are at the heart of modern democracy.
F100 | Appendices 101
appendix F t r Appendices | Appendices | as nd ures differ May 2012 Repo Alberta’s Alberta’s e legislatures are e legislatures are anted by its popular anted by is, the first first the party is, Their legislat Their es, the British House of es, the British ary government the United while ary government institutions. in existence for several centuries. In ems. Australian stat Australian ems. ’ electoral system, routinely gives the the gives routinely system, electoral ’ ferent powers. Even in broadly similar “bicameral”(anlegislatures a upper is does not judge how well the Alberta . For example, the constitutions of the the of constitutions example, For the . ring” willring” legislatures more generate latures have common characteristics and characteristics latures have common orms in a particular countryorms are seat bonus. That 5 countries different ways, in elected are like Afghanistan are even newer. The are even like Afghanistan lative seats than warr lative seats ve democratic upper houses are elected normally by variations of of variations by are elected normally upper houses o diverse. Some legislatur Some o diverse. has a has single house elected by a “first past post” the lature of South Africa, forlature of South example, is new. In the that a “separation of powers” system. powers” of “separation a to Alberta’s legislature, elected by a ‘first past the post legislature, elected by a substantial Conservatives Progressive receives a much greater share of legis rforming. As almost all authors on this rforming. pe is legislature, other any or legislature, formations. ideal note, democracy rests on various subject How different countries fare and how a legislature perf that require questions of fact research and reflection. For example, contrasts system. The second major point is that my analys contrast, the present legis in countriesMiddle East, legislatures Commons and the American CongressCommons among for example, are now senior the of legislatures. They have beencitizens struggle for democracy in the “Arab Sp Arab countries effecti establish United Kingdom and Canada have parliament governed by States is the lower house). Moreover, representation proportional electoral syst Two points require emphasis. First, legis points require emphasis. Two are als they roles. Equally, Legislatures differ in many ways other follow different procedures and have dif
accordingly. Legislatures in different take Canadasystems, and Australia, substantial differences are noted. In have state most governments Australia, REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
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vote. This mechanical impact may allow the Alberta legislature to perform better in some areas than other legislatures and less well in others. That said, legislatures should be constantly assessing their effectiveness, their resources (both material and political) and their performance.
Modern legislatures perform common roles. The major roles are: x The representation of citizens’ interests, views and policy preferences. In short, representation. x The passage and careful consideration of legislation. In short, the legislative function. x The control and accountability of governments. In short, the control function. x The education of public opinion. In short, the educative function. x The resolution, by individual members, of constituents’ problems. In short, constituency service. Each of these activities is important to society. Seen together, they comprise a formidable list.
Representation: Legislatures represent the views, ideas and preferences of citizens and groups of citizens to government and do so in an open public forum. In many ways, legislatures are organized around representation. They invariably have more members than the other two main branches of governments, the courts and the cabinet. And in Canada members are organized into constituencies that give each member a certain number of citizens to represent.
The representational role of legislatures is so important and so omnipresent that its importance is easily overlooked. In his elegant recent analysis of the Canadian House of Commons, David E. Smith persuasively argues that the House is Canada’s preeminent national institution. (Smith: 2007) Interestingly, his book is
F102 | Appendices 103
appendix F t r
Appendices | Appendices | – May 2012 Repo flect citizens’ flect citizens’ all must be approved – incial issues with the need to both official languages. Likewise the both official languages. His is that main argument the House provincial because institution they anchored by the member, constantly constantly by the member, anchored a particularly important role as 7 the party’s overall platform, ideology platform, overall the party’s , governments and citizens. , governments and citizens. Members Moreover, it rests on a broad franchise, franchise, rests on a broad it Moreover, ed that Canadian political parties, like ed that presents all citizens and has residents and citizens all presents s, economic, environmental and social environmental s, economic, members, especially long serving ones,members, : “The most fundamental policy decisions erate like franchises.erate like The (Carty: 2002) d improve legislation, hear and re d improve legislation, : Modern legislatures debate and amend : Modern legislatures gislation and communicate the content of legislation the content gislation and communicate local needs. A delicate, always shifting balancelocal needs. A delicate, always is thus 2006, 431) Admittedly, governments now dominate the now dominate governments 2006, 431) Admittedly, obligation speak to broad prov speak to broad obligation eak to their needs, their views and their and views represent their residents and speak to their needs, all provincial ideals. of legislatures play In Canada, members balance their party’s is the sole Canadian institutionis the sole Canadian that re their concerns. to the capacity to speak are the preeminent provincial legislatures parties intermediaries between political argu reflect local needs. R.K. Carty has treaties and trade agreement budgets, by legislatures.” (Carey: But elected assemblies remain legislative agenda. timing and content of the refine an deeply involved. They titled “The People’s House of Commons”. House of Commons”. titled “The People’s and and territories represents all provinces op many contemporary businesses, of individual and collective regulation, elaboration rights
national, or provincial party, establishes party, national, or provincial views about the quality of le In some legislatures, to constituents. and organization. The local organization,and organization. The the local needscommunicates cial to the provin national party and adjusts or to message party’s general struck between local and provincial. and Legislation Deliberation legislation. As John M. Carey puts it REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
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become experts in particular policy areas. They are often very important in policy-making.
Some legislatures have strong committees where small groups of members examine bills in great detail, receive citizen and group representation and often make important changes. The Canadian House of Commons and the Senate have robust committee systems that serve the public interest well. Such committees often stress policy areas that are being ignored and thereby put important issues on the public agenda.
In Alberta, legislative committees are underdeveloped. In the 1990s, the Klein government established standing policy committees (SPCs) that comprised only government MLAs. The SPCs were thus government committees not legislative committees. Their very existence undercut the normal parliamentary practice of having legislative committees with members from all parties. Alberta’s legislature, which has only 83 members currently, should have a small number of committees. Such committees should be structured, however, to ensure that they have the capacity to review the expenditures, policy-making and regulations of the Government of Alberta.
An essential characteristic of legislative debate is its public character. Legislatures, with very few exceptions, operate in full public view. Their debates are recorded and made parts of the public record. Members of the public can listen to debates in the legislative chamber. In some provinces, debates are televised and now “streamed” on Internet for immediate access.
The public character of legislative debate is significant. Public debate disciplines participants. It causes them to avoid extremes, to abandon or moderate self -
F104 | Appendices 105
appendix F t r Appendices | Appendices | ). May 2012 Repo ures are the most ures are the most overplay that role. overplay inflamed public cratic theory, the cratic theory, rves the public interest. he party with the second he party has several dimensions. has ne governments, bring bring governments, ne ” (Corry and Hodgetts: 1959, 178 ” (Corry and Hodgetts: electors that it is worthy of it is worthy power. electors that minister as the person with ultimate minister as the person with may maladministration. Ministers he principle means that ministers mmunity, and is supposed to exercise mmunity, sing views. Legislat sing failures but cannot go beyond and advance criticism go an 9 ty for a But while. ted in modern Parliamentary government.ted in Parliamentary modern estioning in the legislature, ultimately estioning in the legislature, ultimately years ago: “In demo years ago: cases differently, favour government cases differently, favour government ns. Their public character se administration in a department. The precise : Legislatures discipli laws of principle the Alberta, and poorly.Canada In controlling governments controlling governments especially the “official” opposition, the “official” t especially publicize government largest number of seats, ways. in several governments discipline of seats, largest number They seek out and partyopposition must an effective, be To to that suggests government the to alternative Opposition parties, parties, Opposition a party can discipline from an opposition government threat A viable electoral touch.of out or arrogant is that maladministrationalso expose of legislatures Members where governments abuse citizens’ rights, treat similar supporters or administer ministerial responsibility a identifies cabinet for policy and responsibility much is principle deba the of meaning The legislature’s role in 1991; Stone: 1995). Minimally, t (Sutherland: answer inmust the legislature about cases of accountabili and answers precise avoid opinion, as manifest by persistent qu interested positions and to consider oppo and positions interested consider to
open and public of institutioopen and public Governments Controlling As J.A. maladministration to and advocatepublic attention rights. minority put it many Corry and J.E. Hodgetts orlegislature represents the people, the co administration, to that, in its actual surveillance over the executive see not against them. people is for the government REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
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disciplines evasive ministers. Legislatures expose government administrative failures.
Educating Public Opinion – In his classic text on Canadian government, R. Macgregor Dawson reminds us that the House of Commons undertakes “the grand inquest of the nation.” (Dawson: 1970, 304). He means that legislatures probe significant matters and through deliberation educate public opinion.
Such education is obviously subtle and hard to assess. But it occurs. Citizens hear about legislative debate through media. They often learn of issues of which they were unaware. In some circumstances, they become very interested in the subject and take action. Interest groups learn of opposition or government positions that they had not heard previously. Accordingly, they may amend their positions. In an interdependent federation, the provincial governments monitor Parliamentary debate to understand better Ottawa’s ambitions and vice versa. The process is always a two way street. Citizens learn about government activity, and through elected members, communicate their views to government.
Constituency Work – Members of Canadian legislatures work extensively with their constituents in solving problems. This important role consumes a great deal of members’ time. Members’ constituency work ranges from sorting out routine problems and helping citizens apply for government programs to working on cases of serious injustice. Members work with community groups who want government funding for public works. They advise constituents how to work with other levels of government. Members explain public policies. They interact with local groups and speak to them in public gatherings. The list goes on. In a broader context, members’ constituency work is an extension of their representational role. It is a unique set of duties that requires patience, knowledge of government and a keen grasp of local sensitivities.
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appendix F t r Appendices | Appendices | one in their May 2012 Repo ic duties. They ute the “costs” of scheduled air to service do things that matter? matter? things that do antly restrained. They areantly restrained. fer from their publ opinion that is critical of politicians d, varied and unrelenting. They face varied and unrelenting. d, capital are Such stresses or Ottawa. ts to governments or of easy access es the costs and ignores the ignores the and benefits. costs the es tizens can easily tizens comp conducted. Such travel is often by gh do the legislatures of the Canadian Canadian gh do the legislatures of the inces like Ontario, Alberta and British Alberta and inces like Ontario, gree so are their families and associates. their are gree so 11 alaries and other expenses related with related alaries and other expenses : By all accounts, legislatures play major large but hard to measure. How, for hard to measure. How, large but el considerable distances to the provincial capital capital to the provincial distances el considerable the absence of convenient, the absence of convenient, provincial governments provincial - their privacy is signific - their privacy is vernments, improving governments, and controlling presentation, personal and family lives often suf personal and family members of Canadian concluding comments First, are in order. Two legislatures duties are broa lives. Their live demanding lives limits on their private
constantly on public display on constantly and to a de travel a lot. Their In their constituencies, they are,must workload in is heavy. prov large in Moreover, call’. ‘on reality, trav members many Columbia public where most important business is given vehicle personal motor On the otherfreedom of speech? hand, ci s the on focus narrow a by legislatures Members’ undoubtedly complicated public by current example, does one show the precise benefi Debate stress government. representative many Canadian communities. Members often have two residences – many Canadian communities. Members often have two residences constituency in the provincial and another and public servants. emphasis. A second point, already The benefits requires mentioned, of such re activities as legislative debate are legislation through public Governments The Role of Provincial roles in modern government. What thou Do provinces preside over? REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
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A useful starting point is the argument, dating back as long as the 1930s, that federalism was an outdated and ineffective form of government. Federalism by dividing power between a national and several provincial governments was said to provide weak government. Moreover, the forces of national and international commerce, national economic management and the welfare state allegedly doomed federalism and made provincial governments irrelevant.
Whatever the general merit of these claims, Canada is an obvious exception. The Canadian provincial governments are major forces that exercise policy-making power and influence far beyond those of the American or Australian state governments. Canada is a decentralized federation despite the intentions of the Fathers of Confederation who thought the 1867 constitution guaranteed a dominant federal government.
Many explanations have been advanced to explain the importance of Canadian provincial governments. Some argue that Canada, unlike the United States, is a series of loosely integrated regional economies. (Stevenson: 1977) For example, broadly speaking, Ontario now has an economy dominated by automobile production and financial services. Alberta’s prosperity rests on oil and natural gas. BC has fisheries and mining while Saskatchewan’s depends on wheat, potash and uranium. Provincial economic specialization combined with provincial ownership of natural resources means that resource corporations deal with provincial governments who control access to Crown resources. Other observers stress weaknesses in the federal political party system that, regardless of the party in power, often leaves out large parts of the country from the government caucus in Ottawa. Under these circumstances, provincial governments and legislatures are important outlets for provincial complaints. Provincial governments gain elevated status in citizens’ eyes. Finally, several authors see provincial governments themselves as the primary building blocks of
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appendix F t r Appendices | Appendices | May 2012 Repo many ways even s see as “foreign incial borders. They have They incial borders. al provides government that at some observer ental policy and regulation with the policy and regulation ental offices in many foreign countries countries foreign many offices in le, Canada has ten provincial higher has le, Canada 13 Aboriginal peoples in ovision of health care, education and education of health care, ovision ovincial perform governments many volved in these areas but primarily areas but in these volved ttawa lacks. On the expenditure side, On ttawa lacks. rmany and Mexico. Provinces share the rmany and Mexico. Provinces Crown resources. Provincial governments governments resources. Provincial Crown provincial governments build build nourish and governments provincial First Nations are primarily a federal a primarily are Nations First financial financial assistance. The provinces are ial governments and their attendant attendant and their ial governments ur relations within prov uld easily be extended. hat are supported by a feder federal government. They federal government.interact They with increasingly important area of environm policy”, matters that are normally thought to be the domain of national to normally thought policy”, matters that are has example, for Alberta, governments. including Ge the United States, Japan, implies that though the constitution The list responsibility. co
provinces are front and centre in the pr and centre provinces are front Canadian current of heart the to citizens, at social services services that are The federal government is in concerns. examp through its spending power. For t systems education to undertake wh expanded their ambitions provincial societies. pr Canadian Regardless of the reasons, taxes significant activities. corporate On the revenue side, levy income taxes, they welland sales taxes as as royalties on to gaming revenues that O have access research funding and some student the in this importantindisputably locusnal authority area. of constitutio The provinces control labo bureaucratic machines expansionist andbureaucratic advocates of become powerful other words, In provincial authority. provincial power and autonomy. (Cairns, 1977) Once established and established autonomy. 1977) Once armed and provincial power (Cairns, powers, provinc with significant
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The purpose of this analysis is straightforward. It dovetails with the points already made about the importance of the provincial legislative assemblies. It also expands that point by noting that provincial governments undertake meaningful service delivery and policies. The combination is therefore potent. Put simply, provincial legislatures undertake important activities in governments that are central to citizens’ concerns and needs. It follows that the wellbeing of many Canadians is heavily shaped by the decisions of provincial politicians. Canadians should care a great deal about the quality of people that represent them. Public policies should be undertaken that provide positive incentives for qualified persons to pursue elected public office in the provinces.
The Future of Democratic Legislatures Legislatures will continue to play important roles in Canadian government. For two reasons they will likely become more important. First, stronger legislatures are required to tame the excesses of majority governments between elections. For many reasons, the Canadian political executive, as primarily manifest by the prime minister and premiers, has assumed particular prominence in post war politics. Many Canadians now think that executive dominance has gone too far and that greater responsiveness between elections is required. Stronger legislatures are essential to taming leader-dominated majority governments.
Legislatures may become more prominent for a second reason. As mentioned earlier, Canadians, and citizens of other established governments, are often cynical about government. Participation rates have dropped and politics are held in low regard. Young people are disconnected. Canadians’ interest in politics must therefore be rekindled. More effective legislatures are key to that end.
Reforms are already occurring. For example, Prime Minister Martin felt strongly about Parliamentary reform. During his minority government in 2004-6, Martin
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appendix F t r Appendices | Appendices | options, options, May 2012 Repo ers to support the ent of legislatures legislatures of ent (Lovink, 1973) That is, they (Lovink, 1973) , the government to report government’s proposed proposed government’s ent members to vote as they saw fit. ent members to vote only require minist ral policy options. After first reading, first After ral policy options. the government party to vote with the vote to party the government ent bills in the House of Commons to the House in of Commons bills ent g with a revised bill. The to g idea is would the role lessen correspondingly them, represent them, if necessary, to better c of these important procedural changes c of these important procedural much earlier involvem 15 ion. would make legislatures more It of action. Such a of action. system would give tees and would provide citizens with would provide citizens tees and ive committees after first reading. reading. first after committees ive a bill, the a bill, would not fall. government procedure, important government bills government bills procedure, important be “white papers”. be “white with members of other parties. with members of other parties. izens earlier in law making and to provide options for options and to provide earlier in law making izens then, having consulted then, having consulted citizens that would then proceed to second readin that would then proceed involve legislatures and cit not a predetermined course discussion commit stature to legislative enhanced seek public input and public seek participat opportunities for meaningful important and parts in the policy process ministers. and servants civil of confidence motion. and(Aucoin that relaxed the confidence introduced measures Turnbull, wanted2003) That is, he votes on governm would be of government bills procedures. Only a minority be done by different “confidence votes” of that oblige members MPs more autonomy, to allow is to give Such party discipline. reforms interests and as noted, to weaken constituents’ who aremay lead to MPs who also less partisan and who t, are more independen collaborate to willing more are envisions the Another desirable reform
government. Other government bills would bills government Other government. other governm allowing thereby government were done as “free” votes all members would be where Thirdly, more bills discipline. The logi party removed from Under this making process. in the law would routinely Government bills sevewould define the problem and suggest would then examine the a legislative committee More importantly, if defeated on such if defeated on More importantly, legislat to referred be routinely would REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
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Finally, a case can easily be made for larger Canadian provincial legislatures. (Carey, 2006) Such an argument runs counter to much current opinion that holds politicians and politics in low regard. In 2012, many citizens seem to want fewer politicians. Regardless, larger legislatures merit consideration. First, larger legislatures are required if members are to better control governments and hold them to account. In small legislatures, Alberta’s being a good example, more than a quarter of the members are in cabinet. Other government members perform various roles for the government. Government backbenchers and opposition members are too few in number to examine properly multi-billion dollar health care budgets to cite an example. In other words, citizens who dislike and distrust governments and who want less government should really support larger legislatures. Their insistence on small legislatures, in the Alberta and Canadian contexts, gets them strong governments that legislate and spend in the face of little sustained opposition. Larger legislatures also allow greater specialization by members especially when members have long service. That effect is magnified when legislatures operate through strong, specialized policy committees.
Conclusion: This submission has reviewed the roles of legislative assemblies in modern democracies. It concludes that legislatures do things that really matter. They shape legislation, represent citizens’ views, control governments, reveal maladministration, educate public opinion and solve constituents’ problems. In short, legislatures are central to modern democratic government.
By the same token, Canadian provincial governments do important things. They preside over booming, resource economies. They provide such essential public services as health care and education. They build roads and other forms of infrastructure that make our lives easier and strengthen the economy.
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rd 3 May 2012 Repo 35, #4. 46, #4, Winter 2003. Winter 46, #4, In Rhodes, R.A.W., Binder, In Rhodes, R.A.W., mocratic Deficit: Paul Martin and ners: Canadian Political Parties as Societies of Canadian Federalism”. private lives are impacted by public private lives are impacted rd University Press.
17 10, #4. the main deserve compensation that deserve the main The Oxford Handbook of Political of Political Handbook The Oxford MLAs is a matter of consequence. is a matter It also MLAs Yale University Press: London and New Press: Yale University Democratic Government and Politics. Politics. and Government Democratic REFERENCES Canadian Journal of Political Science, Science, of Political Journal Canadian Canadian Public Administration. Administration. Public Canadian “Legislative Organization.” “Legislative Organization.” On Democracy. Democracy. On New York and London: Oxfo 2002. “The Politics of Tecumseh Cor Politics of Tecumseh 2002. “The oin, Peter and Turnbull, Lori. 2003. “The De oin, Peter and Turnbull, Haven. edition. Toronto: University of Toronto Press. Press. of Toronto University edition. Toronto: Dahl, Robert. 1998. It therefore follows that the quality of that the quality It follows therefore reflects the importance contribution of their roles. their unique and C. 1977. “The Governments and Alan Cairns, Science. of Political Journal Canadian
follows that MLAs, whose who work hard, are well motivated in service and who Auc Reform”. Parliamentary 2006. M. John, Carey, Sarah A. and Rockman, Bert A. (eds.), Institutions. Carty, R.K. Organizations.” Franchise J.E. 1959. Corry, J.A. and Hodgetts, REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
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Dawson, R.M. 1970. The Government of Canada. 5th edition revised by Norman Ward. Toronto: University of Toronto Press.
Howe, Paul. 2010. Citizens Adrift: The Democratic Disengagement of Young Canadians. University of British Columbia Press: Vancouver and Toronto.
Lovink, J.A.A. 1973. “Parliamentary Reform and Governmental Effectiveness in Canada.” Canadian Public Administration, 16, #1, Spring 1973.
Smith, David E. 2007. The People’s House of Commons: Theories of Democracy in Contention. Toronto: University of Toronto Press.
Smith, Jennifer. 1994. “Legislatures” In Pocklington, T.C. (ed.), Representative Democracy: An Introduction to Politics and Government. Toronto: Harcourt, Brace and Company.
Stevenson, Garth. 1977. “Federalism and the Political Economy of the Canadian State.” In Panitch, Leo V. (ed.) The Canadian State: Political Economy and Political Power. Toronto: University of Toronto Press.
Stone, Bruce. 1995. “Administrative Accountability in the ‘Westminster Democracies’: Towards a Conceptual Framework”. Governance, 8, #4, October 1995.
Sutherland, S.L. 1991. “Responsible Government and Ministerial Responsibility: Every Reform is Its Own Problem.” Canadian Journal of Political Science, 24, #1, March 1991.
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G Dr. David Docherty’s written submission
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appendix G t r Appendices | Appendices | May 2012 Repo eir services you wind up with individuals wind up you individuals with services eir e. In Alberta the size of the assembly, ofthe size the Alberta In e. capable members of the legislature we we legislature of the members capable ly one representative. We would elect that Wethat elect would one representative. ly an arrangement comes at a cost. A single single A a cost. at comes arrangement an d initiatives. We recognize that neither of neither We that recognize d initiatives. ate (or even public) sector, neither should should neither sector, public) even ate (or tives. When or large of council, tives. members this way, on one extreme we might simply simply might we extreme on one way, this elds of business that one gets what one one what gets one that business elds of those for whom the modest token is token modest the whom for those ive than either extreme yet farmore yet extreme either than ive part of a larger recruitment and retention retention and recruitment larger a of part onsider a stint in office, the salary ofa salary the office, in a stint onsider ive form of government, but the least least the but government, of form ive ould be less expensive than our present present our than expensive be less ould ible voters represent their own particular own their ible voters represent unelected representatives. Indirect Indirect representatives. unelected Diverse and representative assemblies should should assemblies representative and Diverse s are in the lower end of salaries across the country though much closer much though country the across salaries of end lower the in are s ಬ also reflect a diversity of occupations. While salaries of elected members cannot cannot members elected of salaries While of occupations. diversity a also reflect priv of the salaries highest the with compete public contemplating even before away individuals good drive they that low be so they service. a take members cases many that in do know we However, election. post to and prior office. leaving The salaries upon cut additional an and office entering cut when salary of income knowledge detailed officials lack of public levels of income Studies of Alberta MLA to the middle when the tax free allowances are included. It is recommended that that It is recommended are included. allowances free tax the when middle to the extremely important. Neither are truly reflective of the population. reflectivethe of truly are Neither important. extremely strong and retain attract both to In order fiscal sacrifice. a member represents important considerations at work. Thinkof it at work. considerations important choose to consider the entire province with on with province entire the consider to choose or honourarium the need not do either who of members many for that Wemust recognize appropriately. them compensate to need c might that others for and legislature, the person to govern and represent all of us for four years. At the other extreme we might might we extreme other At the years. forfour of us all represent and to govern person all elig where democracy assume direct an referenda set of an unending interests via for to pay price financial is a there while that We understand must democratic. paying. price worth it is a democratic representation as regarded must be Salaries Principle 2. for strategy legislators. fi many in used argument simple is a There profession. some In other foris any it as s official forelected Thisas true for. is pays to attempts deliberate of outcome the inevitable seen have we in Canada jurisdictions of representa belittle occupation elected the for th honourarium only are given boards school term limited dictatorship the latter mass mass latter the dictatorship term limited former being the work, would extremes these chaos and confusion. provinc ofthe geography the and population the understanding of an reflects that a number select and compromise we So instead expens is more democracy representative 83 means one MLA for every 45,000 voters. Such a size means that members cannot cannot members that means size a Such 45,000 voters. every for MLA one means 83 assistance require in thus and constituents, of their all with contact daily in be all only not provide elections that means also It duties. representative their performing who MLA's those also but legislation, implement and introduce who members cabinet accountable. the cabinet keeping with are tasked that such recognize must also we But in authority an too great put but system representative would be the least expens least the be would representative w referenda via Government democratic. REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
salaries be closer to the three larger provinces in terms of population, namely Ontario, Quebec and British Columbia. This would necessitate an increase in salaries.
Principle 3: The Alberta Legislative Assembly is a full-time professional representative assembly and thus requires full professional legislators.
There was a time when provincial legislatures could at best be considered part-time amateur bodies. Members were not paid as full time legislatures, the Assembly did not sit for more than a few weeks per year, and the resources provided to members were minimal. Beginning in the 1970's provincial bodies began to sit longer, deal with more legislation, and as governments grew larger began to hold more responsibility for oversight. At the same time, more and more voters turned to their local MLA to assist in dealing with and increasingly large and complex government. Members saw demands on both their representative and scrutiny role increase dramatically. Likewise, members of cabinet were required to become greater policy experts within their areas of jurisdiction. One of the outcome of this growth was the professionalization of the legislative assembly, and a realization that members were full time representatives that ran small offices. The demands facing cabinet ministers were even greater. Of course different legislatures developed at different times and speeds. Quebec and Ontario were among the countries leaders in recognizing that in order to properly perform its collective task an assembly needed to appreciate the professional role played by members and the resources this required. By contrast Alberta was slower to enter the era of professionalization. Among other things this meant that Alberta was: slower to have Hansard, had a weaker legislative committee system, and to this day retains an antiquainted salary system that includes a tax free allowance. Some of these anomalies can be addressed by this commission, others lay outside its jurisdiction. Salaries fall within the purview of this commission and I would encourage the commissioner to include committee allowances as part of that salary structure.
Principle 4: The often volatile career longevity of elected officials requires that transition packages must also be considered part of the compensation package.
Principle 5: Pensions must be reasonable but must also recognize the opportunity cost of elected service.
If there is one area of member's compensation that draws more public ire than any other it is the financial exit packages that members are provided. Variously and pejoratively referred to as golden parachutes and gold plated pensions, the exit packages include transition funds to assist former members in moving back to their pre-
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appendix G t r Appendices | Appendices | May 2012 Repo ent forthan those ministerial sionally billion) dollar enterprises. In the the In billion) dollar enterprises. sionally ter in the constituency. And until recently recently And until ter in the constituency. e on private boards, or invitations to step to step invitations or boards, private e on ize that the position requirements for requirements position that the ize n to increasing the age at which age members the n to increasing me form. Members serve at the pleasure pleasure at the serve Members form. me Minister of Health will not earn more than than more earn not will ofMinister Health t when members are in their late thirties. thirties. late their are in members when t four to twenty years did not matter, this is matter, not did years twenty to four that the present system of pensions and and of pensions system present the that at a later stage than individuals commence commence individuals than stage a later at irement for University Presidents. Doctors Presidents. for irement University 0.00 (approx) that Alberta cabinet ministers ministers cabinet Alberta that 0.00 (approx) and are not always relevant, given the the relevant, given always not are and in the private sector. Still, I would recommend recommend would I Still, sector. private in the hat they will not earn more than some some than more earn not will they hat rporations would command commensurate commensurate command would rporations er of Advanced Education may or may not may or may Education Advanced er of r health care, are very differr health are care, very ty forty planning). career can be financially challenging. challenging. financially can be individuals for whom they are responsible. they for whom individuals members. private of those to addition responsibilities in have Crown Ministers of the multi-million occa (and for are responsible They of the public. While their jobs are rarely up for a review on an annual basis, they are they basis, on an annual a review for While jobs up are rarely their public. of the vo eligible every basis by on a regular reviewed commissionthe that serious consideratio give of year one to allowance transition maximum the limiting and pensions collect can salary. Principle 6: t recognizing in also but ofresponsibility level their reflects that manner a in must compensated be Crown of Ministers the co of similar sized sector, CEO's private $63,90 additional the beyond salaries, well a that the anomaly Wemust recognize earn. As mentioned above members often leave more lucrative positions to serve the public, the public, serve to positions lucrative more leave often members above As mentioned of so include pensions typically that positions will periods election (fixed departure their of date to control the ability little had members opportuni some greater provide servic sinecures, for government opportunities last careers if the previous back their into as unlimited have members departing that wisdom perceived a despite Second, for only reserved typically and rare are opportunities Such rule. the not exception the government on both the members Private . government of the members senior most the the a result, As such invitations. rarely receive the speaker of side opposition and transition to non-elected life by is nor not appreciated understood transitions allowances well public. the sector abound private the to Comparisons apparent also is it this, noted Having levels at senior salaries higher generally Advanced The Minister of administrators. hospital and specialists doctors, many University and or senior College professors some than earn less will Education Administrators. fo and and Universities colleges mustalso recogn time, we At the same elected careers. While the exit packages may be viewed by the public as overly overly as the public by may be viewed packages While exit the careers. elected compensation a a necessary is part of pension and fund transition some generous, for package members. career their begin often They careers. their over control little very have members that assembly must recognize we First, other careers. Typically, political careers political star Typically, other careers. requ Ph.D's degree normal service. are the are, by definition MD's. Yet the Minist the Yet MD's. definition by are, require not does Minister of Health the and designation University or a College possess REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report
a Medical degree or health designation and may well have never worked in the health care field (or spent any time in a hospital for that matter). Thus is the anomaly of elected representation. The responsibility of Ministers is to initiate, implement and oversee the delivery of public policies. This requires a talent that is broader than any one policy field. The responsibility is vast, the skill set different. It is recommended that Ministers continue to receive additional compensation. Any changes to base pay should have equivalent increases in cabinet pay.
Principle 7:
Salaries and allowances must be transparent. Changes to the salary structure may require substantially higher salaries.
Alberta is one of the few provinces that retains a tax free allowance as part of the renumeration package for members of the legislative assembly. This anacronistic practice dates back to the time when members were responsible for many of the business expenses that are now covered by the Legislative Assembly. Further, like pensions and transition pay, it is the cause of some consternation among the public. Unlike pensions and transition pay, there is little legitimate reason to retain this practice. It is recommended that the Commission eliminate the tax free allowance. However, the elimination of tax free allowances must not be used to lower the overall compensation of members. It should be replaced with a taxable equivalent. This will result in substantially higher salaries. However, it would be a more honest and transparent practice and will keep Alberta in line with most other jurisdictions.
Principle 8: Salaries and allowances should not be used to compensate for a lack of legislative influence of the legislative assembly.
In many jurisdictions, additional salaries are used to recognize the additional work that some members take on as public officials. Ministerial salaries are perhaps the best example of this. But there are many others. Parliamentary Assistants receive additional income, as do chairs of legislative committees. These additional salaries might also be used to make certain positions more attractive. While some members might be drawn to cabinet by the additional 63,000, it is more likely that the opportunity to influence public policy is a far greater draw. The same might not be said for parliamentary assistants and committee chairs. I would urge the commission to recommend that committee chairs receive a substantial allowance that is considered additional salary to legislative committee chairs. I would further recommend that this salary be similar to that of Ministerಬs without portfolio (approximately $28,000). This would encourage many legislators to consider a parliamentary career over a cabinet career. The work of legislative committees has long been neglected in Alberta. As such members are paid a per diem rate to serve on
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appendix G t r Appendices | Appendices | May 2012 Repo nger leadership by committee chairs, are committee by who leadership nger committees as part of their overall overall ofas part committees their committees. I would urge the commission to eliminate the per diem for committee committee for per diem the eliminate to the commission urge would I committees. on service see Members should service. stro Further, as legislators. responsibilities some provide portfolio should without to Ministers similar a rate at compensated path. this career follow formembers to incentive
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H Raymond Speaker’s written submission
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I Dr. Herbert Grubel’s written submission
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J Hay Group Report
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May 2012 Repo
y y Jan Kenned Jan April 2012 April
Herb King Herb
Christopher A. Chen A. Christopher Compensation and Benefits Review Review Benefits and Compensation
ebr fteLgsaieAsml fAlberta of Assembly Legislative Legislative the the of of Members Members Alberta of Assembly
rprdby Prepared Prepared : : by REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 1 41 45 , Cabinet Role Salaries and Other Jurisdictions Other Jurisdictions Allowance; First Minister, Speaker - ...... 6 ...... 19 Allowance ngs ...... 34 – Jurisdictions Other ...... 4 Valuation Methodology Organizations ...... Transition Sector ...... 2 Key Findi Mandate Methodology nalysis Private Sector Organizations Member Transition Allowance - - roup ... D H ...... Appendix -A Interview with MLAs Appendix -B Government Organizations -Appendix C Organizations Broader Public Sector Appendix D -E Appendix Benefit Noncash -F Appendix PrevalenceAnalysis Benefits Appendix G - Member Indemnity & Expense Appendix H Appendix I – Member Pensions Appendix -J Long-Term Incentive valuation(LTI) s t • • • • • • • • • • en Appendices t . 01. About Hay G 02. Background and 03. Introduction and 05. Observations and 06. Summary 07 04. Compensation A on Ctt C © 2012 Hay 2012 Hay ©Group. All Rights Reserved
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 2 t r About Hay Group Hay About Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 3 d e t s suppor i ht g i ns i ur O es. i r t the private, public and not-for- and public private, the coun of our research and the intellectual 49 y we do it in the most efficient way to the most efficient way it in do we n i ualit that works with leaders to transform q qy ces ffi o to actionable insights.our clients We give 86 and represent diverse business challenges.business represent diverse and For ganize people to people ganize more be effective motivate and n i ng cus is onmaking cushappenis change and helpingpeople and ki ountries.are from Our clients oyees wor l roup emp G ay 2600 H ears, we have been renowned for the t y ou ave over ave h Ab t H G e © 2012 Hay 2012 Hay ©Group. All Rights Reserved organizations realize their potential. them to perform at their best. Our fo on their organization, and breakthrough perspectives achieve the desired results. Hay Group Hay a is management global firm consulting talent, or strategy into reality. We develop W h 2600of our work.rigor We transform research in l ki i 86 ffi i 49 t i O i i ht i t d by robust data from over 125 c by profit sectors, across every major industry, 70 almost
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 4 t r Background and Mandate and Background Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 5 MLAs’ benefit provisions with prevalent with benefit MLAs’ provisions ions and their and ions the against compensation or groups e t t a d an e compara M th n & ithi d ons w i s i i ithi th t groun k Job evaluations for MLA roles benchmarking of Competitive these posit to the compare analysis prevalence Benefits prov comparator groups ac ined by the Honourable J. C. Major to J. C. Group Limited (“Hay Group”) Hay the Honourable has been reta ined by comparative data in regards to t he compensation and benefits for Members of provide the Legislative Assembly of Alberta (“MLAs”). This review includes: report sets out our methodology and observations This B k d&M d t © 2012 Hay 2012 Hay ©Group. All Rights Reserved
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 6 t r Introduction and Methodology and Introduction Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 7 that size d the , ng an ti challenges taken ca i and decisions commun d problems and the ge; an of d e l cludes practical, specialized, and criteria found in all jobs. In general the job; specifically this factor this the job; specifically actions is required to analyze and resolve now for k ng ility for actions and decisions taken the size as the Hay Group Guide Chart Profile Guide Group Hay the as complexity ti and egra ogy t l n i o d accountability d , nature o th ng an i the e z i M authority d measures ng, organ ng, i making The application of application The that know-how Measures the output or end results of results end or output the Measures on an ann l ti factor ; p ; Knowledge, skill and ability required, and in uc kill this decision to assess job size based on a set of universal job size to assess d s l SM ro ca i t n n h ItI d ti dMthdl © 2012 Hay 2012 Hay ©Group. All Rights Reserved ec terms the criteria are: are: criteria the terms Know-how: Hay Group Limited uses a methodology known Group Limited uses Hay Method thilkilllt problems; this factor measures the nature i and complexity of the problems and challenges that measures decision making authority ii accountab dit tik ld d iti d influencing skills. Problem Solving: jobs must face in the effort to achieve end results. end effort the achieve in to face must jobs Accountability: the measured impact role has on end results. the role, and by influenced of the world
J160 | Appendices 161
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 8 t r
Appendices | Appendices |
May 2012 Repo up”. goes pay
aito sdrcl ikdt o size job to linked directly is is variation variation rsae nsrihfradterms straightforward straightforward in in stated stated or or – – size job to linked directly , bigger bigger get get jobs jobs as as “ , terms
performing radically different work in very di very in work different radically performing fferent industries. A considerable amount of pay pay of amount considerable A industries. fferent
levels of Know-How, Problem Solving and A and Solving Problem Know-How, of levels ccountability even where such jobs might be be might jobs such where even ccountability
In overview terms, this approach allows for co for allows approach this terms, overview In mparing compensation of jobs requiring similar similar requiring jobs of compensation mparing
which was of particular benefit in this study. study. this in benefit particular of was which
Sourcing data by points also provides the means the provides also points by data Sourcing to analyze market data for very unique jobs, jobs, unique very for data market analyze to
sourcing data by points is a more reliabl more a is points by data sourcing e and accurate approach than job matching. matching. job than approach accurate and e
vlainpit osplmn oeuuljbmthmtos o h aoiyo jobs, of majority the For methods. match job usual more supplement to points evaluation evaluation methods. match job usual more supplement to points jobs, of majority the For
and sectors, there is the ability to compare t compare to ability the is there sectors, and he compensation of jobs of compensation he on the basis of job job of basis the on
assesses jobs relative to these criteria quite quite criteria these to relative jobs assesses consistently across jobs across consistently , organizations, industries industries organizations, ,
and is used by more than 8,000 organizations organizations 8,000 than more by used is and in more than 40 countries. As Hay Group Group Hay As countries. 40 than more in
Hay Group’s job evaluation methodology is the mo the is methodology evaluation job Group’s Hay st widely used methodology in the world, world, the in methodology used widely st
tdt dMthdl an on ti ti uc d d ro t n It I ogy l o d o th e M d (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 9 to endix best pp pp who and rovided in the in rovided A p problem the of nature the serious advocacy responsibilities on behalf of responsibilities advocacy serious (cont’d) on a wide range of proposed legislation. on a wide government. While the MLA need not know all government. the MLA need not know While MLA with problems that can originate from any ly responsibilities also require considerable ogy l o from are our MLA interviews understand d to o th e enough M d know on an must ti they uc d ro t details, n ItI d ti dMthdl © 2012 Hay 2012 Hay ©Group. All Rights Reserved issues that must be dealt with on an ongoing the breadth of issues is feature of the MLA role key A basis. The knowledge breadth comes from their the details, they must know enough to understand the nature of the problem and who best to A. their constituents. Constituents come to provincial department as well as from outside knowledge breadth as MLAs debate and vote knowledge themes overall Some observations and contact to contact the resolve Assemb Their issue.
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 10 t r
Appendices | Appendices | and additional accountability. accountability. additional and
May 2012 Repo
This managerial shift increases the requirement the increases shift managerial This for managerial skills, deeper problem solving solving problem deeper skills, managerial for
control activities. A simple analogy is a shi a is analogy simple A activities. control ft from being a musician to becoming a conductor. a becoming to musician a being from ft
responsibility shifts the role towards a gr a towards role the shifts responsibility eater focus on planning, directing, organizing and and organizing directing, planning, on focus eater
the Party Whip, House Leader, then Minist then Leader, House Whip, Party the er and ultimately Premier. Management Management Premier. ultimately and er
mana pg y p res erial g g g chairin includes that ression g ro p a with y onsibilit p Committees to roles like like roles to Committees g
From the Private Member role, responsibilities responsibilities role, Member Private the From tend to increase with the addition of greater greater of addition the with increase to tend
was assessed at executive tier decision decision tier executive at assessed was making and supportive to a large population. large a to supportive and making
taei n uooost eonz t mato h dpino eilto.Accountability legislation. of adoption the on impact its recognize to autonomous and and strategic strategic adoption the on impact its recognize to autonomous Accountability legislation. of
a constituency office as well as human relati human as well as office constituency a ons skills. Problem Solving was assessed as as assessed was Solving Problem skills. ons
about one area). Additionally, the MLA role require role MLA the Additionally, area). one about s skills to plan, organize, direct and control control and direct organize, plan, to skills s
little bit about a great many areas (as opposed opposed (as areas many great a about bit little to knowledge depth or having to know much much know to having or depth knowledge to
The MLA role was assessed as requiring high k high requiring as assessed was role MLA The nowledge breadth, that is, having to know a a know to having is, that breadth, nowledge
tdt dMthdl an on ti ti uc d d ro t n It I ogy l o d o th e M d (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 11
a a
in in
or or
a
business of
of business
Deputy
Director Director sales
CEO of
Deputy a
Manager Manager
lines
in
department
lines Sectors
Mine Mine two
Assistant le
a a
p p or Resources Resources
subsidiary; as as
provinces Other Manager
organization;
one
or Dean; multi
of
department such such government
Human Human
from with a large
with
a
Account
College division
number of
Roles a
within
Solicitor; Solicitor; operation operation
in large
government
anization department
a g g
National Officer
organization
or Manager; of
larger larger Expert Expert
Example division large e
a a g
a a
business sized
of of
lar
of of
a Principal;
General
Operating government
President of doing
ample MLA jobs within each band, each within jobs MLA ample and
(cont’d) or bands based on job size. The following The size. job on based bands or and Manager environment; large Retail Vice Minister CEO Chief School Minister moderate
the ogy
l
of
o d Committee Committee
o Leader
th Recognized Roles
a Leader, Leader, e
of Government)
Speaker,
MLA
M House House
d and/or Leader
Portfolio, Example
Party
with
Opposition Opposition Opposition Speaker,
(Assembly on an
ti Chair Official Deputy Minister Opposition Premier Official MLA uc
d 4 3 4 2 1 5
Level ro t Band Band Band Band Band n ItI d ti dMthdl © 2012 Hay 2012 Hay ©Group. All Rights Reserved Hay Group developed 5 MLA groupings of jobs 5 MLA groupings Group developed Hay reference-level jobs from other sectors. jobs reference-level provides the recommended bands, along with ex with the recommended bands, along provides
J164 | Appendices 165
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 12 t r Appendices | Appendices |
May 2012 Repo
a reasonable comparator. comparator. reasonable a
Zealand’s population and GDP are similar to Alber to similar are GDP and population Zealand’s ta’s and we believe New Zealand provides provides Zealand New believe we and ta’s
ersnaie,w eiv hscomparis this believe we representatives, representatives, nhlsmrtfrteAbracnet New context. Alberta the the for for merit merit holds holds on comparison this believe we New context. Alberta
number of years ago. While the New Zealand proj Zealand New the While ago. years of number ect focused on evaluating nationally elected elected nationally evaluating on focused ect
evaluation against Member of Parliament evaluat Parliament of Member against evaluation ions that were carried out in New Zealand a a Zealand New in out carried were that ions
evaluations were being made for this effo this for made being were evaluations rt, Hay Group also compared the proposed MLA MLA proposed the compared also Group Hay rt,
As part of our quality assurance process and to and process assurance quality our of part As ensure that the most appropriate reference reference appropriate most the that ensure
tdt dMthdl an on ti ti uc d d ro t n It I ogy l o d o th e M d (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 13 LTI plus Non-Cash Benefit plus Target Annual Bonus); plus (cont’d) following compensation elements for MLAs: (The present value of LTI grants, expressed (The present value of LTI as a ion has been compared to market median. ogy Target Total Cash Compensation l o d o (Target Total Direct Compensation th e M d on an ti uc d ro Value) Base Salary; (% of Base Salary); Target Short Term Incentives/ STI Target Total Cash Compensation (Base Salary Term Long Opportunity/ Incentives LTI Salary); Base of % Compensation ( Target Total Direct Opportunity) Non-Cash Benefit Value Target Total Remuneration t n The compensation review will evaluate the purpose, illustrative For compensat MLA ItI d ti dMthdl © 2012 Hay 2012 Hay ©Group. All Rights Reserved
J166 | Appendices 167
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 14 t r
Appendices | Appendices |
00MLA 1000 5 Band
Government) and/or (Assembly Chair Committee
May 2012 Repo 1300
Leader House Opposition Official 4 Band
Party Opposition Recognized a of Leader
2000
Speaker Deputy 3 Band
Opposition Official the of Leader
Speaker 3000
Portfolio with Minister 2 Band
er i rem Pi P 5872 5872 1 1 d an Bd B
Points Hay Level Roles MLA Example
band.
o ieTefloigtbedtistercmeddbnsadHyPit o each for Points Hay and bands recommended the details table following following The The . size size job job recommended the details table Hay and bands each for Points
As mentioned earlier, we have developed 5 5 developed have we earlier, mentioned As MLA groupings of jobs or bands based on on based bands or jobs of groupings MLA
tdt dMthdl an on ti ti uc d d ro t n It I ogy l o d o th e M d (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 15 f o t s li or a f li t f D & C , B x de a sense of sense a de MLA di ppen A s from the Broader Public Sector market or and quasi-public sector organizations (cont’d) s and will serve as a reliable source of s and will composed of privately owned and publicly and owned privately of composed ease see compensation data for MLAs in other (Pl r, Hay Group has benchmarked selected benchmarked has Group Hay r, ogy l o d o or groups. th t e M d compara 3 ass 3 levels of Government t p ns i on an ti uc es aga es l d that encom traded organizations ro 3.–Market Sector Private market Abroad 1.–market Government Selectedorganization 2.market – Broader Public Sector Public sect ro t n organizations within these comparator groups) As agreed by the Honourable J. C. Majo the Honourable agreed by As MLA l i t 3 t (Pl A di B C & D Hay Group believes using these comparator groups will provi compensation levels across the three sector of compensation for MLAs. of the appropriateness information for assessment of May 2011 Group market data are as Hay All available gathered publicly Group has Hay the examined has and of compet itiveness for compensation jurisdictions Alberta MLAs ItI d ti dMthdl © 2012 Hay 2012 Hay ©Group. All Rights Reserved
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 16 t r
Appendices | Appendices |
Data provided by the Legislative Assembly of Alberta of Assembly Legislative the by provided Data
2501$0,4 2785$0,4 1791$7,2 1159$4,3 $137,933 $143,933 $151,529 $172,325 $157,901 $207,845 $207,845 $201,449 $225,041 Salary Base
4,9 3,0 4,0 4,0 2,0 4,0 3,0 4,0 $36,000 $42,000 $36,000 $42,000 $24,000 $42,000 $42,000 $35,604 $41,796 Allowance lieu In Allowances/ Committee
Allowances Members'
May 2012 Repo Special
8,1 6,1 6,1 6,1 3,6 2,9 $13,596 $28,392 $31,968 $63,912 $63,912 $63,912 $81,312 ‐‐
Indemnity/ Additional
All All RRSP RRSP 1 225 225 , $11 $11 225 225 , $11 $11 225 225 , $11 $11 225 225 , $11 $11 225 225 , $11 $11 owance 1 225 225 , $11 $11 225 225 , $11 $11 225 225 , $11 $11 225 225 , $11 $11
allowance) free ‐ tax up grossed (includes
9,0 9,0 9,0 9,0 9,0 9,0 9,0 9,0 $90,708 $90,708 $90,708 $90,708 $90,708 $90,708 $90,708 $90,708 $90,708
Allowance and Indemnity MLA
Government)
Party
Opposition and/or Leader House
Speaker Portfolio Opposition
Official Speaker (Assembly Opposition MLA Premier roles MLA Sample
Deputy with Minister Recognized
the of Leader Chair Official
a f f o er d ea Ld L
Committee
1 Band 5 Band 2 Band 4 Band 3 Band
have used in our compensation analysis. analysis. compensation our in used have
spr fbs aayTefloigtbedtistebssfrMLAs for basis the details table following The salary base of part part as as basis the details table following The . salary base of we we salary salary base base ’ MLAs for
Government) Allowances and allowance in in allowance and Allowances Government) lieu of Committee Allowances are included included are Allowances Committee of lieu
Additional Indemnity, Special Members’ Allowance, Committee (Assembly and /or /or and (Assembly Committee Allowance, Members’ Special Indemnity, Additional
of this analysis, MLA indemnity, grossed up up grossed indemnity, MLA analysis, this of MLA tax-free allowance, RRSP allowance, allowance, RRSP allowance, tax-free MLA
MLA compensation consists of MLA Indemni MLA of consists compensation MLA ty and various allowances. For the purpose purpose the For allowances. various and ty
tdt dMthdl an on ti ti uc d d ro t n It I ogy l o d o th e M d (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 17 which in years calendar three the on have assumed a career span of 8 years wance is included as a non-cash benefit non-cash a as included is wance (cont’d) based hen they leave office, which is equal to equal is office, leave they hen 3 which ation for Legislative and government and ation for Legislative is age monthly age MLA includes salary indemnity ion allowance on their total remuneration. ion allowance a severance payment; severance a how examined have we ogy l o salary d compared to market practices. o th e monthly M d average on an The ti . uc d ro For purposes of purposes For we analysis, compensation for the impact of transit to account nature in similar is to allowance This transition allowance the MLAs’ for MLAs and the annualized transition allo for MLAs and the annualized t n and tax-free allowance, RRSP allowance, remuneration for offices other than MLA, other than remuneration for offices allowance, RRSP tax-free allowance, and special Members’ allowance and remuner MLAs also receive a transition allowance w for months salary each year served. Aver committees The average monthly salary is based on the three calendar years in which the person received their highest salary. highest their received person the ItI d ti dMthdl © 2012 Hay 2012 Hay ©Group. All Rights Reserved
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 18 t r Appendices | Appendices |
May 2012 Repo
assessment of the appropriateness of benefit provisions for MLAs. for provisions benefit of appropriateness the of assessment
l htii ilfft f ti fif libl id thtthi bli G ay H H e source o source e bl a li re a es id prov s thi t a th eves li e b roup G or f on ti orma f n i f
presented in Appendix F. Appendix in presented
Benefit prevalence for Government Organiza Government for prevalence Benefit tions and the Broader Public sector is is sector Public Broader the and tions
fteNnahBnft auto Methodology) Valuation Benefits Noncash the the of of . Methodology) Valuation Benefits Noncash
Hay Group’s methodology (Please refer to Appendix E for a more detailed explanation explanation detailed more a for E Appendix to refer (Please methodology Group’s Hay
(group benefits, retirement benefits and employ and benefits retirement benefits, (group ment perquisites) are calculated using using calculated are perquisites) ment
benefits in this report. In simple words, cash equivalent values of benefit programs programs benefit of values equivalent cash words, simple In report. this in benefits
Hay Group’s Noncash Benefits Valuation Valuation Benefits Noncash Group’s Hay Methodology was used to value noncash noncash value to used was Methodology
tdt dMthdl an on ti ti uc d d ro t n It I ogy l o d o th e M d (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 19 Compensation Analysis Compensation © 2012 Hay 2012 Hay ©Group. All Rights Reserved
J172 | Appendices 173
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© 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 20 t r
1 25% of data of 25%
Appendices | Appendices |
2
Percentile 25 P25/
th th 0 fdata data of of 50% 50%
3
4
5
Percentile 50 Median/ / P50
th
May 2012 Repo 6
75% of data of 75%
7
50% of data of 50% 8
9
10
90% of the observations are above and above are observations the of 90% observations are below the MLA’s compensation MLA’s the below are observations the of 10% than less
lowest 25% values. “ lowest 50% values; it indicates the mi the indicates it values; 50% lowest des the top 75% and the the and 75% top the des divi Percentile 25th or P25 data. all of position ddle Note: Data is rank-ordered to calcul to rank-ordered is Data Note: or 50th Percentile divides the top 50% and the the and 50% top the divides Percentile 50th or (Median) P50 percentiles. ate percentiles, where available. where percentiles, , 25 25 ecnie ftemre aaa ela h 10 the as well well as as , data data market market the the of of percentiles percentiles 75 75 and and , 50 50 90 90 and and 10 the as th th th th th th th th th th All compensation data in the tables is pr is tables the in data compensation All esented by average and quart and average by esented ile to reflect the the reflect to ile Data is presented in tables and charts and tables in presented is Data analysis analysis compensation compensation The following section summarizes the results in Canadian dollars from the MLA MLA the from dollars Canadian in results the summarizes section following The iAli l A on ti ti ompensa C C s i ys l na A REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 21 000 , P10 94% < Total ‐ 244 , 7 244 000 Remuneration Members’ 4 Special Value 000 , P10 80% < ‐ 62,428 287,469 468 000 Indemnity, Noncash 000 Additional , P10 1 95% < ‐ Total Direct 756 , 225,041 4,595,000 321,000 4,916,000 1,848,000 179,000 2,027,000 3,623,000 243,000 3,866,000 4,854,000 313,000 5,188,000 5,419,000 404,000 5,818,000 6 756 000 Example MLA role: Premier MLA Example allowance, RRSP Compensation 3 % * * * 480% LTI Target allowance, Alberta free of ‐ tax 000 , Allowances. MLA P10 Assembly 88% Cash < ‐ Total 523 , up 225,041 1,897,000 314% 1,302,000 148% 1,497,000 229% 1,819,000 318% 2,170,000 408% 2 523 000 Committee grossed Legislative of the 3 lieu of % ctor that may be matched from Hay Group databases do not exist from that may ctor databases be matched Hay Group * * * in (cont’d) 66% 88% 120% 110% 147% 179% STI Indemnity, s i MLA Members allowance for ys 2 l and includes level level value 000 , this this P10 Salary 72% na ‐ < 169 at at , 873,000 709,000 744,000 815,000 879,000 225,041 Alberta 1 169 000 Base A Allowances noncash of plan plan a a the in have have on Assembly ti Government) which which included is 2011 and/or Legislative May the of of allowance organizations organizations as (Assembly data those those Members transition ompensa Median only Median only Organizations for data market Committee C ti A l i from from salary Sector Position include include Band 1 Group : annualized © 2012 Hay 2012 Hay ©Group. All Rights Reserved Base Hay An Data Data *Band 1 in Public *Band Broader se positions sector and the Government Insufficient Allowance, Average P10 2. P25 Notes P50 * Private Premier 1. Cdn$ P90 P75 Variance Market 3. 4. J174 | Appendices 175 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 22 t r * Band 2 positions in the Government sector that that sector Government the in positions 2 Band * may be matched from Hay Group databases do not exist not do databases Group Hay from matched be may Alberta of Assembly Legislative the of Members for ue l va noncash the in included is allowance transition annualized An 4. Appendices | level this at plan a ve ha which organizations those only include Data 3. Allowances ttee Commi of lieu in allowance and Allowances Government) Government) and/or and/or (Assembly (Assembly . Allowances ttee Commi of lieu in allowance and Allowances ttee Commi Allowance, Members’ Special Indemnity, Additional allowance, RRSP allowance, free ‐ tax MLA up grossed Indemnity, MLA includes Alberta of Assembly Legislative the of Members for salary Base 2. 2011 y Ma of as data market Group Hay 1. : Notes data Insufficient * Position Market P10 < P10 < P10 < * P10 < * P10 May 2012 Repo < 81% ‐ 59% ‐ 84% ‐ * 72% ‐ * 52% ‐ Median from Variance verage A A 159% 159% 000 000 , 769 769 75% 75% 000 000 , 435 435 9 000 000 , 499 499 , 1 1 000 000 , 141 141 000 000 , 358 358 , 1 1 P10 682,000 72,000 610,000 63% 505,000 41% 329,000 P25 892,000 99,000 793,000 85% 597,000 48% 359,000 P50 ,2,0 3,0 1,367,000 136,000 1,225,000 156% 709,000 67% 417,000 P75 ,6,0 7,0 1,939,000 170,000 1,766,000 216% 860,000 85% 475,000 P90 ,4,0 0,0 2,451,000 209,000 2,241,000 277% 1,129,000 118% 575,000 Organizations Sector Private Position Market P10 < P30 P10 < * P10 < * P10 < 42% ‐ 26% ‐ 45% ‐ * 45% ‐ * 37% ‐ Median from Variance Average 596,000 80,000 516,000 72% 436,000 40% 326,000 P10 295,000 37,000 241,000 * 241,000 9% 234,000 P25 351,000 51,000 290,000 * 290,000 15% 276,000 P50 441,000 76,000 363,000 54% 363,000 33% 322,000 P75 P75 * 000 000 , 533 533 46% 46% 000 000 , 363 363 1 000 000 , 715 715 000 000 , 101 101 000 000 , 585 585 P90 2,0 1,000,000 128,000 858,000 * 696,000 94% 439,000 Organizations Sector Public Broader Portfolio with Minister 257,582 56,133 201,449 * 201,449 * 201,449 Direct Cash Noncas % LTI % STI ue l l Va h h on i emunerat Ri R l ota Tl T 3 3 3 3 4 4 Total Total Salary Base Cdn$ 2 Compensation Target 1 Band 2 2 Band Example MLA role: Minister with Portfolio with Minister role: MLA Example iAli l A ti ti ompensa C C s i ys l na A on (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report on i 23 000 , 000 , P10 P10 40% 81% ‐ ‐ < < emunerat 499 , 892,000 682,000 596,000 295,000 441,000 351,000 265,685 715 000 Ri R 1 499 000 l ota Commi ttee Tl T 4 ue l l Allowance, Va 000 000 , , P10 h 24% 57% P32 ‐ ‐ < 99,000 72,000 80,000 37,000 57,840 76,000 51,000 128,000 1,000,000 101 000 141 000 Noncas Members’ Special 000 1 , 000 , P10 P10 43% 83% Total ‐ ‐ < < Direct 358 , 793,000 610,000 858,000 516,000 241,000 207,845 363,000 290,000 585 000 Indemnity, Example MLA role: Speaker Example MLA 1,225,000 136,000 1,367,000 2,241,0001,766,000 209,000 170,000 2,451,000 1,939,000 1 358 000 Additional Compensation 3 % * * * * * * * * * Target 85% 63% 72% 54% 156% 277% 216% 159% LTI allowance, RRSP Alberta allowance, 000 000 , , P10 P10 of 43% 71% Cash Total ‐ ‐ < < free 597,000 505,000 696,000 709,000 436,000 860,000 241,000 207,845 363,000 290,000 533 000 769 000 ‐ 1,129,000 tax Assembly MLA up (cont’d) 3 . Legislative % grossed * * * * * 9% 48% 41% 94% 67% 40% 85% 33% 15% 46% 75% 118% s STI the i of Allowances Allowances Indemnity, ys l Members MLA 2 for na 000 000 Commi ttee Commi ttee , , P10 P10 Salary 35% 50% level of of may from be matched do not Hay exist databases Group ‐ ‐ includes va l ue < < 359,000 329,000 439,000 417,000 326,000 475,000 575,000 234,000 207,845 322,000 276,000 363 000 435 000 A this lieu lieu Base at in in Alberta noncash of plan on the a in ti allowance allowance ha ve Assembly and and included which is 2011 Legislative Allowances Allowances Ma y the of allowance of organizations as Organizations data those ompensa Government) Government) Members transition Median Sector Median Organizations only for C ti A l i market data and/or and/or from from Band 2 Public Position Position Sector salary include Group : 2012 Hay ©Group. All Rights Reserved annualized Base Hay Data An verage Insufficient P25 P10 Market P90 P50 Broader Average Variance P75 Market P90 P10 2. 1. Cdn$ Speaker P75 P50 Private A Variance * Notes (Assembly 3. P25 4. * Band 2 in positions that sector the Government J176 | Appendices 177 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 24 t r may be matched from Hay Group databases do not exist not do databases Group Hay from matched be may that sector Government the in positions 2 *Band Alberta of Assembly Legislative the of Members for ue l va noncash the in included is allowance transition annualized An 4. Appendices | level this at plan a ve ha which organizations those only include Data 3. Allowances ttee Commi of lieu in allowance and Allowances Government) Government) and/or and/or (Assembly (Assembly . Allowances ttee Commi of lieu in allowance and Allowances ttee Commi Allowance, Members’ Special Indemnity, Additional allowance, RRSP allowance, free ‐ tax MLA up grossed Indemnity, MLA includes Alberta of Assembly Legislative the of Members for salary Base 2. 2011 y Ma of as data market Group Hay 1. : Notes data Insufficient * Position Market P10 < P10 < P10 < * P10 < * P10 May 2012 Repo < 81% ‐ 57% ‐ 83% ‐ * 71% ‐ * 50% ‐ Median from Variance verage A A 159% 159% 000 000 , 769 769 75% 75% 000 000 , 435 435 9 000 000 , 499 499 , 1 1 000 000 , 141 141 000 000 , 358 358 , 1 1 P10 682,000 72,000 610,000 63% 505,000 41% 329,000 P25 892,000 99,000 793,000 85% 597,000 48% 359,000 P50 ,2,0 3,0 1,367,000 136,000 1,225,000 156% 709,000 67% 417,000 P75 ,6,0 7,0 1,939,000 170,000 1,766,000 216% 860,000 85% 475,000 P90 ,4,0 0,0 2,451,000 209,000 2,241,000 277% 1,129,000 118% 575,000 Organizations Sector Private Position Market P10 < P32 P10 < * P10 < * P10 < 40% ‐ 24% ‐ 43% ‐ * 43% ‐ * 35% ‐ Median from Variance Average 596,000 80,000 516,000 72% 436,000 40% 326,000 P10 295,000 37,000 241,000 * 241,000 9% 234,000 P25 351,000 51,000 290,000 * 290,000 15% 276,000 P50 441,000 76,000 363,000 54% 363,000 33% 322,000 P75 P75 * 000 000 , 533 533 46% 46% 000 000 , 363 363 1 000 000 , 715 715 000 000 , 101 101 000 000 , 585 585 P90 2,0 1,000,000 128,000 858,000 * 696,000 94% 439,000 Organizations Sector Public Broader Opposition Official the of Leader 265,685 57,840 207,845 * 207,845 * 207,845 Direct Cash Noncas % LTI % STI ue l l Va h h on i emunerat Ri R l ota Tl T 3 3 3 3 4 4 Total Total Salary Base Cdn$ 2 Compensation Target 1 Band 2 2 Band Example MLA role: Leader role: MLA Example of the Official Opposition Official the of iAli l A ti ti ompensa C C s i ys l na A on (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 25 P10 MLAs P75 P50 P25 Sector on ti emunera R R ti l a t Sector Private o Ttl T l osition ua Public t pp pp c AtA l Broader $0 $500,000 $1,000,000 $2,500,000 $2,000,000 $1,500,000 Leader of Leader O Official the , (cont’d) eaker s p i S , p , , ys l Sector na A on Salary Salary ti Sector Private Base Public Broader ompensa le MLA roles: Minister with Minister Portfolio roles: MLA le p C ti A l i $0 Band 2 Exam © 2012 Hay 2012 Hay ©Group. All Rights Reserved $200,000 $100,000 $500,000 $400,000 $300,000 J178 | Appendices 179 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 26 t r Alberta of Assembly Legislative the of Members for lue va noncash the in included is allowance transition annualized An 4. evel l this at plan a ve ha which organizations those only include Data 3. Assembl ( Allowances. ttee Commi of lieu in allowance and Allowances ) Government or / and y Appendices | Appendices | Committee Allowance, Members’ Special Indemnity, Additional allowance, RRSP allowance, free ‐ tax MLA up grossed Indemnity, MLA includes Alberta of Assembly Legislative the of Members for ry a al s Base 2. 2011 y Ma of as data market Group Hay 1. : : Notes Notes data Insufficient * P10 < P13 P10 < * P10 < * P10 < Position Market 70% ‐ 41% ‐ 74% ‐ * 62% ‐ * 43% ‐ Median from Variance 756,000 77,000 679,000 98% 457,000 54% 296,000 Average 378,000 0 41,00 0 314,00 30% 298,000 30% 216,000 0 May 2012 Repo P1 460,000 58,000 391,000 48% 343,000 37% 244,000 P25 675,000 75,000 602,000 89% 415,000 48% 275,000 P50 P75 P75 136% 136% 000 000 , 544 544 61% 61% 000 000 , 337 337 5 000 000 , 953 953 000 000 , 94 94 000 000 , 859 859 1,170,00 0 115,00 1,056,000 167% 635,000 80% 389,000 0 P9 0 Organizations Sector Private P10 < P42 P10 < * P10 < * P10 < Position Market 37% ‐ 11% ‐ 40% ‐ * 40% ‐ * 33% ‐ Median from Variance 361,000 56,000 305,000 47% 289,000 28% 241,000 Average 0 178,00 * 178,000 10% 169,000 210,000 0 24,00 0 P1 239,000 32,000 203,000 20% 203,000 12% 193,000 P25 P50 P50 44% 44% 000 000 , 264 264 21% 21% 000 000 , 237 237 1 000 000 , 319 319 000 000 , 50 50 000 000 , 264 264 458,000 74,000 356,000 58% 347,000 38% 271,000 P75 P9 0 461,00 * 435,000 50% 310,000 566,000 0 93,00 0 Organizations Sector Public Broader P36 P75 > P15 * P15 * P17 Position Market 7% ‐ 35% 17% ‐ * 17% ‐ * 8% ‐ Median from Variance 228,000 32,000 196,000 * 196,000 * 185,000 Average * * 148,000 * 148,000 * 148,000 P10 , , 000 , , 191 0 , , 00 , 21 0 00 , 180 * 000 , 180 * 000 , 168 P25 218,000 33,000 190,000 * 190,000 * 171,000 P50 223,000 38,000 204,000 * 204,000 * 190,000 P75 P90 * * 216,000 * 216,000 * 216,000 anizations g Or Government Speaker Deputy 202,412 44,511 157,901 * 157,901 * 157,901 Direct Direct Cash Cash % STI Value Noncash % LTI Remuneration Total 3 3 4 Total Total Salary Base Cdn$ 2 Compensation Target 1 Band 3 3 Band Example MLA role: Deputy Speaker Deputy role: MLA Example iAli l A on ti ti ompensa C C s i ys l na A (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 27 0 0 0 0 00 000 000 , , , , * * P10 1% 31% 67% P63 P16 ‐ ‐ < 218,000 223,000 228,000 458,000 239,000 361,000 675,000 756,000 460,000 220,686 191 566,00 319 000 210,00 953 000 378,00 Remuneration Commi ttee Total 4 0 0 0 0 Allowance, Value 00 000 000 * * , P75 , , , 3% 36% P48 P16 ‐ 47% ‐ > 33,000 38,000 21 41,00 32,000 93,00 24,00 74,000 32,000 56,000 75,000 77,000 58,000 48,361 50 000 94 000 Noncash Members’ Special 1 000 000 000 , , , , P10 P10 9% 35% 71% P21 ‐ Total ‐ ‐ < < Direct 190,000 204,000 180 314,000 196,000 216,000 461,000 178,000 148,000 356,000 203,000 305,000 602,000 679,000 391,000 172,325 264 000 859 000 Indemnity, 1,056,000 115,000 1,170,000 of a Recognized Opposition Party Opposition of a Recognized Additional Compensation 3 % * * * * * * * * * * * * * * * Target 30% 58% 20% 47% 89% 98% 48% 44% 167% 136% LTI allowance, RRSP Alberta allowance, 000 000 000 , , , , P10 P10 of 9% 35% 58% P21 ‐ Cash Total ‐ ‐ < < free 190,000 180 204,000 196,000 216,000 635,000 435,000 178,000 298,000 172,325 148,000 347,000 203,000 289,000 415,000 457,000 343,000 264 000 544 000 ‐ tax Assembly MLA up 3 Legislative % gros sed (cont’d) * * * * * * * * * * * * * 38% 12% 28% 80% 48% 54% 37% 50% 10% 30% 21% 61% STI the of s Example MLA role: Leader Example MLA i Allowances. Indemnity, Members MLA 2 ys for l 000 000 000 Commi ttee , , , , P10 Salary 1% 27% 37% P52 l evel P12 of ‐ ‐ va lue includes < 168 171,000 190,000 172,325 185,000 216,000 148,000 271,000 193,000 241,000 389,000 275,000 296,000 244,000 310,000 237 000 169,000 337 000 216,000 this lieu Base na at in Alberta noncash of plan A the a in allowance ha ve Assembly and included which on Party is ti 2011 Legislative Allowances May ) the of allowance of Opposition organizations as Organizations data those Government Members transition Sector Organizations Median Median Median only or Organizations / for Recognized market data a and from from from Public y Sector Position Position Position of salary include Group : annualized 0 0 0 0 Data Hay An Base Insufficient Assembl P25 P50 P75 Variance P9 Broader Average Government P90 P9 Private Market 3. Leader P10 P75 P50 P25 Average P75 P50 Average * Notes 1. P1 Variance Market P25 Variance P1 Cdn$ Market 4. 2. ( ompensa C ti A l i Band 3 © 2012 Hay 2012 Hay ©Group. All Rights Reserved J180 | Appendices 181 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 28 t r Appendices | Appendices | May 2012 Repo Organizations Organizations Sector Sector aa s o at at niz ga ga r O O r Secto Secto s n o i Government Sector Private Public Broader Government Public Broader Sector Private $0 $0 $200,000 $100,000 $400,000 000 , 200 $ $, 000 , 600 $ $, $800,000 $300,000 $1,000,000 $400,000 $1,200,000 ti R Ttl l c At A on ti emunera R l a t o T l ua t ary l a Sl S ase B B MLAs P10 P25 P50 S y ut p De roles: MLA le p p Sam nized O nized g Reco a of Leader , , eaker p pyp py y Part osition pp pp g P75 Band 3 3 Band iAli l A on ti ti ompensa C C s i ys l na A (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 29 0 0 0 0 0 00 000 000 , , , , P10 8% 14% 40% P65 P30 ‐ ‐ < 180,000 204,000 182,000 219,000 135,000 298,000 186,000 240,000 325,000 364,000 262,000 194,339 167 354,00 226 000 164,00 531,00 401 000 224,00 Remuneration Commi ttee Total 4 0 0 0 0 0 Allowance, Value 00 000 000 , P90 , , , 5% P64 P45 ‐ 48% 19% > 67,00 29,000 36,000 29,000 63,00 20,00 25,00 41,000 18,000 48,000 25,000 39,000 45,000 45,000 33,000 21 42,810 36 000 56 000 Noncash Members’ Special 1 000 000 000 , , , , P10 1% 18% 47% P46 P27 ‐ Total ‐ ‐ < Direct 464,000 153,000 171,000 153,000 143 286,000 135,000 193,000 181,000 117,000 234,000 149,000 201,000 286,000 319,000 224,000 184 000 357 000 151,529 Indemnity, cial Opposition House Leader Additional Compensation 3 % * * * * * * * * * * * * * * * * * Target 7% 74% 37% 32% 43% 21% 32% 53% LTI allowance, RRSP Alberta allowance, 000 000 000 , , , , P10 of 1% 18% 39% P46 P27 ‐ Cash Total ‐ ‐ < free 153,000 143 356,000 171,000 153,000 277,000 135,000 185,000 181,000 117,000 231,000 149,000 196,000 249,000 263,000 211,000 184 000 294 000 151,529 ‐ tax Assembly MLA up Example MLA Offi role: MLA Example 3 Legislative % gros sed (cont’d) * * * * * * * * * * * * * 52% 31% 11% 23% 32% 34% 24% 37% 10% 19% 23% 39% STI the of s i Allowances. Indemnity, Members MLA 2 ys for l 000 000 000 Commi ttee , , , , Salary 5% 11% 20% P56 l evel P33 P15 of ‐ ‐ va lue includes 134 145,000 171,000 150,000 253,000 178,000 116,000 193,000 143,000 173,000 189,000 195,000 164,000 219,000 171 000 132,000 218 000 146,000 151,529 this lieu Base na at in Alberta noncash of plan A the a in allowance ha ve Assembly and included which on is ti 2011 Legislative Allowances May ) the Leader of allowance of organizations as Organizations House data those Government Members transition Sector Organizations Median Median Median only or Organizations / for market data and from from from Public y Opposition Sector Position Position Position salary include Group : annualized 0 0 0 0 Data Hay An Base Insufficient Assembl P25 P50 Variance P9 Broader P9 Private P75 Average Market 3. Official P10 P75 P50 P25 Average P75 P50 Average * Notes 1. Government P90 P1 Variance Market P25 Variance Market P1 Cdn$ 4. 2. ( ompensa C ti A l i Band 4 4 Band © 2012 Hay 2012 Hay ©Group. All Rights Reserved J182 | Appendices 183 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 30 t r Alberta of Assembly Legislative the of Members for lue va noncash the in included is allowance transition annualized An 4. evel l this at plan a ve ha which organizations those only include Data 3. Assembl ( Allowances. ttee Commi of lieu in allowance and Allowances ) Government or / and y Appendices | Appendices | ttee Commi Allowance, Members’ Special Indemnity, Additional allowance, RRSP allowance, free ‐ tax MLA up sed gros Indemnity, MLA includes Alberta of Assembly Legislative the of Members for salary Base 2. 2011 May of as data market Group Hay 1. : : Notes Notes data Insufficient * P10 < P41 P10 < * P10 < * P10 < Position Market 43% ‐ 9% ‐ 50% ‐ * 42% ‐ * 24% ‐ Median from Variance 364,000 45,000 319,000 43% 263,000 34% 195,000 Average P1 0 25,00 193,000 7% 185,000 19% 146,000 0 224,00 May 2012 Repo 0 262,000 33,000 224,000 21% 211,000 24% 164,000 P25 325,000 45,000 286,000 32% 249,000 32% 189,000 P50 P75 P75 53% 53% 000 000 , 294 294 39% 39% 000 000 , 218 218 0 000 000 , 401 401 000 000 , 56 56 000 000 , 357 357 P9 0 67,00 464,000 74% 356,000 52% 253,000 0 531,00 0 Organizations Sector Private P24 P60 P20 * P20 * P26 Position Market 18% ‐ 13% 22% ‐ * 22% ‐ * 16% ‐ Median from Variance 240,000 39,000 201,000 37% 196,000 23% 173,000 Average 0 20,00 135,000 * 135,000 10% 132,000 0 164,00 0 P1 186,000 25,000 149,000 * 149,000 11% 143,000 P25 P50 P50 32% 32% 000 000 , 184 184 23% 23% 000 000 , 171 171 2 000 000 , 226 226 000 000 , 36 36 000 000 , 184 184 298,000 48,000 234,000 * 231,000 31% 193,000 P75 0 63,00 286,000 * 277,000 37% 219,000 0 354,00 0 P9 Organizations Sector Public Broader P55 P89 P27 * P27 * P48 Position Market 3% 41% 6% ‐ * 6% ‐ * 1% ‐ Median from Variance 182,000 29,000 153,000 * 153,000 * 150,000 Average 135,000 18,000 117,000 * 117,000 * 116,000 P10 143 * 000 , , 143 * 000 , , 0 00 , , 167 0 00 , , 21 000 , , 134 P25 180,000 29,000 153,000 * 153,000 * 145,000 P50 P75 204,000 36,000 171,000 * 171,000 * 171,000 P90 219,000 41,000 181,000 * 181,000 * 178,000 Organizations Government oenet 143,933 Government) and/or (Assembly Chair Committee 184,686 40,753 143,933 * 143,933 * Direct Direct Cash Cash % STI Value Noncash % LTI Remuneration Total 3 3 4 Total Total Salary Base Cdn$ 2 Compensation Target 1 Band 4 4 Band Example MLA role: Committee Ch Committee role: MLA Example air (Assembly and/or Government) and/or (Assembly air iAli l A on ti ti ompensa C C s i ys l na A (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 31 P10 MLAs P75 P50 P25 Sector Sector ) Private Public Public Remuneration Sector and/or Government Broader y Tot al Assembl Actual ( y ( Government Organizations 0 500,000 400,000 300,000 200,000 100,000 Committee Chair , , (cont’d) s i Sector Sector ys l Private na A osition osition Leader House pp pp Public Public on Sector ti Salary Broader Base Government Organizations ompensa le MLA roles: Official O Official roles: MLA le p C ti A l i Band 4 $0 000 , © 2012 Hay 2012 Hay ©Group. All Rights Reserved Exam $50,000 150 $100,000 $ $, $250,000 $200,000 J184 | Appendices 185 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 32 t r Alberta of Assembly Legislative the of Members for lue va noncash the in included is allowance transition annualized An 4. evel l this at plan a ve ha which organizations those only include Data 3. Allowances. ttee Commi of lieu in allowance and Allowances ) Government or / and y Assembl ( Appendices | Appendices | ttee Commi Allowance, Members’ Special Indemnity, Additional allowance, RRSP allowance, free ‐ tax MLA up sed gros Indemnity, MLA includes Alberta of Assembly Legislative the of Members for salary Base 2. 2011 May of as data market Group Hay 1. : : Notes Notes data Insufficient * P16 P77 P10 < * P10 < * P35 Position Market 20% ‐ 30% 29% ‐ * 25% ‐ * 7% ‐ Median from Variance 251,000 32,000 219,000 28% 197,000 27% 154,000 Average P1 0 18,00 145,000 5% 142,000 16% 117,000 0 167,00 May 2012 Repo 0 191,000 23,000 165,000 11% 161,000 20% 131,000 P25 221,000 30,000 195,000 18% 185,000 25% 149,000 P50 P75 P75 32% 32% 000 000 , 220 220 31% 31% 000 000 , 171 171 7 000 000 , 278 278 000 000 , 38 38 000 000 , 242 242 48,00 306,000 53% 271,000 40% 199,000 0 P9 0 356,00 0 Organizations Sector Private P49 P85 P42 * P43 * P53 Position Market 1% ‐ 45% 5% ‐ * 4% ‐ * 1% Median from Variance 180,000 28,000 152,000 32% 150,000 17% 139,000 Average 0 16,00 112,000 * 112,000 7% 110,000 0 138,00 0 P1 157,000 21,000 122,000 * 122,000 10% 121,000 P25 P50 P50 17% 17% 000 000 , 144 144 16% 16% 000 000 , 136 136 7 000 000 , 178 178 000 000 , 27 27 000 000 , 145 145 211,000 33,000 169,000 * 168,000 22% 152,000 P75 0 42,00 206,000 * 203,000 27% 173,000 0 248,00 0 P9 Organizations Sector Public Broader P81 P90 > P62 * P62 * P67 Position Market 12% 50% 4% * 4% * 5% Median from Variance 160,000 24,000 136,000 * 136,000 7% 134,000 Average 127,000 16,000 108,000 * 108,000 * 108,000 P10 , , 0 00 , , 152 0 , , 00 , 20 000 , 121 * 000 , 121 * 000 , 121 P25 158,000 26,000 132,000 * 132,000 8% 131,000 P50 163,000 29,000 144,000 * 144,000 * 141,000 P75 P90 197,000 31,000 167,000 * 167,000 * 167,000 Organizations Government MLA 176,989 39,056 137,933 * 137,933 * 137,933 Direct Direct Cash Cash % STI Value Noncash % LTI Remuneration Total 3 3 4 Total Total Salary Base Cdn$ 2 Compensation Target 1 Band 5 5 Band Example MLA role: MLA role: MLA Example iAli l A on ti ti ompensa C C s i ys l na A (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 33 P10 MLAs P75 P50 P25 Sector on ti Private r emunera Public R R ti l Secto a t o Broader T Ttl l ua t s n c o i AtA l at niz ga r Government O ga at o s 0 000 , 50,000 100,000 150 300,000 250,000 200,000 (cont’d) s i Sector ys l Private na A Public ary l a on Sector Sl S ti Broader ase B Government Organizations ompensa le MLA role: MLA MLA le p C ti A l i $0 Band 5 Exam © 2012 Hay 2012 Hay ©Group. All Rights Reserved $50,000 $200,000 $150,000 $100,000 J186 | Appendices 187 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 34 t r Findings Appendices | Appendices | Observations and Key Key and Observations May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 35 the private sector for jobs at this at jobs for sector private the Group databases in government organizations hort-term and long-term incentives and long-term incentives hort-term and e salary and total and salary e remuneration compared when Findings Key and This differential is largely due to s to due largely is differential This more perquisites being in prevalent executive level o There are no comparable jobs from There are no comparable jobs Hay differential significant a is There bas in Observations and Key Findings and the and sector. public broader to the private sector comparator group. The Premier’s compensation © 2012 Hay 2012 Hay ©Group. All Rights Reserved J188 | Appendices 189 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 36 t r Appendices | Appendices | in the levels of allowances. of levels the in pay may differ when there is a change change a is there when differ may pay of competitiveness The analysis. of purpose May 2012 Repo It is important to recognize the component the recognize to important is It s included in MLAs’ base salary for the the for salary base MLAs’ in included s Base salary for MLA role in Band 5 is 5 Band in role MLA for salary Base the most competitive of the 5 bands. bands. 5 the of competitive most the organizations. L hd f di th b t l i 4 d B i l MLA f l sa ase B B b a or o t ose l c s i 4 d an B n i es l ro MLA or f ary l t t governmen f o an di me e th ove compared to government organizations. organizations. government to compared sector and private sector market in most in market sector private and sector cases; market positioning increases when when increases positioning market cases; Base salary for MLA roles in Band 3 is below the 10 the below is 3 Band in roles MLA for salary Base percentile of the broader public public broader the of percentile th organizations from Hay Group databases. Group Hay from organizations sector and private sector market. Ther market. sector private and sector e are no comparable roles in government government in roles comparable no are e Base salary for MLA roles in Band 2 is below the 10 the below is 2 Band in roles MLA for salary Base percentile of the broader public public broader the of percentile th Base Salary Base MLAs’ Compensation and Benefits and Compensation MLAs’ bevtosadKyFindings Key and Observations Observations Findings Key and REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 37 Alberta for e expense bl e allowance, expense axa t bl indemnity , ve a non- a ve i account ry of publicly disclosed data on MLA disclosed ry of publicly into so rece compared to MLAs in other jurisdictions in compared to MLAs l ovide such non-taxabl such ovide pared to MLAs of other provinces. s a allowance MLA Findings a t er Alb Key expense y, it and emn taxable expense allowance into account indemnity for Alberta d - n i o non t on the Please refer Please to for H Appendix a summa compensation dditi o n a MLAs is competitive (above P50) com Alberta MLAs’ indemnity is lowest when I dditi t i dTaking the non it Alb t MLA l i allowance. Three other jurisdictions pr the North West Territories, Quebec and Yukon. including When comparing to other jurisdictions: other to comparing When Base Salary (cont’d) Observations and Key Findings MLAs’ Compensation and Benefits MLAs’ © 2012 Hay 2012 Hay ©Group. All Rights Reserved J190 | Appendices 191 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 38 t r sector Appendices | of MLAs’ benefit provisions to gover to provisions benefit MLAs’ of nment organizations and the broader public public broader the and organizations nment o Please see Appendix F for benefits prevalence analysis with detailed comparison comparison detailed with analysis prevalence benefits for F Appendix see Please May 2012 Repo allowance is provided, whic provided, is allowance h can be seen as a payment payment a as seen be can h in lieu of a pension plan. plan. pension a of lieu in tej dc eap osob asaS a s ta be o s to a p o s pe a de o p s o ct sd ju e Ot Ot . F . s MLA to n a l p n o i s n pe a de vi o r p s n o i ct i sd ri ju r e h P S RR a s MLA ta r be Al r o days. practices. Note that MLAs receive minimal to no perquisites and no paid vacation vacation paid no and perquisites no to minimal receive MLAs that Note practices. emdsblt n cietldah&dsebret r nln ihmarket with line in are dismemberment) & death accidental and disability term term dismemberment) & death accidental and disability market with line in are In terms of benefit prevalence, MLAs’ gr MLAs’ prevalence, benefit of terms In oup benefits (e.g. health, dental, life, long long life, dental, health, (e.g. benefits oup transition allowance for MLAs for allowance transition oenetOgnztosadBodrPbi etrcmaao rusdeto due groups comparator Sector Sector Public Public Broader Broader and and Organizations Organizations Government Government to due groups comparator o Average MLAs’ noncash benefits is pos is benefits noncash MLAs’ Average itioned higher compared to the the to compared higher itioned included as a proxy for retirement benefits. retirement for proxy a as included For the purposes of compensation compar compensation of purposes the For ison, MLAs’ transiti MLAs’ ison, on allowance has been been has allowance on Noncash Benefits Benefits Noncash MLAs’ Compensation and Benefits and Compensation MLAs’ bevtosadKyFindings Key and Observations Observations Findings Key and d) d) ’ (cont (cont REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 39 y x o n Pr a i e of the MLAs’ of e ad g n Ca 11 ercenta 0 p 2 ) e ” g SS lar ”I y gp g y ( ’ ces wance is similar in nature wance to a severance rvi ance multiples is 12 - 24 months of salary Se r salary for each year of service. service. of year each for salary hen they leave office. Although quite a ll members once they leave office, whether the highest when compared to transition the highest when de l o h Findings e allowance is a fairl r a h S l Key a n o i tut and i st In to choice or not. or choice The y g in d r cco d g to st tut o a S a e o de Se ces ( SS ) 0 Ca ad a o y leave b leave y y Acco Voting Guidelines Summary defines exce ssive severance payment as greater from annual times three a change compensation, cash annual times two than cash compensation in the past. of severance the level lowering emerging trend in an there is In our view, payments. payment . is given to This allowance a substantial allowance for allowance substantial the MLAs, allo this the MLAs receive a transition allowance w receive a transition allowance MLAs compensation, representing 3 months is transition MLAs’ Alberta allowance for other in MLAs allowance jurisdictions a point of reference, the common sever As and bonuses amongst S&P/ TSX 60 organizations. o o Transition Allowance Observations and Key Findings MLAs’ Compensation and Benefits MLAs’ © 2012 Hay 2012 Hay ©Group. All Rights Reserved J192 | Appendices 193 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 40 t r Appendices | Appendices | May 2012 Repo whereas MLAs receive minimal to no perquisites. perquisites. no to minimal receive MLAs whereas o Executive perquisites are prominent at s at prominent are perquisites Executive enior levels in private organizations, organizations, private in levels enior o Short-term incentives are also pr also are incentives Short-term evalent in the broader public sector. sector. public broader the in evalent in the private sector. sector. private the in prevalent are incentives o MLAs are not entitled to cash incentiv cash to entitled not are MLAs es; short-term, mid-term and long-term long-term and mid-term short-term, es; on is driven by the following: following: the by driven is on positi remuneration total low The the private sector. private the percentile when compared to to compared when percentile is the most competitive. However, it is below the 10 the below is it However, competitive. most the is th Similar to the market positioning of base base of positioning market the to Similar salary, total remuneration for Band 4 and 5 5 and 4 Band for remuneration total salary, Total Remuneration Total MLAs’ Compensation and Benefits and Compensation MLAs’ bevtosadKyFindings Key and Observations Observations Findings Key and REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 41 Summary © 2012 Hay 2012 Hay ©Group. All Rights Reserved J194 | Appendices 195 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 42 t r Appendices | Appendices | MLA 5 Band P16 P49 P81 P35 P53 P67 May 2012 Repo Speaker Deputy 3 Band Speaker Portfolio with with Minister Minister 2 2 Band Band P10 P10 < P10 P10 *< Portfolio P10 P10 < P10 P10 *< Premier 1 Band *< * 0 1 P *< * 0 1 P Organizations Organizations Organizations Organizations Organizations Organizations Sector Sector roles MLA Example Level Sector Private Government Sector Private Government Public Broader Public Broader y y Salar Base Remuneration Total et g g Tar compensation. organizations. Clearly, there is a gap to gap a is there Clearly, organizations. higher private sector organizations’ organizations’ sector private higher ad3pstoigi otcmeiiewe oprdt te Government other to compared when competitive most is positioning positioning , 3 3 Band Band when competitive most is Government other to compared MLA compensation is not positioned competitiv positioned not is compensation MLA ely for Band 1 and 2. However, starting at at starting However, 2. and 1 Band for ely ummary S S REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 43 private Public Sector (Avg.) anizations and g Government Organizations (P50) Broader Sector Organizations (P50) Private Or (P50) MLAs sector public 1 broader 2 Band to from our databases (except for for Private (except from databases our increasing job size. Please note that note Please size. job at increasing ogression of ogression different (MLAs) bands against gap 3 Band salary 4 Band base The . 5 Band Band groups (cont’d) $0 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 (Cdn$) Salary se a a B comparator 3 ummary The following chart shows the base salary pr the 3 comparator groups The base salary gap to broader public sector and private Band 1 and 2 positions that matched positions be 2 may and 1 Band Sector organizations) do not exist. sector compensation continues to continues compensation sector with widen S © 2012 Hay 2012 Hay ©Group. All Rights Reserved J196 | Appendices 197 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 44 t r Appendices | Appendices | 1 Band 2 Band 3 Band 4 Band 5 Band $0 $0 $200,000 May 2012 Repo $400,000 To ) . g) g Av ( ( MLAs tal $600,000 Remuneration (P50) Organizations $800,000 Sector Private (P50) Organizations 000 , 000 , $1 100000 000 $1 ( Sector Sector C dn$) Public Broader $1,200,000 (P50) Organizations Government $1,400,000 $1,600,000 awards to increasingly senior increasingly to awards private sector executives. executives. sector private typically driven by long-term incentive incentive long-term by driven typically compensation in divergence a see commonly gis h oprtrgop hncmaigt h ulcadpiaesco we sector private and public the to comparing When groups comparator comparator 3 3 the the against against comparing When . groups private and public the to we , sector The following chart shows the Total Remunerat Total the shows chart following The ion progression of different bands (MLAs) (MLAs) bands different of progression ion ummary S S (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 45 Appendices © 2012 Hay 2012 Hay ©Group. All Rights Reserved J198 | Appendices 199 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 46 t r Appendices | Appendices | role of MLA, and its inherent challenges; inherent its and MLA, of role Representing different constituencies; again, constituencies; different Representing providing a richer understanding of the the of understanding richer a providing May 2012 Repo acdp soet ; a o e o e t o e a s to e o ts po ced ua g vin a a n MLA n a f o e l o r e h t n o e r a h s to w e vi f o ts in po ced n ua n g ; h Representing both government and oppositi and government both Representing on parties, and therefore, potentially potentially therefore, and parties, on Having served in a number of different of number a in served Having roles over their tenure as MLAs; as tenure their over roles perspective of: perspective we interviewed seventeen MLAs. These MLAs These MLAs. seventeen interviewed we represented a cross-section from the the from cross-section a represented conducting a fair and equitable job evaluation and and evaluation job equitable and fair a conducting to facilitate our understanding of the roles, roles, the of understanding our facilitate to prpit oprsn omre aafrteerlsJbudrtnigi rtclto critical is understanding Job roles these for data market to comparisons appropriate appropriate Job . roles these for data market to comparisons to critical is understanding d provide a platform for making the most most the making for platform a provide d woul and determined, be could roles MLA various methodology to analyze and evaluate MLA roles. roles. MLA evaluate and analyze to methodology The relative size and complexity of the the of complexity and size relative The As part of the Compensation and Benefits review Benefits and Compensation the of part As , Hay Group was asked to use its job sizing sizing job its use to asked was Group Hay , Role Understanding – Process Overview Process – Understanding Role – A A x di di ppen A A t MLA MLA ith ith w ew i i erv t t n I I s REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 47 All . d ewe i , without y erv t n i s MLA e th f erences; f o h cy pre eac li ith particular order of priorit of order particular (cont’d) po y d ng constituents’ concerns. constituents’ ng s th their role. It was interesting to note that their role. It was th ons w ons i ve distinct roles that the modern legislature distinct roles ve ews an i MLA scuss s, v di t ith eres s a reasonable and comprehensive summary, which summary, comprehensive and reasonable a s t or our n i f ’ ew w e i id zens : Attending to and resolvi and to Attending : erv iti : The passage and careful consideration of legislation; and careful consideration The passage : t : Development and education of public opinion; and opinion; public of education and Development : c n I t i ith MLA Of iti ’ i t t i d li f as a gu t not have presented the list in an – y yy on : ruc t ti A a t x di s cons thi epresen d RLegislative Function tof government; Control Function : Fostering the control and accountability ti Educative Function Constituency Service ppen A di A e use e © 2012 Hay 2012 Hay ©Group. All Rights Reserved Interview Observations and Themes Interview Observations and related well to the key responsibilities associated wi associated responsibilities key the to well related ma Tupper while Dr. MLAs interviewed felt that the list wa At the Calgary Hearing, Dr. Allan Tupper offered his opinion of the major roles of a modern of the major roles opinion his offered Tupper Allan Dr. Hearing, the Calgary At that suggested there are fi Tupper Dr. legislature. fulfills: W d thithe role and most strongly with identified interviewed most of the MLAs exception, tresponsibility of constituency service. t id f di i ith h f th MLA i t i d All J200 | Appendices 201 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 48 t r Appendices | Appendices | May 2012 Repo Albertans. xctv aigacutblt o aaiga managing for accountability having executive executive otoi htms eie evcst all to services deliver must that that portfolio portfolio a managing for accountability having all to services deliver must in the position of not only representing his or his representing only not of position the in her constituents, but also serving as an an as serving also but constituents, her role of MLA appears to shift when the MLA is appoi is MLA the when shift to appears MLA of role nted to a cabinet position. A Minister is is Minister A position. cabinet a to nted responsibilities might include serving as a mem a as serving include might responsibilities ber of cabinet. Generally, the focus of the the of focus the Generally, cabinet. of ber oeMA r se oasm diinlrsosblte.Teeadditional These responsibilities. additional assume to asked are MLAs some some responsibilities. additional assume to asked are MLAs additional These representing their constituents, and working working and constituents, their representing on the review and adoption of legislation, legislation, of adoption and review the on While all MLAs have the same core respons core same the have MLAs all While ibilities, which were described to us as as us to described were which ibilities, otx oterl fMAa eudrto them: understood we as MLA of role the to to context context them: understood we as MLA of role the share them more to provide provide to more them share we rather, profile; role a as e serv to intended not are observations observations and themes emerged emerged themes and observations from these discussions, which we share below. These These below. share we which discussions, these from detailed and contributed well to our understanding of t of understanding our to well contributed and detailed he role of MLA. A number of consistent consistent of number A MLA. of role he athered durin athered g gg the course of the various interviews was thou was interviews various the of course the g g htful, rich and and rich htful, g The information information The – A A x di di ppen A A t MLA MLA ith ith w ew i i erv t t n I I s (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 49 s g g some In . resource our findin interview ), chooses to bring the chooses wide appropriate y y ), (cont’d) often called upon to initiate some often called the willingness to set the constituent in the in constituent the set to willingness s to be that an MLA receives inquiries from inquiries receives be that an MLA typically found in roles other than elected roles found in typically political party, only are they ultimately party, political an individual at risk (e.g.: an individual health, social e appears to be a sense of responsibility or of responsibility e appears to be a sense MLA appear on the surface that an MLA need only be appear on the surface that an MLA citizen well, they study, debate and vote on proposed they study, well, ith the any issue that issue any constituent a direct ew w i which in itself is extremel is itself in which to ( erv t ors. n t I t i ith MLA rac – urisdiction t willingness j a A , x s or con least di l rovincial a i p j ( c While most While members as serve MLAs of a the In general terms, an MLA requires a broad knowledge base. The MLA must be The MLA base. requires a broad knowledge In general terms, an MLA ffi i l t t in the scope of the Alberta Government – with in the scope of issues of the diversity the on knowledgeable the elected representative. elected While it might cases, particularly where a citizen may be services), there appears to be an even greater services), matter. right direction, regardless of the jurisdictional to virtually prepared to speak The reality appears to otherwise. suggested is and scope provincial beyond well constituents Ther raised. being issue the to resolution at the least a willingness to direct the citizen to the appropriate resource In some o responsible to their constituents. As to their constituents. responsible legislation. This level of legislation. independence is not ppen A di A © 2012 Hay 2012 Hay ©Group. All Rights Reserved J202 | Appendices 203 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 50 t r Appendices | Appendices | May 2012 Repo responsibility. iit(tb ib l bl ti i b d i ) bl t ( itt comm ve ti ti ac ve i perce was ) y bl assem or t governmen ( ee itt arger l y bl cea ti no a ng i e b as d a core responsibility for MLAs, and not an add- an not and MLAs, for responsibility core a on responsibility. However, chairing an an chairing However, responsibility. on In all cases, the MLAs interviewed were of the opinion that committee participation was was participation committee that opinion the of were interviewed MLAs the cases, all In understand in considerable depth the issues of of issues the depth considerable in understand a number of portfolios/issues/initiatives. of number a fewer members, typically a member of of member a typically members, fewer the shadow cabinet will be responsible to to responsible be will cabinet shadow the Members of the Official Opposition provi Opposition Official the of Members because there are far far are there because but cabinet shadow a de to an executive responsible for a major major a for responsible executive an to operating division of a large organization. large a of division operating reasonable, in our opinion, to consider a Mi a consider to opinion, our in reasonable, nister’s responsibilities as being comparable comparable being as responsibilities nister’s considering comparable roles beyond the prov the beyond roles comparable considering incial government setting, it would be be would it setting, government incial typically populated by a few hundred to a few few a to hundred few a by populated typically thousand employees. For the purpose of of purpose the For employees. thousand er serves as as serves er t t s i i n Mi Mi A A hit ti i l t t d f ve ti ti execu or i i sen e th th , a comp a , t men t epar d a or f on ti za i organ ex l – A A x di di ppen A A t MLA MLA ith ith w ew i i erv t t n I I s (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 51 quite be can issues and challenges (cont’d) s different commented on the demands of role, long with MLA ublic life and the and life ublic of absence relative work-life p p ith MLAs ew w i provide erv associated with t y n I t i ith MLA – rivac p A constituencies x di lack of , py The majority of MLAs interviewed also The majority of MLAs interviewed Different constituencies provide MLAs with different challenges and issues can be quite hours different (urban versus rural for rural example). versus (urban different balance. ppen A di A © 2012 Hay 2012 Hay ©Group. All Rights Reserved J204 | Appendices 205 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 52 t r Appendices | Appendices | Treasury Board of Canada Secretariat Canada of Board Treasury Ladysmith Ladysmith of of Town Town Tk'emlúps Indian Band Indian Tk'emlúps Strathcona County Strathcona Regional Municipality of Wood Buffalo Wood of Municipality Regional May 2012 Repo Nanaimo of District Regional Regional District of Central Okanagan Central of District Regional Commons Commons of of House House Halifax Regional Municipality Regional Halifax Government of Ontario of Government Government of Nunavut of Government Government of Nova Scotia Nova of Government Government of the Northwest Territories Northwest the of Government Manitoba of Manitoba of Government Government Government of Alberta of Government Gouvernement du Québec: Secrétariat du Conseil du trésor du Conseil du Secrétariat Québec: du Gouvernement The Corporation of the District of Peachland of District the of Corporation The City of St. Albert St. of City City of Regina of City Nanaimo Nanaimo of of City City City of Kelowna of City City of Fort Saskatchewan Fort of City City of Edmonton of City City of Charlottetown of City City of Brantford of City Agency Agency ce Servi Service Public Public . C C . B B – B B x di di ppen A A i( 26) (N ti i rgan O O t t overnmen G G 26) = (N ons ti za i REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 53 es 192) i or it = err T t (N wes th or N e th ons f Canada o ti t Airports Credit za i overnmen Dalhousie University Deposit Insurance Corporation of Ontario Edmonton Airports EdmontonCatholic School District Educators Financial Group Inc. Association Electricity Distributors Enersource Hydro Mississauga Engineers Canada Evraz Place Columbia British of Farm CreditCommission Institutions Canada Authority Financial Health Regional Hills Five Samaritan Good The Society Québec: du Gouvernement SecrétariatConseil du trésordu Government of Alberta Government of Manitoba G t f th N th t T it i Government of Nova Scotia Government of Nova Government of Nunavut Government of Ontario Grant MacEwan University Greater TorontoAirports Authority Guelph Hydro Electric Systems Inc. Guysborough Antigonish Strait DistrictHalifax Health Port Municipality Authority Authority Regional Halifax Halifax Regional Water Commission Hamilton-WentworthThe District School Board Health Quality Council Healthcare of Ontario Pension Plan Development Council Kong Trade Hong Horizon Utilities Corporation House of Commons rgan . O Inc or t Association ec Corporation S Insurance ance c Housing Alli lth Health and bli ea H and u t en Life P K Mortgage am- th a er ChickenFarmers of Ontario City of Brantford City of Charlottetown City of Edmonton City of Fort Saskatchewan City of Kelowna Canadian Payments Association BretonCape District Health Authority BretonCape Authority University Health District Capital Centre Street Church Certified Management Accountants of Saskatchewan Canada FoundationCanada forInnovation LandsCanada Limited Company CLC Canada Mortgage and Housing PostCanada Corporation Corporation Canadian Bankers Association Canadian Cancer Society - British Columbia & Yukon Division Canadian Centre on Substance Abuse Canadian Council of Christian Charities CanadianInstitutes of Health Research Canadian Life and Health Insurance Association Inc Ch th K t H lth Alli City of Nanaimo City of Regina Albert St. of City Colchester East Hants District HealthConcordia Authority UniversityCollege of Alberta Construction Sector Council CorporationThe of the District of Peachland Credit Union Deposit Guarantee Corporation - Saskatchewan Cumberland DistrictHealth Authority Cypress Regional Health Authority d roa B d P bli S t O i ti (N 192) – C Authority x Housing di Health operative - District Co a d for ppen Valley ana C A di C f o Agency © 2012 Hay 2012 Hay ©Group. All Rights Reserved k an AMAPCEO FinancialATB The Agency for CoAlberta operative Institute Housing Purchasing Management Assn.Alberta of Canada Investment Management Corporation Alberta Local Authorities Pension Plan Corp. Alberta Pension Services Corporation Alberta Securities Commission Alcohol and Gaming Commission of Ontario Annapolis Valley DistrictAssociation Inc. of Regina REALTORS Health AuthorityAssociation of Saskatchewan Realtors Association of Universities and Colleges of Canada Assuris Autorité des Marchés Financiers du Québec B.C. Public Service Agency B k fC d British Columbia Safety Authority Build Toronto Inc. Business Development Bank of Canada PensionCAAT Plan CPP Investment Board CSA Group Calgary Public Library CalgaryThe Stampede Calgary Zoo DepositCanada Insurance Corporation Blue Water Bridge Canada Bluewater District School Board Bluewater Power Distribution Corporation ValleyBow College Brantford Energy Group of Companies British Columbia Hydro and Power Authority J206 | Appendices 207 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 54 t r TVOntario Prince Albert Parkland Regional Health Authority Health Regional Parkland Albert Prince Sunrise Regional Health Authority Health Regional Sunrise Prairie North Regional Health Authority Health Regional North Prairie Strathcona County Strathcona Appendices | Sun Country Regional Health Authority Health Regional Country Sun PowerStream Inc. PowerStream Pictou County District Health Authority Health District County Pictou South West Nova District Health Authority Health District Nova West South Yukon Energy Corporation Energy Yukon York Manor Inc. Manor York OPSEU Pension Trust Pension OPSEU South Shore District Health Authority Health District Shore South Yellowhead Regional Library Regional Yellowhead Ontario Teachers' Pension Plan Board Plan Pension Teachers' Ontario SaskTel Commission of N.B. of Commission Ontario Power Generation Inc. Generation Power Ontario SaskPower Workplace Health, Safety and Compensation and Safety Health, Workplace Ontario Power Authority Power Ontario SaskEnergy Incorporated SaskEnergy May 2012 Repo Manitoba of Board Compensation Workers Ontario Pension Board Pension Ontario Saskatoon Regional Health Authority Health Regional Saskatoon Workers' Compensation Board - Alberta - Board Compensation Workers' Ontario Lottery and Gaming Corporatio Gaming and Lottery Ontario n Ontario Association of Food Banks Food of Association Ontario Saskatchewan Workers' Compensation Board Compensation Workers' Saskatchewan Alliance Alliance Missionary Missionary Western Canadian District, Christian & & Christian District, Canadian Western Office of the Superintendent of Financial Institutions Financial of Superintendent the of Office Saskatchewan Watershed Authority Watershed Saskatchewan Westbank First Nation First Westbank OMERS Administration Corporation Administration OMERS Saskatchewan Housing Authorities Housing Saskatchewan Westario Power Inc. Power Westario Nunavut Tunngavik Incorporated Tunngavik Nunavut Saskatchewan Government Insurance Government Saskatchewan VisitBritain Nova Scotia Pension Agency Pension Scotia Nova Saskatchewan Cancer Agency Cancer Saskatchewan Veridian Corporation Veridian Northwest Territories Power Corporation Power Territories Northwest Saskatchewan Association of Health Organizations Health of Association Saskatchewan g pe i nn i Wi f Wi o f y it it vers i i n U U University of Victoria of University lddLbdCtfHlhIfti f I lth H f t C b d a L b d L an d d d an dl dl oun f f ew N N n o ti orma f n I lth ea H or f re t en C or d ra gency A t tA anagemen M t tM ssessmen A A ewan h c h t t a k k as S S St. Lawrence Seaway Management Corporation Management Seaway Lawrence St. Natural Sciences and Engineering Research Council of Canada of Council Research Engineering and Sciences Natural University of Regina of University Saint John Police Force Police John Saint National Energy Board Energy National Safety Codes Council Codes Safety University of New Brunswick New of University NB Power Holding Corporation Holding Power NB SPARC BC SPARC McMaster University McMaster University of British Columbia British of University onal Health Authority Health onal Regi River Churchill Mamawetan Royal Roads University Roads Royal University of Alberta of University London Hydro London Royal Canadian Mint Canadian Royal United Way of the Alberta Capital Region Capital Alberta the of Way United The United Church of Canada of Church United The LCBO LCBO Kelsey Trail Regional Health Authority Health Regional Trail Kelsey eitrdNre soito fNrhetTrioisadN and Territories Territories Northwest of Northwest of Association Association Nurses Nurses Registered Registered N and Regional Municipality of Wood Buffalo Wood of Municipality Regional Union of Northern Workers Northern of Union Keewatin Yatthe Regional Health Authority Health Regional Yatthe Keewatin Regional District of Nanaimo of District Regional USC Education Savings Plans Inc. Plans Savings Education USC International Development Research Centre Research Development International Regional District of Central Okanagan Central of District Regional Trillium Lakelands District School Board School District Lakelands Trillium Industry Training Authority Training Industry Regina Qu'Appelle Regional Health Authority Health Regional Qu'Appelle Regina Treasury Board of Canada Secretariat Canada of Board Treasury Immigrant Services Society of British Columbia British of Society Services Immigrant Regina Police Service Police Regina Town of Ladysmith of Town IWK Health Centre Health IWK Red River College River Red oot rni Commission Transit Transit Toronto Toronto Commission Limited Ottawa Hydro yr taaLimited Ottawa Hydro College College Deer Deer Red Red Toronto Hydro-Electric System Limited System Hydro-Electric Toronto Hydro One Inc. One Hydro Public Sector Pension Investment Board Investment Pension Sector Public Tk'emlúps Indian Band Indian Tk'emlúps Hydro One Brampton One Hydro Prince Rupert Port Authority Port Rupert Prince l ti i O t S S c bli bli u P P er d d roa B B – C C x di di ppen A A ons ti za i rgan O or t ec (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 55 Canada of Company oration p Insurance . Life Inc Equitable 353) EliLilly Inc. Canada ElkemMétal Inc.Canada Envision Financial,divisiona of FirstWest Credit TheUnion Equitable Life InsuranceEssar Steel Company Algoma Inc. of Canada Fédérationdes caisses DesjardinsQuébec du FerreroLimited Canada Commercial Division FerreroLimited Canada IndustrialDivision FidelityInvestments ULC Canada FinningInternational Inc. FirstCalgary Financial Credit Union Ltd. FirstCanadian Title Company Ltd. FirstNations Bank of Canada FirstWest Credit Union FirstOntario Credit Union Fisher& Paykel Healthcare Inc. ForboLinoleum Inc. FortisInc. FortisOntario Inc. FortisProperties Corporation FortisAlberta Inc Graham& Brown Grand& Toy Great-WestLife Assurance Company GriffithLaboratories Limited Inc. SEB Group Canada GuardianMutual Funds Bank HSBC Canada Developments Inc. Harvard HenkelCor Canada HiltiLtd. (Canada) HobartEquipment Food Services Canada Hoffmann-LaRoche Ltd. Depot Home Canada The Hudson's BayCompany FortisBCEnergy Inc. FortisBCInc. FranklinTempleton Investments GatesInc. Canada GeneralKinetics Engineering Corporation Ameristeel Gerdau GlaxoSmithKline Inc. Graceway Pharmaceuticals = (N y) ons an p p y) da ti ana C da za son i id ana a Jacobs com av C ( D k an ey- l B ar H ca i ey l rgan tec Inc. Canada Nobelno Inc. Canada omer y ee y Caterpillar of Corporation Canada Centerra Gold Inc. Chartis Insurance Company of Canada Chemetics Inc. Christie Digital Systems Inc. ChurchillThe Corporation Citigroup Fund Services Inc. Canada AtlanticCo-op Coast Capital SavingsCredit Union Coastal Community Credit Union Cognis Corporation Canada Combined Insurance Companyof America CCompass Group Canada iConcentra Financial B kCConexus Credit Union d Country Ribbon Inc. Crawford and Company (Canada) Inc. Credential Financial Inc. Credit Union Central Alberta Limited C Companies D&B The Ltd.of Canada Manufacturing DENSO Canada, Inc. NutritionalDSM Products Inc. Canada Daishowa-Marubeni International Ltd. Inc. Canada Danone Beers De Inc.,Canada Corporate Division BeersDe Inc., Canada Exploration Division Beers De Inc.,Canada Mining Division DlHlDidCd D Direct EnergyMarketing Ltd. Chemical Dow Inc. Canada Corning Inc.Dow Canada PepperDr Snapple Group Dr. Oetker Ltd. Drayden Insurance Ltd. PreciousDundee Metals D EFW Radiology E.I.Pont du Company Canada SeronoEMD Inc. Canada WorldwideERCO Ltd.EWOS Canada O or t . Ltd ec p S d Canada te i m e Li t eway Limited Partnershi f Ingredients p pp a va S i Power a d r ana BarkervilleGold Mines Ltd. BarrickGold Corporation Basell Inc.Canada BaxterCorporation Bay The BayerInc. BeerStore The BlackCat Blades Ltd. BHP Billiton Inc. Canada FinancialBMO Group Babcock & Wilcox Ltd. Canada BakeMark Ingredients Canada Ltd Blue MountainResorts Limited BoehringerIngelheim (Canada)Ltd. BombardierTransportation Inc. Canada Brandes InvestmentPartners & Co. Brink'sLimited Canada Bristol-MyersSquibb Co. Canada BritcoStructures Inc. Inc. Canada Broan-NuTone Bruce Power Bunge NorthAmerica Canada CHEP CIBC CIBCMellon CKF Inc. CNH America,LLC. Ltd. CabotCanada Campbellof Canada Company C dSfCanadelleInc. Liid Canadian DepositoryThe for Securities Limited CanadianForest ProductsLtd. CanadianNational RailwayCompany CanadianPacific Railway CanadianTire FinancialServices CanexusLimited PulCanfor Inc. Canada Canon CanpotexLimited CapitaleLa CargillLimited Catalyst PaperCorporation P i t S t O i ti (N 353) – D x di . c . In Inc ada n ppen Ca Alouette A di D eca n e © 2012 Hay 2012 Hay ©Group. All Rights Reserved Z a r fa Inc. fa g st a e eca Ca ada c Amcor Limited Inc.Amgen Canada CorporationAmway Canada Andrew Peller Limited ArcelorMittal Dofasco Inc. ArcelorMittal Mines Canada ArcelorMittal Tubular Products - Automotive DivisionArrow Transportation Systems Inc. 1st Choice Savingsand Credit Union Ltd. Company Canada 3M A&W Food Services Inc. of Canada Inc.ABB ACA Co-operative Limited I-Tek ATCO AV Nackawic Inc. Abbott Laboratories, Limited Affinity Credit Union AGF Trust Company Agfa Healthcare Canada A Air Zealand New Air Products Ltd. Canada AkzoNobel Inc. Canada Alamos Gold Inc. Alberta-PacificForest IndustriesAlcon Inc. Inc. Canada Allergan Inc. Canada Alterna Savings and Credit Union Limited Aluminerie Alouette Inc Ashland Inc. Ashland Inc. - Global Chemicals Ashland Inc. - Performance Materials Ashland Inc. - Valvoline Ashland Inc. - Water Technologies Assiniboine Credit Union Assomption, Compagnie mutuelle d'assurance vie Astellas Pharma Inc. Canada A Atlantic Packaging ProductsLtd. Atotech Ltd. Canada Autopro Automation Consultants Ltd. BASF Inc. Canada BHP Billiton - Ekati Diamond Mines J208 | Appendices 209 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 56 t Division Coatings Industrial - Inc. Canada PPG Siemens Canada Limited Canada Siemens Mackenzie Financial Corporation Financial Mackenzie r PPG Canada Inc. - Fine Chemicals Division Chemicals Fine - Inc. Canada PPG Wells Fargo Financial Corporation Canada Corporation Financial Fargo Wells Siegwerk Canada Inc. Canada Siegwerk MGI Financial Inc. Financial MGI Wal-Mart Canada Corp. Canada Wal-Mart PPG Canada Inc. Canada PPG Shore Gold Inc. Gold Shore MDA VPL Enterprises Ltd. Enterprises VPL P & H MinePro Services MinePro H & P Shoppers Drug Mart Corporation Mart Drug Shoppers Lowe's Companies, Inc. Companies, Lowe's Appendices | Votorantim Cement North America North Cement Votorantim L'Oréal Canada Inc. Canada L'Oréal Shire BioChem inc. BioChem Shire Linde Canada Limited Canada Linde Shiseido (Canada) Inc. (Canada) Shiseido Lotus Bakeries Lotus Oakrun Farm Bakery Ltd. Bakery Farm Oakrun . Inc Inc Viterra Viterra Omicron Omicron Sherritt International Corporation International Sherritt Lehigh Hanson Lehigh Vicwest Income Fund Income Vicwest Nycomed Canada Inc. Canada Nycomed The Shaw Group Limited Group Shaw The Lego Systems, Inc. Systems, Lego Vancity Savings Credit Union Credit Savings Vancity Valley First Credit Union, a div. of First West Credit Uni Credit West First of div. a Union, Credit First Valley Novo Nordisk Canada Nordisk Novo Servus Credit Union Ltd. Union Credit Servus Laurentian Bank of Canada of Bank Laurentian o Vale Inco Limited Inco Vale Novartis Pharmaceuticals Canada Inc. Canada Pharmaceuticals Novartis Sears Canada Inc. Canada Sears Lantic Inc. Lantic Uranium One Inc. One Uranium Nova Scotia Power Inc. Power Scotia Nova Scotiabank Lake Shore Gold Corp. Gold Shore Lake uniPHARM Wholesale Drugs Ltd. Drugs Wholesale uniPHARM May 2012 Repo Corp. Scotia Nova Pulp Northern Schneider Electric Schneider Labatt Breweries of Canada of Breweries Labatt Ultramar Ltée Ultramar North Shore Credit Union Credit Shore North SaskCentral LS Travel Retail North America North Retail Travel LS Trane Canada Co. Canada Trane Twin Rivers Paper Company Paper Rivers Twin Nordion Saint-Gobain Ceramic Materials Canada/Abrasive Mate Canada/Abrasive Materials Ceramic Saint-Gobain Kuehne + Nagel Ltd. Nagel + Kuehne North Atlantic Refining Atlantic North s ti ti -aven fi fi sano nc. I I LANXESS LANXESS Toromont CAT, A Division of Toromont Industries Ltd. Industries Toromont of Division A CAT, Toromont Newmont Mining Corporation of Canada Limited Canada of Corporation Mining Newmont Saint-Gobain Abrasives Canada Inc. Canada Abrasives Saint-Gobain r Kruger Products Kruger Tolko Industries Ltd. Industries Tolko Newfoundland Power Inc. Power Newfoundland SMS Equipment Inc. Equipment SMS The Korea Exchange Bank of Canada of Bank Exchange Korea The Timminco Limited Timminco Neopost Canada Neopost SEMAFO inc. SEMAFO Kinross Gold Corporation Gold Kinross TimberWest Forest Corp. Forest TimberWest Navtech Systems Support Inc. Support Systems Navtech SABIC Innovative Plastics Canada Incorporated Canada Plastics Innovative SABIC Kimberly-Clark Corporation Kimberly-Clark Thrifty Foods Inc. Foods Thrifty National Bank Financial Group Financial Bank National Russel Metals Inc. Metals Russel Kennametal Ltd. Kennametal Thompson Creek Metals Company Metals Creek Thompson NOVA Chemicals Corporation Chemicals NOVA Rothmans, Benson & Hedges Inc. Hedges & Benson Rothmans, Kellogg Canada Inc. Canada Kellogg Thales Rail Signalling Solutions Signalling Rail Thales Jubilant Life Sciences Limited - Draxis Pharma Draxis - Limited Sciences Life Jubilant NEI Investments NEI Rogers Communications Inc. Communications Rogers Katz Group Canada Ltd. Canada Group Katz Teekay Corporation Teekay Tembec Inc. Tembec Rio Tinto Iron Ore Iron Tinto Rio Mustang Survival Corp. Survival Mustang ici rsAcines(aaa Ltd (Canada) (Canada) Auctioneers . Auctioneers Bros Bros Ritchie Ritchie . Ltd ULC ULC Pharmaceuticals Pharmaceuticals Mylan Mylan Jubilant Life Sciences Limited - Draximage - Limited Sciences Life Jubilant Teck Resources Limited - Trail Operation Trail - Limited Resources Teck Rio Tinto - Fer et Titane Inc. Titane et Fer - Tinto Rio The Mosaic Company Mosaic The Johnson Inc. Johnson Teck Resources Limited - Highland Valley Copper Valley Highland - Limited Resources Teck Rio Tinto - Diavik Diamond Mines Diamond Diavik - Tinto Rio Morningstar, Inc. Morningstar, John Deere Limited Canada Limited Deere John Teck Resources Limited Resources Teck Richemont Canada Inc. Canada Richemont Morneau Shepell Inc. Shepell Morneau John Deere Credit Inc. - Canada - Inc. Credit Deere John Tech Data Canada Corporation Canada Data Tech RBC Dexia Investor Services Trust Services Investor Dexia RBC Montship Inc. Montship Janssen Inc. Janssen Taro Pharmaceuticals Inc. Pharmaceuticals Taro RBC Moneris Solutions Corporation Solutions Moneris J. H. Ryder Machinery Limited Machinery Ryder H. J. Takeda Pharmaceuticals North America, Inc. America, North Pharmaceuticals Takeda Puratos Canada Inc. Canada Puratos Mitsubishi Canada Limited Canada Mitsubishi Island Savings Credit Union Credit Savings Island Tait Electronics Ltd. Electronics Tait Prospera Credit Union Credit Prospera Michelin North America (Canada) Inc. (Canada) America North Michelin International Financial Data Services (Canada) Services Data Financial International Prudential o. Ltd. o. C Power &C & Pulp Basin Minas TELUS Communications Inc. Communications TELUS nc. I I roup G ors t tG nves I I . Inc , Inc Pacific Pacific TVI TVI Procter & Gamble Inc. Gamble & Procter Methanex Corporation Methanex Innophos Canada Inc. Canada Innophos TD Bank Financial Group Financial Bank TD Praxair Canada Inc. Canada Praxair Meridian Lightweight Technologies Inc. Technologies Lightweight Meridian Ingersoll-Rand Canada Inc. Canada Ingersoll-Rand Symcor Inc. Symcor Potash Corporation of Saskatchewan Inc. Saskatchewan of Corporation Potash Meridian Credit Union Credit Meridian Industrial Alliance, Insurance and Financial Services Financial and Insurance Alliance, Industrial Sun Life Financial Canada Financial Life Sun Pioneer Hi-Bred Limited Hi-Bred Pioneer McElhanney Land Surveys Ltd. Surveys Land McElhanney ITW Construction Products Construction ITW Sultran Ltd. Sultran Philips Electronics Ltd. Electronics Philips The McElhanney Group Ltd. Group McElhanney The INVISTA (Canada) Company (Canada) INVISTA State Street Trust Company Canada Company Trust Street State Pharmascience Inc. Pharmascience McElhanney Consulting Services Ltd. Services Consulting McElhanney ING Bank of Canada of Bank ING Standard Life Assurance Company Assurance Life Standard Phantom Mfg. (Int'l) Ltd. (Int'l) Mfg. Phantom McCormick Canada Co. Canada McCormick ICICI Bank Canada Bank ICICI Sonoco Canada Corporation Canada Sonoco M IA Clarin IA Sofina Foods Inc. Foods Sofina esC Canada PepsiCo PepsiCo Canada oup r oup G y G n y o o Anth rk a a ton Investments Inc. Investments ton g g Penske Truck Leasing Truck Penske Maritime Electric Company Electric Maritime Huntsman Polyurethane Huntsman Société en Commandite Tafisa Canada Inc. Canada Tafisa Commandite en Société Pan American Silver Corporation Silver American Pan Manulife Financial Manulife Hunter Dickinson Inc. Dickinson Hunter Sleeman Breweries Ltd. Breweries Sleeman PPG Canada Inc. - Performance Glazing Division Glazing Performance - Inc. Canada PPG Mainstream Canada Ltd. Canada Mainstream HumanWare Silver Standard Resources Inc. Resources Standard Silver – D D x di di ppen A A iSOiti O or t ec S e t va i r PitStO P ons ti za i rgan (cont’d) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 57 (cont’d) ons ti za i rgan O or t ec S e t va i r PitStOP iti – D . x Ltd . di Co Timber a d ppen ana C Fraser h A di D c i ur © 2012 Hay 2012 Hay ©Group. All Rights Reserved Wescast Industries Inc. Industries Wescast West Fraser Timber Co Ltd Z i hC d Westminster Savings Credit Union Winners Merchants International L.P. Xstrata Canada Copper Yara Belle Plaine Inc. Zellers Zellstoff Celgar Partnership Limited J210 | Appendices 211 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 58 t r Appendices | Appendices | be considered in the analysis the in considered be Only those noncash programs programs noncash those Only over and above minimum statutory requirements would would requirements statutory minimum above and over May 2012 Repo employe -paid portion only portion -paid r For comparison purposes, pre-tax benefit cash cash benefit pre-tax purposes, comparison For equivalent values take into account the the account into take values equivalent received given the plan provisions plan the given received reasonable cash equivalent value for the respective benefit items — level of benefit benefit of level — items benefit respective the for value equivalent cash reasonable pp assum actuarial remiums, p p lacement cost to determine a a determine to cost lacement p re current and/or tions p Hay Group has developed a proprietary a developed has Group Hay method based on standard demographics, demographics, standard on based method organization rmoeognzto oaohr ree ewe ifrn nt ihntesame the within units different between even or another, to organization one from from different between even or another, to organization one same the within units practices, etc. Thus, programs with ident with programs Thus, etc. practices, ical formulae can have widely differing costs costs differing widely have can formulae ical the composition of the group, claims claims group, the of composition the experience, funding method, and accounting accounting and method, funding experience, organization's cost for a noncash program is is program noncash a for cost organization's affected by numerous variables, such as as such variables, numerous by affected Cost is one of the most commonly used m used commonly most the of one is Cost easures but not the most ideal. An An ideal. most the not but easures - E E x di di ppen A A i iMt l d th M ti l V s fit fit ene B B h h oncas N N o th e M on ti ua l a V ogy l o d REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 59 s i ence ys l l na A reva ence l P s reva P Analysis fit s fit ene ene B fit P l A l i – B fit P l F x di ppen A di F © 2012 Hay 2012 Hay ©Group. All Rights Reserved J212 | Appendices 213 appendix J Appendix F - Benefits Prevalence Analysis Prevalence Benefits - F Appendix 6 of 1 Page t r Appendices | Appendices | $3,750. is coverage maximum child. + Coverage child. per for and $7,500 recipient benefit eligible an for $15,000 child’s typical the and $10,000 is coverage maximum spouse Typical each for $7,000 and spouse for $78,000 is coverage the average, On = paid. Member 100% paid. employee are 77% paid; employer fully are plans of 15% paid. employee are 55% paid; 28% employer are Premium Paid Employer em ible. g eli are ees y lo p May 2012 Repo = Eligibility Plan. Choice Members' insurance. life dependent offer employers of 76% all which for insurance life dependent offer employers the of 84% Insurance Life Dependent = paid. employee are 83% paid. 100% employee are Premium Paid Employer ible. g eli provided. Not benefits. AD&D optional offer employers the of 35% Eligibility are employees all which for AD&D optional offer employers the of 38% Dismemberment & Death Accidental Optional $400,000. of maximum salary. = salary. base of 200% is coverage the average, On Coverage a to insurance life core of amount Member's the to is equal Benefit base of 200% or $100,000 of amount dollar flat a is coverage typical The = Salary. Annual amount. dollar flat a use and 46% salary base use 54% benefit. of calculation for salary base use 71% Earnings of Definition p cost. remium p the share cost. remium = Insurance. Life Group by Covered Premium Paid Employer to employees require plans of 31% paid; employer are plans of 69% the of 50% shares employer the plans of 12% paid; employer are 71% ible. g eli = Plan. Choice Members' under automatic is Coverage basic AD&D. offer employers the of 76% Eligibility are employees all which for basic AD&D offer employers the of 83% Dismemberment & Death Accidental Basic paid. = Premium Paid Employer paid. Member 100% paid. employee are plans of 92% employee 97% are cost; premium the shares employer the plans of 3% ible. g eli are = Insurance. Life Enhanced Yes. insurance. life group optional offer employers the of 76% Eligibility employees all which for life group optional offer employers the of 77% Life Group Optional member. by paid entirly premium years retirement. after coverage reduce retirement. after + Coverage Retirement five After split. premium same at rerun to not chooses or defeated, plans remaining the retirement; upon coverage the terminate 59% coverage reduced have 45% age; retirement normal after terminate 53% is resigns, member after years five up to benefit extend to Option + salary. base of 200% is coverage the average, On Coverage salary. annual of 200% is coverage typical The $400,000. of maximum a to Salary Annual 3x or 1x Salary"). ("Annual committees and government Legislature for remuneration earnings. on based = benefit. of calculation for salary base use 89% Earnings of Definition and allowance Members' special MLA, than other offices for not benefit 12% benefit, of calculation for salary base use plans of 88% remuneration allowance, RRSP allowance, free ‐ tax and indemnity MLA cost. remium p remium. p full the y a p ‐ cost. premium the 66% of shares Assembly Legislative Premium Paid Employer or share to employees require 47% and paid employer are plans of 53% the of 50% shares employer the plans of 12% paid, employer are 68% = insurance. basic life offer employers the of 100% eligible. are employees all which for life group basic offer 100% Eligibility Insurance. Life Core ‐ Plan Choice Members' Life Group Basic Benefits Group Sector Public Broader Organizations Government MLA REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report ‐ ‐ = = + = + = return to work. No Appendix F - Benefits Prevalence Analysis maximum. MLA resigns position. No member Salary. Plan. Annual Choice Salary. Legislative Assembly paid. provided. provided. Starts immediately after Annual Not provided. Not 100% Members' Not of 9% at full CPI, of employee 4 weeks dollar an average 10% based on maximum. 70% of recurring is 82% or a flat life monthly paid. of benefit. of benefit. coverage no disability. use discretionary amount. benefit averaging schedule. disability. Organizations child’s accident insurance. term pay. employee of employee are a uniform accumulative sick days with for calculation for calculation remainder a service 50% at 75% the typical is 40% of earnings with and Government Page 2 of 6 and Of those that offer indexing, 68% based on based on paid. paid. maximum of $2,500. based on is ear. coverage are are y are used by 100% used by 100% by 20 weeks dollar er percentage, p s employer employer y spouse coverage of plans of plans of the employers offer long of employers offer short term salary is salary is are of employers offer dependent are offer indexing. or a flat maximum of $5,000 pay followed • 35% Typical Base Base Typical life 29% 100% 16.5 da • 59% 29% 65% 40% 100% • 6% of plans use a fixed all of with to 26 pay; from 2 to for each of to share of the plans employees for which at full days. reduced by an average all aid. of service increasing 100% p $30,000 141 ee is and y and of the Consumer Price typically lo p 91 days; 25% for which by 12 weeks of benefit. for which are em paid. 100% sick days with Sector of service are accident insurance for spouse require the employee benefit regardless disability followed schedule; the benefit varies lans maximum benefit of $5,000 disability p of benefit. days; the average employee The benefits of service. pay, of for calculation term are of plans 180 accumulated service uniform $130,000 ears the first year 33% y Broader Public is plans 72% 11% at 70% $8,400. increases based on 20 to a monthly is all ible. ible. Benefits. based on based on based on paid; paid; g g pay after after start benefit payments after ; y eli eli are are are a used for calculation used in ear p remium cost. y the coverage p of 14 weeks are are at full er Disability the average p employer employer ees ees ible. s y y at full g of plans of plans of plans y of employers offer short term of employers offer long salary is salary is lo lo of the plans offer cost of living are are of the of the employers offer dependent of base salary up eli p p weeks are 14 da • 33% 100% to 4 weeks • 21% start benefit payments after child. On average, 10% $15,000; 34% 50% CPP/QPP • 43% an average Base Index. 32% 49% 68% Base em em 100% (STD) (LTD) Insurance Accident of Earnings of Earnings Period Term Disability of Living Coverage Eligibility Short Coverage Dependent Employer Paid Premium 15% Employer Paid Premium Definitions Waiting Coverage Cost Eligibility Definitions Long Term Disability Eligibility J214 | Appendices 215 appendix J Appendix F - Benefits Prevalence Analysis Prevalence Benefits - F Appendix 6 of 3 Page t r Appendices | Appendices | covergae. Enhanced for Maximum No orthodontics. for lifetime $2,500 orthodontics. for time) (life $2,300 = Coverage Maximum covergae. Core for and year per $1,600 is services major for maximum the average, On and services, major for (annual) is $1,600 maximum the average, On orthodontics for lifetime $2,000 and services major and basic for $2,000 50%. at reimbursed are 63% which coverage. = Services Major restorative. major for 60% is reimbursement Average of orthodontia and crowns inlays, dentures, bridges, include Services Enhanced for 80% and coverage Core for 50% rate is Reimbursement 100%. at reimbursed are 62% and May 2012 Repo 80% coverage. 95%. is reimbursement average = at reimbursed are 25% which of periodontics and endodontics repairs, Services Basic Enhanced for 100% and coverage Core for 80% rate is Reimbursement The 100%. or 80% is services basic for rate reimbursement Typical denture maintainers, space services, preventative include Services reimbursement. = Guide Fee Provincial emusmn.Yes. reimbursement. for guide fee dental year’s current the use plans of 88% for guide fee dental year current the use plans the of 88% . y famil for $45 and le g sin for . y famil for $76 and le g sin for $54 is deductible annual = applicable. Not Deductible Annual $22.50 is deductible annual average the deductible; annual an have 25% average the required, If deductible. annual an require not do 84% coverage. paid. Assembly Legislative 71% = Premium Paid Employer coverage. family and employee both for paid employer are 75% family and employee both for full premium the pay employers of 74% coverage Enhanced coverage. Core paid for Assembly Legislative 100% ible. g eli = Plan. Choice Members' benefit. care dental offer employers of 94% Eligibility are employees all which for benefits care dental offer employers of 93% Benefits Care Dental maximum. lifetime $660,000 to up + 98%. is reimbursement average the expenses; country of cover out 93% Expenses Country of Out $2,000,000. to up 100% at Reimbursed 96% is reimbursement average the expenses; country of out cover 88% = rates. AB at Reimbursed 95%. is reimbursement average the expenses; province of out cover 94% 97%. is reimbursement average the expenses; province of cover out 90% Expenses Province of Out 94%. + Ambulance covered. 100% is reimbursement average the transportation; ambulance included 96% ractitioner. p er p ear y er p $580 to ear. y er p $600 to p u + year. per $1000 of maximum Combined Paramedical up 89% is reimbursement average the services; paramedical cover 94% 92% is reimbursement average the services; paramedical included 97% ear. y er p ear. y er p + years. 4 every $2,000 Aids Hearing $220 to up 87% is reimbursement average the aids; hearing cover 88% $180 to up 93% is reimbursement average the aids; hearing cover 94% ears. y 2 y ever 240 $ years. 2 every $230 to months. 24 every $350 ‐ Vision = to up 97% at is reimbursement average the 100%; at reimburse 83% and Care Vision months; 24 every $100 to up ‐ Examination Eye up 91% is reimbursement Average care. vision offer employers of 94% 80% at reimburse plans the of 15% which of expenses vision cover 92% 85%. is reimbursement 100%. at reimburse 47% and 80% at reimburse = 100%. at Reimbursed Drugs average The expenses. drug cover plans care health of 100% plans the of 36% which of expenses drug cover plans care health of 98% 97%. is 96%. of reimbursement average with coverage private offer 82% 96%. = reimbursement average and cost the of 100% at reimburse plans of 85% Board and Room Hospital 100%. at reimbursed coverage private ‐ Private/Semi of reimbursement average an with coverage private ‐ semi offer 94% where coverage hospital private offer and 47% private ‐ semi offer 91% sin famil for $82 and le g . y famil for $60 and le g . y sin for $44 is deductible + applicable. Not Deductible Annual for $47 is deductible annual average the deductible; annual an have 65% annual average, On deductible. annual an is there indicated 37% covera e. g e. g covera ‐ cost. premium the 50% of shares Assembly Legislative Premium Paid Employer family and employee both for full premium the pay employers of 71% family and employee both for full premium the pay employers of 69% g eli are ees y lo p ible. em = health extended offer employers of 100% benefits. care Plan. Choice Members' Eligibility health private offer employers of 97% all which for benefits care Benefits Care Health Sector Public Broader Organizations Government MLA REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report ‐ ‐ = a can be as a RRSP limit has served to receive RRSP allowance Appendix F - Benefits Prevalence Analysis the RRSP allowance This entitled is each MLA who For 2011, year (Canada). plan, MLA a fiscal in of the maximum RRSP deduction of a DC plan. lieu have a pension months to 50% not by the Income Tax Act equals of three to $11,225. MLAs do provided. allowance established minimum seen as payment in equals While Not provided. Not of 6.6 per in of are to 100% Plans. of SERP equal 25 years of service 2.0% above, Pension benefits; 29% earnings. contributions survivor pension. 55 plus benefit type Typically only. and the benefit. retirement at age to YMPE and plan Average joint 55% Organizations average adjustments. offer a defined pension 2% of earnings per year to calculate on 60 months. 65% of earnings up is typically contributions. bonus (CRA) maximum for registered typically Government Page 4 of 6 1.4% is available, benefit (DB) period is Agency have cost of living to the YMPE, then 9.1% of excess number of 85. use base salary to calculate average require employee “magic” form of payment is Revenue final benefit level is of CRA limit. have a defined use base salary plus Benefit formula of service. of the plans of DB plans plans excess plan. Of those that offer a DB plan, Canada 94% Unreduced pension service; of the CPI increase. Not prevalent. 100% Typical 71% plans Typical year % of earnings up All to of or are 7% 30 or plans; type of SERP and to 60% have a defined of both RRSP, of earnings up equal earnings; 17% benefits. 55 or 60 plus survivor pension. Normal benefit type contribution Group age only, 28% and 4% ‐ 8% are typically plan joint benefit. retirement Sector 40% of earnings. 2.0% above. earnings. 60 or 62; 60% offer a defined offer a defined plans; pension adjustment to contribute 7% have a combination at age 3% ‐ 7% of earnings. 5% ‐ 10% maximum under SERP. 74% 25% the CRA limit). (DB) of DC formula. typically no to YMPE and best five consecutive year Broader Public Pension of the excess and only, and available ears. y as below contribute is benefits contribute "magic" number 85 or 90. eligible. plan based on plans. continuation are of payment is have a cost of living use base salary to calculate use base salary to calculate are require employees (DC) typically typically best three of service; Money Purchase form Typically of the CPI increase. ‐ 1.5% of earnings up (same formula are of plans have a defined of plans of plans combination employees plan Of those that offer a DB plan, 53% SERP. Of those that offer a DC plan, 100% 35 years Normal Unreduced pension CRA maximum for RPP 94% are contribution all 63% 98% based on 81% 1.3% the YMPE, then 5% ‐ 10% Plan Period Plan Plan Earnings Adjustments earnings 79% of plans Earnings 86% of plans Benefits Average Contribution (DC) Benefit (DB) of Living Defined DC Plan Type DB SERP DC SERP DB Early Retirement DB Benefit Maximum DC Employer Contribution Employers DB Normal Retirement DC Pensionable DC Employee Contribution Employees DB Cost Retirement Registered Pension Defined DB Pensionable Eligibility DB Employee Contribution DB Final DB Benefit Formula J216 | Appendices 217 appendix J Appendix F - Benefits Prevalence Analysis Prevalence Benefits - F Appendix 6 of 5 Page t r Appendices | Appendices | licensing. for applicable. where repairs Cost Operating paid. employee is use personal paid, employer is use Business pay also 33% maintenance. and repairs gas, and insurance, for pay 67% and gas insurance, license, employees’ for the pay employers of 100% Chair. Deputy and Speaker, cars. leased company provide cars. leased company provide May 2012 Repo ‐ Plan of Type Deputy Speaker, Ministers, to available vehicles owned Government cars; 20% owned company provide 40% allowances; car provide 40% cars; 13% owned company provide 11% allowances; car provide 77% members. certain Only for Yes. executives. to allowance car car or company a offer organizations of 29% executives. to allowance car car or company a offer organizations of 36% Eligibility Allowances Car/Car Company Benefits Other and Perquisites vacation. annual regular the over Detains Plan years, 25 every vacation of week additional one employees offer Plans minimum. service ear y 25 a uires q re y icall yp t applicable. Not Eligibility benefit The vacations. extended employees offer employers of 8% ‐ Bonus Vacation/Vacation Extended 6 25 6 25 5 20 5 20 4 10 4 10 3 1 4 ‐ 3 1 Weeks Year(s) Service Weeks applicable. Not Year(s) Service Granted Vacations Vacations ‐ Provided. Not average. on year per holidays 12 days 13 to 11 days of Number Holidays Vacations salary. highest their received Member the which in years calendar three the of salary monthly average the on based date, that to subsequent 37.95%. sum. lump + service of year each for months three plus 1989 20, March to calculation Benefit of maximum a to up service year of per earnings of 1.34% Averages in a payable and maximum, specified a year to per earnings of 3% to 1% prior service of year each for month one by multiplied Member, the by received allowance expense and indemnity monthly of rate highest The committees. government and Legislature for remuneration and allowance Members' special = benefit. of calculation for is used salary Base earnings of Definition service. of year per earnings of on percentage based 100% offices for remuneration allowance, RRSP allowance, MLA, than other free ‐ tax and indemnity MLA the includes salary monthly Average + sum. minimum). service year 10 a (usually requirement service a have Eligibility in payable Allowance), (Retiring Allowance Transition sum. lump retirement a have 41% employees offer employers of 29% lump in pay plan with those of 100% allowance. allowances retiring 89% which of Allowance Retirement Sector Public Broader Organizations Government MLA REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report = = = + = = = Appendix F - Benefits Prevalence Analysis MLA owned by employer. facility by Legislative Assembly. provided. provided. Yes. Onsite fitness 100% Legislative Assembly paid. Not Yes. 100% paid Not provided. Not are 75% maximum of employees all advisor. basis; or garage. Company ‐ owned lot. service preparation. for which to an average an annual on club. facilities of the cost. Organizations owned by the employer. the cost up by an outside counseling/tax of the cost. of provided and 100% fitness of the cost. memberships. are 75% 75% provided 100% onsite Government Page 6 of are are services needed.” employers cover ible. g of these employers have a company owned lot annually. of the facilities of employers offer onsite of employers offer parking facilities. of counseling of employers offer financial of employers cover provided. eli rovided “as 50% p 12% are 25% 100% 50% of these employers cover 100% of the services Typically, 59% Not 18% of employers offer club 33.3% offer country club/recreational 66.6% offer corporate dining. 66.6% of employers cover $500 24% 75% are eligible. 55% are are basis; employer. of facilities employees an annual all Sector on advisor. club. owned by single preparation. for which service provided and of the cost. of the cost; 11% are Broader Public 100% 100% facilities onsite counseling. of the cost. of the cost. are counseling/tax examination. ‐ paid. services by an outside 100% 100% fitness memberships. needed”. by the employer. covers provided employer have a company ‐ owned lot. of the facilities are provide parking facilities. offer onsite offer physical of employers cover offer club offer country club/recreational offer corporate dining. provide individual offer financial are of counseling rovided “as 80% p 72% of employers cover 44% 83% 68% Employer subsidized 65% 27% 29% 13% 17% Employer covers 90% 35% 29% 70% 15% Counselling/ Tax Preparation Examination Provider Memberships Parking Eligibility Type of Facility Employer Paid cost Fitness Facility Eligibility Type of Facility Service Physical Eligibility Employer Paid Cost Employer Paid Cost Club Eligibility Type of Memberships Employer Paid cost Financial Eligibility Type of Counseling Employer Paid cost Frequency of Services J218 | Appendices 219 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 60 t r provided by the Legislative Assembly of Alberta. of Assembly Legislative the by provided (1) Non-taxable expense allowance grossed up based on the combined combined the on based up grossed allowance expense Non-taxable (1) federal and provincial marginal income tax rate. For Alberta For rate. tax income marginal provincial and federal , amount as as amount , Appendices | Appendices | $37,439 $53,485 $88,571 $13,371 $69,531 Yukon $89,300 Saskatchewan $45,465 $64,947 $89,300 $64,041 $89,657 $108,418 $15,538 $85,388 Quebec May 2012 Repo $65,344 PEI $45,688 $71,094 $65,344 16550 550 , $116 $116 550 550 , $116 $116 o i i ar t n Ot O 4 301 301 , $49 $49 424 424 , $92 $92 $90,396 Nunavut $70,109 $83,287 $90,396 $86,619 Scotia Nova $47,609 $109,485 $86,619 $51,709 $73,482 $106,574 $6,962 $96,615 Territories Northwest Labrador and Newfoundland Newfoundland 9 357 357 , $95 $95 357 357 , $95 $95 Labrador and 5 072 072 , $54 $54 824 824 , $74 $74 $85,000 Brunswick New $52,614 $79,000 $85,000 $85,564 Manitoba $36,745 $55,944 $85,564 $101,859 Columbia British $50,930 $91,673 $101,859 Commons of House House 17731 731 , $157 $157 731 731 , $157 $157 Commons of 7 516 516 , $75 $75 731 731 , $157 $157 Alberta $52,092 $26,046 $90,708 $81,312 $63,912 Allowance 1 Allowance (Indemnity) Taxable Non Portfolio Expense taxable Non Base Annual Jurisdiction Ministe First r up up ‐ Grossed Grossed with with Total Total with with Minister Minister Member ititSkCitdt lS i Sl Rl dOth t Cbi k S er, t s i n Mi tMiit t rs Fi Fi ne bi a C er, k pea S e l o R er Oth d an t es i ar l a S Appendix G – Member Indemnity & Expense Allowance; Allowance; Expense & Indemnity Member – G Appendix REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 61 179 033 Leader , , $0 $0 $0 Opposition Opposition es $8,000 $4,339 $6,462 i $13,287 $29,886 $10,300 $20,372 $13,596 $39 179 $27 033 $21,329 House ar Official l a S a Party 8 of e 694 918 l , , $0 $0 o $22,732 $19,750 $29,886 $16,764 $40,713 $41,60 $16,046 $23,804 $28,392 $25,465 $53 694 $18 918 Leader Recognized R Opposition er r 179 033 Oth Speake , , $9,047 $6,804 $13,287 $26,307 $29,886 $19,237 $17,249 $18,079 $31,968 $10,697 $23,804 $35,651 $39 179 $27 033 d Deputy an t Official Official ne 516 072 , , the the $0 $0 bi of of $45,465 $55,300 $64,041 $45,931 $45,688 $63,912 $64,336 $37,439 $75 516 $54 072 $47,609 $50,930 Opposition a C Leader er, r k 516 072 , , $45,465 $52,614 $64,041 $70,109 $63,912 $45,931 $38,474 $75 516 $54 072 $42,053 $36,364 $26,743 $47,609 $50,930 Speake pea S or d er, ra t b a L Lb d s d d i an Territories n Scotia Commons Commons d Columbia PEI Brunswick of of an Yukon Alberta Quebec Ontario Nunavut Manitoba dl Jurisdiction Nova Mi Saskatchewan New British oun t f House Northwest ew rs N f dl d Appendix G –Appendix G Member Indemnity & Expense Allowance; SFitMiit Fi k Cbit Sl i dOthRl © 2012 Hay 2012 Hay ©Group. All Rights Reserved J220 | Appendices 221 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 62 t r http://nslegislature.ca/pdfs/people/pensionreview2011.pdf Report; Review Pension MLA Scotia Nova http://www.parl.gc.ca/marleaumontpetit/DocumentViewer.aspx?Lang=E&Sec=Ch04&Seq=13 Practice; and Procedure Commons of House Appendices | Appendices | Alberta of Office Assembly Legislative the by provided Information Reference: Yukon allowances and salary annual 3/12 months 12 of maximum a to month 1 of minimum a for service of year per indemnity annual 1/12 Saskatchewan months 12 of maximum a to months 4 of minimum a for service of year per indemnity annual 2/12 May 2012 Repo Quebec earnings. covered are allowances committee and allowance members' special indemnity, PEI 1 annual to addition In months. of maximum a a to to months months 1 of of minimum minimum a a for for service service of of year year per per indemnity indemnity annual annual 12 / / annual to addition In months. 12 of maximum service. of months 36 consecutive paid highest the on based salary Average service. of years 8 than more for salary average Ontario months' 18 and service of years 8 ‐ 4 for salary average months' 12 service, of years 4 than less for salary average months' 6 months; 18 of maximum a to months 6 of minimum a for service of years by determined as indemnity annual of % months 12 of maximum a to months 1.5 of minimum a for service continuous of year each for pay weeks Six Nunavut th 12 f i t th mon 3 3 f f o mum i n i ii m a or f f ce i i serv f f o year per y it it emn d d n i i l l annua 1/15 1/15 a ti ti co S S ova N N s th mon 12 f o mum i max a o t s th months 12 Territories Northwest of maximum a to months 4 of minimum a for 1999, 6, December after service of year consecutive each for indemnity annual 1/12 months 12 of maximum a to months 3 of minimum a for service of year per indemnity annual of 81.2% of 1/12 Labrador and Newfoundland months 6 of maximum a to month 1 minimum a for service of year per indemnity annual 1/12 Brunswick New process nomination the in defeated defeated are are or or again again run run not not to to choose choose who who members members for for months months . process nomination the in Manitoba 6 of maximum a months; 12 of maximum a to months 6 of minimum a for service of year consecutive per indemnity annual 1/12 Columbia British months 15 to up months 4 of minimum a for service of year per indemnity annual 1/12 offices certain occupying Members to payable salary annual any and indemnity sessional annual basic the of 50% Commons of House service. of years Alberta id t h hi th bd l thl A i t ith i serv f f o year h h eac or f f ary l l sa y thl thl mon average 3/12 3/12 d ase b ary l sa y thl mon verage A mum. i max t ou ith w ce i id pa t es h g hi ree th on Jurisdiction Allowance Transitional t iti c di di s i i ur J J er Oth Oth ons ti Appendix H – Member Transition Allowance, Allowance, Transition Member – H Appendix REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report 63 9% 10% = = Contribution Contribution Contribution Plan: Plan: ons Member Member Member ti 9%, 10%, c = Contribution Contribution Comments = di s Defined Defined i Contribution Contribution Contribution ur J Employer Employer er N/A Oth J i di ti – % 9% 8% 9% 9% 9% 7% 9% 7% 9% Contribution 10% 11% ons i Member ens P Earnings 3 3 5 4 4 5 4 3 3 Career Period Career er Average b % em M bP i Accrual 4% 4% 4% 2% 3% 5% 3% 5% 3.50% 3.50% – I Benefit x di Labrador 3.50% a b and Territories to Commons Scotia i Columbia PEI Brunswick of an Yukon Alberta Ontario Quebec Nunavut MibM ppen Jurisdiction Nova Saskatchewan New British A di I House Northwest © 2012 Hay 2012 Hay ©Group. All Rights Reserved Newfoundland J222 | Appendices 223 appendix J © 2012 Hay Group. All Rights Reserved Rights All Group. Hay 2012 © 64 t r Appendices | Appendices | May 2012 Repo cons d) d) ere id id values related to share compensation compensation share to related values arrangements (i.e. realized value is not not is value realized (i.e. arrangements es the binomial model to estimate such such estimate to model binomial the es us Group Hay instruments. incentive term Ideally, it permits equitable comparison betw comparison equitable permits it Ideally, een the values of different types of long- of types different of values the een rsn reooi au srqie oapoiaetefi au tgatdate grant at value fair the approximate to required is value economic or present present A A approximate to required is value economic or . date grant at value fair the unit or bonus payments and similar arrangements similar and payments bonus or unit phantom share and stock options arrangement options stock and share phantom s, cash based multi-year performance performance multi-year based cash s, more than one year. They include stock options, per options, stock include They year. one than more ff f o period ormance shares, shares, ormance f Long-term incentive plans reward individuals individuals reward plans incentive Long-term for corporate or unit performance, over a a over performance, unit or corporate for - J J Appendix Appendix emIcnie(T)Valuation (LTI) Incentive Incentive Term Term - Long Long Valuation (LTI) REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report K Aon Hewitt Report 224 | Appendices 225 appendix K t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report K226 | Appendices 227 appendix K t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report K228 | Appendices 229 appendix K t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report K230 | Appendices 231 appendix K t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report K232 | Appendices 233 appendix K t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report K234 | Appendices 235 appendix K t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report K236 | Appendices 237 appendix K t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report L Transcripts from the January 23rd, 2012, public hearings in Edmonton 238 | Appendices 239 appendix L t r Appendices | Appendices | 1 - 4 May 2012 Repo Transcript 27- Transcript 2012 Major, CC, QC and Benefits Review Benefits and (Jack) (Jack) January 23, January 1:03 p.m. 1:03 , Edmonton John C. Monday Transcript of Public Meeting Public of Transcript Legislative Assembly of Alberta Assembly Legislative ourable Compensation MLA Hon REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Witnesses Cheryl Scarlett Director, Human Resources, Information Technology and Broadcast Services, Legislative Assembly Office Presenters Grant Dorosh Private Citizen Scott Hennig Alberta Director and National Communications Manager, Canadian Taxpayers Federation Dr. Dinesh Moonshiram Private Citizen Ray Speaker Former Member of the Legislative Assembly of Alberta and Former Alberta Member of Parliament L240 | Appendices 241 appendix L t - r -1 general MLA Appendices | Appendices | free allowfree - -free allowance. free allowancefree equivalent - May 2012 Repo s a link for reference as will mbly Act and as authority authority as and Act mbly by the Legislative Assembly on Assembly Legislative the by ative Assembly is the paymaster the is ative Assembly lowances, travel expenses, and payments payments and expenses, travel lowances, y earnings for Alberta as reported by Statistics by as reported earnings for Alberta y The material The speaking to today you’re bealso will mber compensation adjustments is in accordance accordance in is adjustments compensation mber three They’re 3. and 2, 1, as be marked will Those Yes, they are. Yes, it Yes, will. Edmonton : : : : Major Major free allowance.-free TheLegisl Scarlett Scarlett With respect to With their remuneration MLA all remuneration, as I Of note: all member remuneration is paid based on working 365 on working based paid is remuneration member all note: Of In addition, all members receive a tax All members receive an MLA indemnity and tax and indemnity MLA an receive members All Members’ compensation decisions per the Members’ Services to back adjustments historical the of summary a you for have I chart, remuneration MLA the you for table to point this at like I’d When looking at the remuneration chart, one will see that there In addition to the member remuneration member the to addition In chart, there’s also a link illness entitlements nor any vacation entitlements or other leave entitlements vacation nor any entitlements illness entitlements. is committees on government service for payments for except stated, set pursuant to the Legislative Asse down to Members’delegated the Services Committee. I providewill on our is posted chart this and chart, remuneration a current to you the bewebsite, and Assembly, Legislative on MLAwill the compensationreview website as wella today. I that make other tablings all Justice available at the back of the room when we’re finished? f expenses of recognition in indemnity the of cent per 50 to The $26,046. is money of amount That duties. their to incidental In addition, members may be eligible for additional pay based on based pay additional for be eligible may members addition, In indemnity MLA the to in addition roles various for appointments and tax of on behalf made payments those including remuneration, all for payments of types these of example An Alberta. of government the committee government and pay, minister Premier, include would processed Payments remuneration. the to reimbursed and back charged are government the of behalf Legislative Assembly by the government. days per year. As a result, members do not have casual or government of Alberta as detailed in appropriate orders in council orders. or ministerial that are made under the MLA pension plan and the public service service public the and plan pension MLA the under made are that plan. pension current the However, years. the throughout have varied Committee me for formula 1998, 5, on October made committee the of decision the with on adjusted be to are remuneration member of components whereby April 1 of each year by the same percentage increase or decrease as the average weekl the for Hours and Payrolls, Employment, of Survey Canada’s immediately preceding calendar year. is important it think I on our website. posted is too, this, and 1989, to the note it that decisionwas of to committee the increases freeze years. fiscal three last the for remuneration member for the link to the selected payments, compensation and historical the adjustment. Justice separate subjects? Mrs. members All remuneration. member of components various are are eligible to receive an MLA indemnity and a tax annum. per $52,092 is indemnity MLA current The ance. 1:10 Mrs. to Report Selected the something called to Payments of the site. on our posted is too, it, and Members, Former and Members including all to members, payments of details provides report This al benefits, remuneration, - e, ormation ormation e exception of of exception e nd benefits are nd benefits January 23, 2012 23, January he benefit of the the of benefit he , MLA Compensation and Benefits Review – Review Benefits and Compensation MLA Monday ed1 cember of 2005. On my return to Calgary I Calgary to return my On 2005. of cember Good afternoon, ladies and gentlemen, and thank thank and gentlemen, and ladies afternoon, Good , Director, Human Resources, Thank you, Justice Major. My name is Cheryl Cheryl is name My Major. Justice you, Thank 2012 23, January : , : remuneration, benefits, and entitlements as they exist exist they as entitlements and benefits, remuneration, e Assembly. Of course, recommendation any by made Major Monday Scarlett he task of this commission is to make recommendations to the the to recommendations make to is commission this of task he As As far as personalmy background is concerned, I’ve practised T to report will I factors of range wide the of consideration After province a through input seeking I’m review this of part As overview brief a provide to is presentation today’s of intent The I would now like to introduce to the group our first witness. witness. first our group the to introduce to like now would I The authorities that govern members’ pay a pay members’ govern that authorities The REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Title: Title: [Justice Major in the chair] Justice determined in accordance with the Legislative Assembly Act and, as and, Act Assembly Legislative the with in accordance determined the through Committee Services Members’ the to delegated Assembly act, the Members’ Services Committee orders. Members’ the th set in authorities is accordance with with pay their of recognition in receive may members that remuneration serviceon government committees. The authoritythese for the is the government committees, by determined appointments, 1:03 p.m. 1:03 January 23, 2012 23, January joined the Alberta Securities Commission as an independent independent an as Commission Securities Alberta the joined to commissioner as appointed was 2006 I May In member. and 182 flight India Air of crash the into inquiry an conduct 2010. in that on report a published as a lawyer in Alberta since 1957. I then went to the Alberta Court 1992, in Canada of Court Supreme the to and ’91 in Appeal of I until stayed De where for benefits and compensation regarding of Alberta Assembly will to we do In trying so, Assembly. of Legislative the Members members’ current including factors, of number a encompass comparisons. crossjurisdictional and levels, benefit , compensation That 2012. of by April Assembly Legislative the of Speaker the the in debated recommendations its and tabled be will report Legislativ and they of the Assembly, wishes is to the subject this committee down. it vote or in it vote can of members’ with information providing be I’ll today presentation the In today. and plan, pension MLA benefits, health pay, members’ to respect the transition allowance. Scarlett. the I’m director of human resources, inf you for being here. My name, as you may know, is Jack Major. Major. Jack is know, may you as name, My here. being for you and compensation the of review independent an conducting I’m the at Assembly Legislative the of Members to provided benefits Assembly. that of Speaker the of request to opportunity the public the giving process, consultation wide elected think their on they what views their express representatives should be paid and under what circumstances that be done. should t for please, yourself, identify you Would audience? Cheryl Scarlett Information Technology, and Broadcast Services Office Assembly Legislative Mrs. technology, and broadcast services with the Legislative Assembly Assembly Legislative the for work that staff The Alberta. of Legislative the of Members the and Speaker the support Office administrativ procedural, nonpartisan providing by Assembly and educational services. The responsibilities for the human the with rests and benefits pay members’ of administration resource services branch of the Legislative Assembly. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-2 MLA Compensation and Benefits Review – Edmonton January 23, 2012 authority for the tax-free allowance portion of remuneration is category C. Presently we do not have any category B committees, pursuant to section 81 of the Income Tax Act, Canada. Again, I and the remuneration for categories A and C, as detailed on the have a copy for you of that excerpt. chart, provides that any member can be paid for up to a maximum of three committees, not to exceed a maximum payment of Justice Major: On that subject, which causes a lot of confusion, the $3,500. So, as detailed, if appointed as chair to a Legislative effect of the tax-free allowance is an exemption permitted under the Assembly committee, the chair would get $1,500 per month, a Income Tax Act. In a manner of speaking you can describe that in deputy chair is eligible for $1,250 per month, and a member another way as being a contribution to Alberta MLAs by the federal would receive $1,000 per month, not to exceed a payment of government. Is that not so? I’m correct on that? $3,500 and not to be paid for any more than three committees. In addition, the Speaker and opposition leaders receive $3,500 Mrs. Scarlett: Yes. We have done a quick, rough calculation. per month in lieu of all committee participation. Currently members receive a total of $78,138 per annum. If we were As I referenced earlier, a member may also be entitled to to not have the tax-free allowance, based on our rough calculations remuneration pursuant to any appointments on government member remuneration would need to be approximately $90,700 to committees. However, the Legislative Assembly is not responsible provide an equivalent net remuneration to the members. Of interest for those appointments; rather, the remuneration for that is set by in that calculation is that the difference in the increased remun- the government of Alberta. Presently the current authority for eration amount is also almost equivalent to the increase in the those payments is set pursuant to orders in council 450/2011 and amount of income tax that that member would have to pay. 526/2011 as well as 466/2007. I have for you a copy of those Justice Major: The province of Alberta would be sending how orders in council. much to the federal government? More or less. The remuneration that any given member may receive is solely dependent upon which committees and how many committees Mrs. Scarlett: If we were to take those assumptions and apply they may be appointed to, but there are seven different subsections them across the board to all members for this fiscal year, it would that detail how much a member may receive dependent upon the be just over a million dollars of extra remuneration that we would appointments to the various different government committees. Of be paying and that would be incurred to our budget, and note in that as well is that there is pay provided for members of subsequently all those members would be submitting approx- Executive Council in lieu of participation on all government imately that same amount in additional income tax. committees, and that amount is $2,967. As well, there is pay provided to the President of Executive Council, that being the Justice Major: Do you see any particular benefit to the province Premier, in the amount of $3,483 per month in lieu of all for doing that? I mean, there’s an argument that we see on participation on government committees. Ministers and the transparency, and I think that what’s important in this is the Premier are not eligible for any remuneration on Legislative transparency that the federal government is making the payment, Assembly committees. I failed to mention that. in effect, by forgoing the income tax. To exaggerate, isn’t every Again, in summary, pursuant to the information provided, there citizen in Alberta better off with the tax-free allowance being are many different sources of income in addition to the MLA absorbed by the federal government than being absorbed by the indemnity and tax-free allowance that a member may be eligible province? to receive. Mrs. Scarlett: I don’t believe I’m in a position to make that 1:20 determination. One final point before I leave the MLA remuneration. I have also a final tabling for you. This tabling provides an updated chart, Justice Major: No. I think you can if you just reduce it to the information as of November 1, 2011, of all jurisdictions across simplest terms that I’m talking about. Right now the federal Canada with respect to strictly the member indemnity and expense government says not only to Alberta but to all the provinces: allowance comparison. In that Alberta is still second last with you’re entitled to be exempt from taxation up to a certain amount. respect to MLA indemnity and expense allowance. Again, of those If you’re not exempt from taxation, then the Alberta MLAs would only four jurisdictions still have the tax-free expense allowance. pay it, but in effect the province, the citizens – it would be one The others do not. So I table that for you, sir. more expense to the province. To ensure that all appropriate withholdings and benefit entitlements are calculated and administered appropriately, the Mrs. Scarlett: You’re correct. Legislative Assembly is responsible, through our human resource In addition to the MLA remuneration and tax-free allowance, services branch, for processing all payments to members and you will also see on the chart that members may be eligible for managing their health benefits and entitlements. As such, they additional remuneration, and that has been broken into groups. work in conjunction with the appropriate entities to track all One is referred to as office other than MLA, which includes appointments and ensure that members receive the appropriate pay additional remuneration for Premier, Speaker, ministers, Leader of based on their multiple appointments. All payments are processed the Official Opposition, Deputy Speaker and Chair of Com- by the LAO. Again, anything processed on behalf of the mittees, Deputy Chair of Committees, and leader of a recognized government is charged back and reimbursed by the government to opposition party. the LAO. There’s a third component called special members’ allowances, Now, in addition to member remuneration, members are eligible which provides remuneration for House leaders and whips. for other entitlements, and I’d like to spend some time There’s a fourth component that addresses remuneration for highlighting those. Members are eligible to receive an RRSP members that are appointed to Legislative Assembly committees. allowance once per fiscal year, and per the order once in every These are the all-party committees of the Legislative Assembly. fiscal year there shall be paid to every person who is a member On that chart it details that there is different remuneration for the and has served a minimum of three months in that fiscal year an three categories of committees: category A, category B, and allowance equal to one-half of the RRSP dollar limit for that year L242 | Appendices 243 appendix L t r -3 ing ing free -free MLA Appendices | Appendices | . . a re -establishment -election. May 2012 Repo -establishment allowance in present formula. Again, the present present the Again, formula. present -free allowance at its highest level . the point in time that they return the second second the return they that time in point the . . But they could accumulate a new. a accumulate could they But From the date of their re their of date the From their on service only based be would formula Their . Edmonton : : lan that reduced the members’ pension benefit from from benefit pension members’ the reduced that lan us additional an 1 per cent that set aside was toward : : The allowance provided members, if they those not to to not those they if members, provided allowance The A pension plan as at 1993 was based on a formula of 4 of on a formula based was 1993 at as plan pension A part formula, wherein the first part of the formula for for formula the of part first the wherein formula, -part . Major Major he formula was as follows. They received the amount of of amount the received They follows. as was formula he . t rate of the member’s monthly indemnity tax and indemnity monthly member’s the of rate t Scarlett Scarlett . The last benefit I’d like to speak about is the transition transition the is about speak to like I’d benefit last The lished lished estab was plan pension MLA The plan. pension MLA The ML re the formula, initial the on Based That allowance was renamed to a transition allowance in No person shall be credited for any years of service as a The transition allowance was subsequently changed again in in again changed subsequently was allowance transition The -establishment allowance or transition allowance and then were -elected, they would not get credit for that previous service. per cent of the highest average pensionable allowances for three consecutive years times the number of years of pensionable service in the office. However, there a retroactive was revision made to the p 4 per centper3service to cent on accrued all after March 19, time of the both Legislative the time, that suspension, 1989. At of rate a on based were contributions member the and Assembly pl cent 10 per liability. unfunded plan’s the meeting in approved initially was this allowance Historically, allowance. 1988 called time that was andJuly at t 1998, tax in indemnity month’s one multiplied the by years or part years of service as a member, with 12 of payment a maximum and months six of payment a minimum months. allowance. 70, or it may end sooner if directed by the former member. member. former the by directed if sooner end may it or 70, Members can drop their coverage in whole or in part at time; any however, once they drop the coverage, they cannot recommence it at a later date. rates contribution the and formulas service The 1969. in originally the however, years; the throughout periodically changed have meant that What 1993. June in suspended was plan pension MLA was that all members who were not vested at that time, mean all members who did nothave five years of pensionable service, members all result, a As contributions. their of refund a received a have not did or not do thereafter or 1989 in elected were who plan. pension MLA the to pursuant benefit pension formula the on based amount an with defeated, were they if or run retirement. of time their at 1:30 then formula The amended. was formula the and 1998 of October was a two the on multiplying based was 1989, 20, March to prior service all highes allowance by one month for every year of service to March 20, from service of year every for months two subsequently and 1989, March 20,1989. In calculating the of service, years the most recent years of service shall be counted first, and there a was maximum of 12 years of service payment awarded. if So payment. a received previously had they which for member they had been a member and retired and received a payment as a re re Justice Mrs. from Mrs. the is this and 2001, of August a 1989, 20, March before service For parts. two in is formula Justice time. Correct. e extended term disability disability -term ormer members. ormer MLA Compensation and Benefits Review – Review Benefits and Compensation MLA -election, or are defeated. The 13 fiscal year will be $11,485. This This $11,485. be will year fiscal 13 -Canada travel coverage; dental e coverage. The long benefits plan parallels and is very -of wever, this plan differs from a normal normal a from differs plan this wever, recurring annual at salary the time of their hat the member has the required RRSP room room RRSP required the has member the hat r the first five years. Thereafter they can stay on - 2012 the for Doesthat plan medical differ much from what gency out gency The MLA : : alth benefit plan, and it is named Members’ Choice. Major Scarlett term disability insuranc disability -term On the extended benefits option plan, the EBO plan, premiums premiums plan, EBO the plan, option benefits extended the On Effective April 1, 2012, members will also be entitled to a a to entitled be also will members 2012, 1, April Effective f for option benefits extended an have also We Members who participate are also eligibleto receive an MLA In addition, members are eligible to participate in what we call inwe what to eligible are participate members In addition, ealth spending account. This account will be in the amount of of amount the in be will account This account. spending ealth REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | What this benefit provides is that members have the option of of option the have members that is provides benefit this What they when plans benefits health our in participation continuing re for run to not choose resign, medical, dental, and life insurance coverage, and it’s based on the level of the member’s coverage at the of time their retirement as a member. Justice coverage that we provide includes prescriptions and prescriptions includes provide we that coverage civil servants get? Mrs. the and Assembly Legislative the both by paid be to continue former member fo insurance, LTDI, provides partial income for a member who who a member for income partial provides LTDI, insurance, as and, term their during disabled physically or mentally becomes cent per 70 is benefit disability The seat. their resign must result, a eligible total their of this for requirement service minimum no is There resignation. the as time such until continue would benefit the and benefit, or employment gainful to return to fit deemed is individual reaches the age of 65. Ho the for case this in no option is there that in plan employee to had has member the as a member as work to return to member benefit. this to obtain resign public the with consistent be will criteria our and developed service program, we know that the approval of all eligible claims eligible for guidelines Agency Revenue Canada the follow will medical expenses. total the paying for responsible is member former the but plan, the at terminates plan the in participation The premiums. the of cost the of 75, age or in the case of the life insurance plan it ends at ag h implemented being plan a parallels benefit this and year, per $950 1. of April as employees management service public the for also being still are expenditures eligible for criteria the Although as established pursuant to the Income Tax Act of Canada. So the the So Canada. of Act Tax Income the to pursuant established as RRSP allowance to intended that’s plan benefit a health with provided are Members the of employees management to offered benefits the parallel public service of Alberta. Members’ Choice, like the management the members offering plan benefit combined a is plan, employees’ flexibility to review and change coverage levels every two years. benefit health following the for provided are options Coverage plans:prescription coverage and extended medical coverage, including emer coverage; and life insurance coverage. Premiums for these plans member. the and Assembly Legislative the by both paid are long January 23, 2012 23, January allowance is paid as taxable remuneration; however, a member to the directly this payment transfer LAO the that request may RRSP their applied be against institution to financial member’s t provided account they that and assessment of notice on their identified been has that have they that confirming us with declaration a completed have such. he MLA the similar to the benefits provided to management employees of the the of employees management to provided benefits the to similar public service. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-4 MLA Compensation and Benefits Review – Edmonton January 23, 2012 member would receive payment based on multiplying the highest allowance to an RRSP in their name only. The formula for that rate of their indemnity and tax-free allowance by only one month amount of transfer is $2,000 for every year or part year of service for every year of service up to that date. However, for service on before 1996. This eligible amount of RRSP transfer is over and or after March 20, 1989, the calculation is based on total member above any normal RRSP room a member may have. But, in remuneration, that being the indemnity, tax-free allowance, RRSP addition, any member may on the payout of their transition allowance, office other than special members’ allowances, and allowance direct us to send to their financial institution an amount remuneration for their legislature and government committees. of money that will be applied against an RRSP account in their That formula for all service after March 20, 1989, uses a formula name providing that they have the required room to do so and that of A times B times 3, where A means the average monthly salary they have signed a declaration with us saying so. based on the three calendar years in which the person received their As I mentioned, any deferred money does not accrue interest, highest salary times B – the number of years that the person has and I think it’s important to note that the present accrued transition service from the period of March 20 forward – times 3. allowance liability is fully funded. Again, no person shall receive credit for any service for which This, sir, concludes the overview of the MLA pay and benefits. they have previously received a payment. I thank you very much for the opportunity. Justice Major: There is no limit on the number of years? Justice Major: Can I ask you one question? You filed exhibit 5 in which you outlined the comparators between the various prov- Mrs. Scarlett: There is no limit on that. inces and Alberta on remuneration. The two factors you consid- There is also a transition allowance order that provides a death ered were the indemnity plus what’s been called the tax-free benefit. That order says that when a person who is a member dies, allowance. It showed Alberta members being paid $78,000, which there shall be paid an amount equivalent to the amount of the put them near the bottom of the provinces. You then explained transition allowance that the deceased person would have been that they get additional revenue from serving on committees. entitled to at the date of death. This death benefit payment would be We’re just speaking not of whips and cabinet ministers but the administered in the form of a life insurance policy that has been regular, ordinary MLA. Have you got a number? It wouldn’t be established strictly for this purpose. Members designate a precise because different MLAs would be on different committees beneficiary on our files for that purpose. or different numbers. But on average what would an MLA’s total Now, with respect to the options that members have at their time remuneration in Alberta be, and how would it compare? Would of retirement, under the present guidelines that are set out by the they still be at the bottom of the pack or close to it, or would they Canada Revenue Agency, CRA, a transition allowance is considered be in a higher position? Do you know? to be a retiring allowance. The term “retiring allowance” is an 1:40 amount paid to officers or employees when or after they retire from an office or employment in recognition of long service or for the Mrs. Scarlett: I do not have an exact number for you. I have some averages. Based on my memory of that information, they loss of office or employment. would be higher, probably closer to the top, in and around As a retiring allowance there are some administrative provisions Ontario. The third. that a member can decide to exercise. One of them is a deferral option on the payment. Presently a person who is eligible to receive Justice Major: What would the top be, more or less? a retiring allowance may elect to defer the payment of the amount of that allowance over a period of years. However, the decision Mrs. Scarlett: Averaging somewhere between – again, I’m sorry; respecting the specifics of the deferred amounts to be paid is this is from memory – $120,000 and $125,000 total remuneration. required immediately at their time of retirement or loss of office, and once they make those decisions, they cannot come back and ask Justice Major: So it would be, roughly speaking, about $40,000 us to change those decisions. more than the total of the tax-free allowance and the indemnity. And that’s just arithmetic and based on your memory subject to Justice Major: Is it any more expensive for the government, how any correction that you may have? they elect? Mrs. Scarlett: Correct. Mrs. Scarlett: No. On any deferred amount there is no interest paid. Another option to the member because, again, this is a retiring Justice Major: Thank you very much. allowance is with respect to a slightly reduced tax rate. Retiring Mrs. Scarlett: Thank you. allowances are treated as lump sum payments. Therefore, there is a slightly reduced tax rate. There is a chart that basically indicates that Justice Major: These exhibits are available if anybody in the for all payments over $15,000 tax can be collected or withheld at a audience wants copies. They’re also, as you’ve heard, on the rate of 30 per cent instead of full tax. So the member has the option website. to ask us to withhold at the reduced tax rate when we pay out any of Our next presenter is the Hon. Ray Speaker, who I think is those payments. However, it’s very important that the member familiar with this building. know that depending on all sources of taxable income throughout the year the member may still be required to pay additional tax at Ray Speaker the end of the year when they file their income tax. Former Member of the Alberta Legislative Assembly There is also an RRSP transfer provision as a retiring and Former Alberta Member of Parliament allowance. Again, in this there are two components to the RRSP transfer options. The first is for members who have service before Mr. Speaker: Thank you very much, Your Honour, for this 1996. Again, pursuant to Canada Revenue Agency’s guidelines opportunity. I hope that in the next few moments I can assist you for retiring allowances, members who have years of service before in your major task that you have before you in dealing with the 1996 are eligible to directly transfer a part of their retiring issue of compensation for Members of the Legislative Assembly. L244 | Appendices 245 appendix L t - - r -5 -time MLA Appendices | Appendices | time basis.-time A major increase in and when you were were you when and and to the right of the the of right the to and time participant in the in participant the -time their farm, their business, business, their farm, their – t to maybe what happened happened what maybe to t May 2012 Repo year period. The other thing he he thing other The period. -year -half time to where it was more of a full of a more it was to where -time -a time assignment-time andto balance their and Mrs. Scarlett andhave you discussed – and or their employment or job, whatever it was. it At was. or whatever job, or employment their Edmonton the MLA. It was very clear at that time. That was at that point in time was considered the expense expense the considered was time in point that at total that was it. was that total free portion portion free - and I can still remember this remember still can I and ng that, our salary did increase to $7,200, but the box box the but $7,200, to increase did salary our that, ng – doing in that part that in doing Now, the reason I point out this experience is not to give a give to not is experience this out point I reason the Now, The tax We did have some other privileges, though. During that early early that During though. privileges, other some have did We appointed -time. They full time was that at were minister A full on a Edmonton in living be to nsidered at, I walked out of the Legislative Assembly Assembly Legislative the of out walked I at, th to Subsequent but it about speaking of opportunity the I have because or history and time of period that in happened what of contrast the show to contras in treated was member the how time of period a was It 1978. to 1971 of period that 1971, after a was budget the 1971 In boomed. economy Alberta’s when nearly was it 1985 of end the At province. the in dollars billion a had we period that In dollars. billion $10 government expenditures, a major increase in sort of government to required were members and responsibilities, or involvement part being from transition re. You mo were home your from away were You assignment. business your from away were You more. family your from away that earlier – allowance for of deserving really so you weren’t allowance, expense your get did we 1960s the in late But it. was That that. beyond anything our for pay to compensation as day legislative per $10 extra an hotel bill. In 1:50 legislative process. Once they had received their cardboard box, they else whatever or business their to back head to were they were profession – their time with legislative their teaching – the in ended usually and February in started sessions time that constit rural represented members the of Most spring. early farming. to back get to had they knew they and uencies, backbencher at that time onlywas a part staircase a linewas of MLAs. that Guys hadbeen there before were They over. was session up when line to had they that knew office. So I got in line Clerk’s and the finally arrived into atgoing $4,500 your here’s “Ray, me: to said Clerk the and Clerk, the He now.” home go can You year. the for payment your cheque, also said, “Here are your supplies for the year.” And he gave me goods of source some from gotten had they at th box cardboard this that to came the Clerk’s office. In the about box was 12 pencils, an eraser, six of loose legislative paper one rings, clips, pack -leaf year. the for supplies our was That envelopes. of pack a and paper, Followi 1971. into continued practice to had You pool. secretarial a in hired were ladies four session them, to dictate and desk their at up stand it. was that and up, it picked and back came and left you finished, the in number no telephone was There space. no office was There took hotel operator The that at time. members the for Legislature all of our calls and us gave a list when we came back from the Legislature. You returned your calls from the hotel. The Alberta long for pass telephone a us gave Telephones Government distance calls, and that very, was helpful.very co the session. Then you’ll maybe get some supplies.” So I got my my got I So supplies.” some get maybe you’ll Then session. the seat in the Legislature, and this member from Lethbridge was my seatmate for a three- said to me was: “Now, you’ll know when session is over because because over is session when know you’ll “Now, was: me to said there’ll beof a flurry paper fromthe press gallery. That means we’ve prorogued, and the session is over.” Anyway, that event happened. room it . . and I I and . you the the you ated less or talk abouttalk my marble floors, floors, marble I came to the front front the to came I lection. MLA Compensation and Benefits Review – Review Benefits and Compensation MLA -year member from Lethbridge plus years was long enough in in enough long was years -plus 82. For a number of years I was on I was of years number a For ’82. say: “If you don’t miss a day in the the in day a miss don’t you “If say: inistration as well. as inistration ing the period of time with Premier Lougheed I I Lougheed Premier with time of period the ing Could I just interrupt you for a moment, Mr. Mr. a moment, for you interrupt just I Could page summary, which you’re you’re which summary, -page seven a filed You Right. Fine. Thank you very much. elected I was to Sure. : : : : Major Major I was accompaniedI was a 20 by Speaker Speaker o ahead. As a bitAs of a background, elected I was to this Legislature In making my presentation, I thought to possibly give you some some you give possibly to thought I presentation, my making In to on went he Then My colleagueMy that was with decided me that he should In 1998 the Hon. Jean Chrétien asked me to sit on the Blais Blais the on sit to me asked Chrétien Jean Hon. the 1998 In G I remember my first time coming to this Legislature Building in in Building Legislature to this coming time first my remember I During my Alberta legislative experience I worked witha REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | experience in this building and my period of time here; secondly, secondly, here; time of period my and building this in experience what know, You a member. as define I what you for define and try in some you assist may That do? they do What role? their is compens or more compensated be should they whether where the balance shouldbe. Thirdly,I’ll some make comments appropriate some be might what to as compensation to relative changes in thatparticular area. Justice assistance by doing three things: first of all, of all, maybe first things: doing by three assistance January 23, 2012 23, January door and saw this giant hardwood door. Then after we opened the the opened we after Then door. hardwood giant this saw and door – marble this of all saw I in, walked and door marble fountain, marble staircase, and marble floors above – marble up the came we then So building.” this of privileges and Room Carillon this of out us below down just that’s staircase walked door, a to came we 10 steps, taking After left. the to turned the in corner there is “Over me: to said he and door, the through hang you where That’s it. under name your Put hook. coat your said, and right the to hand his put he Then hat.” and coat your to introduction first my was That is there the washroom.” “Over privileges. Assembly Legislative of end the at cheque full a get you’ll room, Assembly Legislative familiarize me with the Legislative Assembly. He said to after me show will I me. “Follow door: the through got we mpensation; as a kid kid a as mpensation; co about worried not I’m myself: to thought first my was that So here. be to lucky I’m Enchant from encounter. Speaker? Mr. the at look to established was commission Blais The commission. allowances for Members of Parliament and the Senate. put We out for here have I recommendations the of Some 1998. in report a time. that at report that reflection of a are today you Justice going to say. I just want the audience to know that that’s available available that’s that to know audience the just want I say. to going to as them well. There will be copies at the back. Mr. was my first time here after being elected – from my hotel to the building. As we walked to the building – building the to walked we As building. the to hotel my from the Alberta Legislature in June 1963, and eight elections after that that after elections eight and 1963, June in Legislature Alberta the seat federal a seek to then 1992 and January in run to not decided I essful succ there I inwas Lethbridge. of constituency the in At 1997. until Commons of House the in was I and 1993, October that I time decided that 30 some at resigned and life in else something do should I that and politics e 1997 the in run to not decided I time. that 1964. number of Premiers. I started with Premier Manning, in his his in Manning, Premier with started I Premiers. of number cabinet. inPremier I was Strom’s cabinet andPremier Getty’s dur Then cabinet. was on numerous legislative committees and served as Leader of 1980 to from Opposition the the Special Standing Committee onMembers’ Services, so I saw adm the of side that REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-6 MLA Compensation and Benefits Review – Edmonton January 23, 2012 more. We had a spring session, and then the fall session became agreed to it. As you look back, maybe there were times when I part of the permanent process, and that took more time of the should have said: “No. I can’t because I’m doing something with member. my family.” But as a member normally you just didn’t do that. So There’s a long list of the supplementary benefits that were that was part of it. implemented during that period of time – Cheryl outlined those The other part of the relationship between, say, my constituency earlier to you – because of the transition and sort of the definition of Little Bow and Edmonton was that travel question. Most of the of the member and the requirement of the member to be more of a time when air travel came out of Lethbridge, I was able to get up part-time person in the Legislative Assembly. I don’t know at four o’clock at the farm, drive into Lethbridge, get on the whether you want me to list those or not. airplane, and be here at my office between 8:30 and 9 o’clock in the morning. But you had to get up and get started. Then there was Justice Major: You can. They’re helpful. a problem going back home. The Legislature went until 5:30 on Fridays. It was very difficult to get home on a Friday. Then we Mr. Speaker: I could do it very quickly. Supplementary benefits decided to have morning sessions, which assisted that quite a bit. at that time. Well, members were, first of all, paid a monthly Normally it was late afternoon by the time you got back to your salary. You didn’t have to wait until the end of the session to get farm or back to your home on Fridays. your salary. You were put on a monthly salary. Then, as I say, there was a whole set of obligations that were Secondly, then supplementary benefits were increased in the right there facing you after you did return home. form of increased health, life insurance, dental, gasoline credit cards, mileage allowances, bus and flight allowances, temporary Justice Major: It’s difficult to put a percentage on it, but would residence allowances, parking and taxi allowances, spousal travel, you think that 50 per cent of your time and other MLAs’ time committee allowances and expenses, constituency office budgets. when they were home in their constituencies would be taken up There were legislative office budgets, promotional budgets, with constituency matters? telephones and electronic equipment were supplied, severance allowances, and the change to a defined benefits pension plan. So Mr. Speaker: Oh, 75 or 80 per cent. there was a significant increase in supportive facilities for the members of the Legislature. Justice Major: Seventy-five or 80? Justice Major: Remind me again: what year are you in now? Mr. Speaker: Much higher than 50. Oh, yes. It wasn’t 50-50. No, no. It was much higher. Yeah. Mr. Speaker: Between 1971 and 1985. You know, I say this in fairness. In rural constituencies your Then if we go to the early 1990s, the MLA pension plan became obligations were higher than, say, in urban constituencies. In very much of a public issue. Mrs. Scarlett has described the urban constituencies you could control your time better than you changes that occurred in terms of the pension plan. The pension could in rural constituencies. plan was terminated in 1993 and other plans put in place: the taxable allowance and the transition allowance. Justice Major: Well, there would be very little travel within the Again, now we’re in 2011 and 2012, and what we hear from the urban constituencies. general public is that all of these benefits are just too golden. I Mr. Speaker: Right. Yeah. You could go to an event. I think one think that’s why, you know, in terms of your commission hearings of my colleagues quite close to Edmonton could slip out to a the public is saying that. There is this sort of conflict between turkey supper out of town, have his turkey, walk around, shake what seemingly are the benefits that have been there for the hands, and go home. He’d spend maybe an hour or an hour and a members of the Legislature and what the general public sees as the half doing it whereas for me to go to a turkey supper back in Little right benefits that they should have. That’s going to be the balance Bow, it was like a whole day of time to do that kind of thing and that you’ll have to be able to accommodate in your report. much different. Much different. Is that helpful? The questions, then, that I raise with this bit of background are: what is the current role, what are the challenges, and what is the Justice Major: It is helpful. I suppose the urban MLA would adequate compensation for a member of the Legislature? have more members in population. For instance, a constituency in Calgary or Edmonton would have a greater number of people than Justice Major: Mr. Speaker, before you get to that, it would be of the smaller area. interest, I think, to those of us here. We know what an MLA does more or less in Edmonton when they’re in session, but take us Mr. Speaker: Right. They do have greater numbers, but people in back to your home constituency. What do the people who elect the urban constituencies have the government facilities quite close you expect from you when you’re back home? to them. Because the government facilities are there, the offices are there, they short-circuit a lot of the constituency problems like Mr. Speaker: Well, after spending five or six months of the year welfare problems, let’s say, land problems, health problems. The in a hotel here in Edmonton from Monday to Friday, when I’d constituents are more apt to just on their own go to the local office arrive home on Friday night, there would be people at my door. and deal with their issues whereas out in the rural area with a I’d have a telephone list of 10 to 20 different people that had to be welfare problem or a family problem or a social service problem phoned and had to see me and had to talk to me on the weekend. or an agricultural problem they come to you. They say: can you Plus, in the summertime you had anywhere from eight to 12 help me go through to this office and solve my problem? There’s parades you had to go to, multiple functions on the weekends that much more contact between them. you had to attend when you went back to your constituency. They I think that in terms of a balance, in terms of a workload I know expected you to be there. You had to be there, so you tried to I held what were called presession constituency meetings before I accommodate that to the sacrifice of your family or your business came to the Legislature. Every year I would take two weeks and because often when someone would call and say, “Would you walk the streets of every one of my towns. I would have anywhere come to our meeting?” or “Would you come to our function?” you L246 | Appendices 247 appendix L t - - - r -7 MLA Appendices | Appendices | Member of-Member d or to get on on get to d or -MLAs or ex which is good. Some Some good. is which -Member of Parliament MLA or an ex an or -MLA May 2012 Repo and I say this as a private ce. current time. Our budget has has budget Our time. current lities, and constituency obligations are and constituency lities, e that amount of money and deal with it it with deal and money of amount that e d people to administer and take the the take and administer to d people ce the MLA’s public destiny as to what what to as destiny public MLA’s the ce ion.Most of them feel that once they get ood that this is also prevalent in the private in private the prevalent also is ood this that entry into the workfor the into -entry Edmonton if the job is done well, then we should compensate compensate should we then well, done is job the if – - respon a major have members that is make I point fifth The reallyWe need goo Now, we’ve already mentioned this a little bit. Members outside outside bit. Members little a mentioned this already we’ve Now, deal to how learn must they which bosses, many have Members think I life. private to transition their prepare for must Members What I have foundis that there are very few members that People often think that the legislative experience is a good one these people well and not feel that they should live in poverty or or poverty in live should they that feel not and well people these responsibility of government. I guess that in terms of the manage the of terms in that guess I government. of responsibility ment of our province we have to have good people so that it’s well well it’s that so people good have to have we province our of ment kinds those so compensation adequate have to have we and done, manag can that people of – taxpayers in are job. the well As taxpayer form of transition, to is me, necessary for people at that stage of lives. their in happened has what obvious very is It Albertans. to sibility back 1971from the till Alberta increased nearly a billiondollars on per average year. The budget of billion $40 around be to going is year this in coming that’s 40-year that in money of amount huge a That’s expenditures. time. of period of hours take can Edmonton to Travel travel. must Edmonton of their time. Travel inconvenience keeps the member in a second during home permanent or constituency their from away residence the weekdays some five or six months of the calendar year. responsibi private Family, placed under extra pressures, especially for those members city. capital the from more or hour an constituencies representing society today’s in think I but MLA, the for factor a major is Travel underst be should it ofour sector that many private in common the think it’s I sector. peoplehave to travel in theirassignments. job constituents, the public, the have They with. coexist and with executives party Premier, the ministers, colleagues, legislative the importantly and most staff, legislative and provincially, locally the are people of group This years. four or three every electorate masters that can influen they that bosses and people of mix that in them with happens have. own on their has member a that responsibilities biggest the of one outlined has a Scarlett transition. that Cheryl is themselves for and to available allowances transitional the and programs of number adequate. quite are they think I and now, them transit this for prepare elected, they will be elected for a long period of time, but we all I’ve reasons. various of because true not that’s that know of sort been has there where cases numerous witnessed personally anxiety emotional experience of ex traumatic a Members of Parliament. in When was Parliament, I as a House leader I saw many cases where there were very difficult circum stances, where the family and the ex re for struggled Parliament, they’ll be able to walk out on the streetbe and very marketable and that there will be people ready to very hire them that often said have I cases. in true isn’t many It Not true. quickly. after they’ve lost an election, a member has got the plague. The very through go them seen I’ve that is that said I’ve reason difficult circumstances in orderto be re-employe those Even with on responsibilities. their life and take with difficult a through go maybe they after MLAs, most difficulties period or period, easy an are able to a transition make successfully to continue to take on their life experiences, ex an being that and transition their for econdly, econdly, s must manage eal certainwith talking to, where I I where to, talking e compensation and the the and e compensation te responsibilities. The The responsibilities. te MLA Compensation and Benefits Review – Review Benefits and Compensation MLA timer was filled at least six least at filled was -timer that’s the first thing – thing the that’s first avel through my constituency at constituency my through avel me challenges beyond that because because that beyond challenges me off, as-off, I’ve already mentioned. anding at the front of his store doing doing store his of front the at anding didn’t want to interrupt, but I did. I but interrupt, to want didn’t time now and must multitask. Required is Required multitask. and must now time Did you see any problems that they had? I had? they that problems any see Did you to really on a personal basis be able to create this so would be st be would so The personnel in your constituency would be more more be would constituency your in personnel The Continue. I Continue. - Well, I think his biggest problem would be access to access be would problem biggest his think I Well, That’s a very good comment. Right. comment. good a very That’s No. That’s helpful. No. That’s : : : : : : and n and attendance by all members, including ministers, at Major Major Major Speaker Speaker Speaker The other thing that I found during my period of time as an as time of period my during found I that thing other The This is my own definition, Your Honour, with regard to the the to regard with Honour, Your definition, own is my This MLA an in 1964, back started I since addition, In Twice a year when I did this tr Now, I say this. There are so REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | weeks in advance. I knew who I would be be would I who knew I advance. in weeks theirschedules for their legislative office, constituency office, and other of meetings obligatory attend and functions constituency riding. They in home their and, certainly, capital the at legislators and priva this family with balance must trade the in often suffers family Day my that was or a minister MLA I’m discussion. that in be would subject the what and be, would this really Legislature, the of members current the with that sure hasn’t changed at all. the street level, before I arrived in town, I would take the phone the phone take I would town, in I arrived before level, street the town and in be to would as who mind my refresh and out book town into drive you’d after year Year standing. be they would where - So Mr. and this, and somebody at the garage would be standing there doing this. this. doing there standing be would garage the at somebody and this, rural the in population reduced the With predictable. very It was same that circumstance. still I it’s think areas, would can create new ideas to meet constituents’ and Albertans’ needs; the intercept to and where to when know enough is awake thirdly, is process. that responsibility their in lifeTo their legislative me core aas memberofthe Alberta Legislature. Th there to only they are that that after get privileges may legislative advantage take can they sure make to role, the enhance and support represent. they that the people assisting of opportunities the of preparatio the meetingsofthe Legislative Assembly,the caucus, committeesof an quite That’s convention. party annual the and Legislature, the thing. obvious Mr. MLA good it. A describe would I is how This MLA. an of definition – listen to how knows who one is of the way they associate with their colleagues, and I’ve listed six of a all, member of First significant. are think I that in paper this them the isof - Legislature full his constituents, his communication where they are the representative and can help them is the that think I problems. and their concerns their of some with for challenge biggest the and thing difficult most and issue biggest Justice and I want to say it in all fairness, and they can defend themselves – themselves defend can they and in it all say to fairness, I want and list. same the didn’tI see Mr. representative. constituency urban an Justice turnover the where one, an urban to compared as stable less or be. would Mr. from, oh, 200 and sometimes 500 items on my list when I came I came when list on 500my items sometimes and 200 oh, from, back to the Legislature of people that wanted tome d – colleagues urban of my some for whereas do something or issues 2:00 Justice use if I can headaches, the would What problems. your understand any? of think Can you representative? urban an be for word, that January 23, 2012 23, January REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-8 MLA Compensation and Benefits Review – Edmonton January 23, 2012 difficulty either when they’re elected to the Legislature or after they It’s really something more than a tax-free allowance. Since it’s have been either defeated or decided to quit the Legislature. permitted by the Income Tax Act, I’m curious . . . In all of this, I guess, I’ve got to say that it’s certainly a privilege to be able to serve the general public and to serve our province. Mr. Speaker: My response to that would be that when the tax- Very few people get that special elected opportunity, and when they free allowance was created, circumstances were different. do, it’s certainly an honour to be elected and to be part of a Example: the Hon. “Bud” Olson, who travelled from Medicine government, whether it’s in Alberta or in Ottawa. Hat to Ottawa, had to get on the train and spend two days at that point in time. There were no other expense allowances, no other Justice Major: Let me ask you, Mr. Speaker. The other side of the supporting remuneration as such. That was it. When I started in coin that you mentioned briefly is that when you’re elected, you feel the Legislature, that was it. They said that 50 per cent of my actual the honour, as you described when you first came to the building. income is tax-free: “That’s for your expenses. Now don’t ask for You have received the majority of votes in your constituency, so any more.” you’re feeling pretty well about yourself. Now, you’ve experienced Now the circumstances have changed. Mrs. Scarlett here has members who have been defeated, and that message is that the outlined a long list of other types of support services that the MLA majority of people in the constituency have lost faith in you or in the has: $3,500 per month for ministers, this committee allowance, leader. You’ve seen people transition from defeat to try to expenses for your automobile, expenses for your telephone, rehabilitate themselves in the private sector. Is that more difficult expenses for your legislative office, expenses for your residence than for someone who retires successfully? here. Those things have been looked after. I think that if that’s 2:10 being looked after and we go along with the benefits that are here, then to me this tax-free allowance is no longer valid. The general Mr. Speaker: Very difficult, yeah. I saw this in Ottawa; I was public, everybody else, has to pay taxes on 100 per cent of their House leader in Ottawa. The Progressive Conservative Party of income, and I think it’s time that the MLA did the same thing. Canada – I’d better say that for Joe Clark’s benefit – was the I recommended that for the Members of Parliament and the government in Canada, and I think they had 157 or 160 members, Senators. They accepted it in 2001. We argued with them the very something like that. After the election of 1993 there were only two same way. They accepted that, and now their salary – at that time members left. So the most difficult thing was that here were all of it went from around $80,000 to somewhere up to $131,000. Now these people all of a sudden out of office, and they had not planned it’s at $174,000, I think. In principle I think that that is an obsolete on their transition or their assignment in private life. I had a lineup part of the tax act. I think it should be done away with. I don’t of people into my office – husbands, wives, former members – with think it applies anymore because there are other ways that the tears in their eyes, crying, saying: “I have no job. I can’t get any governments are compensating the members of the Legislatures employment. I can’t get hired.” A very difficult circumstance. I’m and Members of Parliament rather than using the tax-free not sure whether that’s helpful or not, but that is an actual situation allowance to do it. that happens. I would think that in Alberta when Social Credit was defeated in Justice Major: Let me ask you this. What you’ve outlined is the 1971, there were a number of people that had not prepared change in circumstances where MLAs are compensated more themselves for the transition. Some of them had been in government generously for expenses. The federal government is aware of that 20, 25 years, and there was no employment for them out there. change, are they not? There were a number of teachers. There were some farmers. There were medical doctors. You know, there were some very difficult Mr. Speaker: Yes, they are. stories at that point in time, and there was nothing in terms of transition. Some of them were not of pensionable age either, and Justice Major: They could do away with the tax-free allowance by they went through a difficult time. I think we have to be aware of changing the Income Tax Act. that and try to deal with that issue. You know, it’s not that the Mr. Speaker: Yes. Correct. people weren’t trying to do a good job under those circumstances; they were. Then all of a sudden the voters changed their minds Justice Major: Do you have any idea why they haven’t done that? about who should be administering the province. Maybe just a few comments with regard to compensation, then. In Mr. Speaker: I think it’s more through neglect than it is any other terms of the tax-free allowance it’s very clear to me that MLAs reason. They just haven’t focused on the issue. Internally they’ve consider that part of their salary. I think that we should now do changed the circumstances for the Members of Parliament through away with the tax-free allowance and add it to the indemnity with the members’ services committee and through legislation. Other consideration for taxation. Cheryl has said that that would bring the provinces, you know, have started to do the very same thing, change amount up to $97,000. In my paper here I have only allowed for it on their own, because of the circumstances. $88,000. I think it’s one of those things. They’re allowing the provinces to do it if they want to continue to do it. Maybe they’re just not making Justice Major: In any event, Mr. Speaker, the Income Tax Act, as an intervention. I think it’s more neglect than it is a focus on the you know, says to MLAs, “You can have this,” and it is looked at in subject. a certain sense as a contribution by the federal government to the operation of the MLA’s office. While it may have been intended to Justice Major: I don’t want to put words in your mouth, but I compensate them for expenses that came from no other source, we take it that you feel that the honourable thing to do is to look at the know it has become part of their income, at least, say, treated as part circumstances today and say on our own, that is as Albertans, that of their income. Nonetheless, to do away with it would be a cost to we should no longer take advantage of that exemption provided by the government of Alberta, but it would also make income, the the federal government some years ago, that it’s incumbent on source, more transparent. It wouldn’t be called a tax-free allowance. Alberta to take the lead even if it does cost us more money. L248 | Appendices 249 appendix L t r -9 ance -ance , yet at MLA Appendices | Appendices | egislative May 2012 Repo fee allowance,-fee question the is: is it toadequate MLAs if it goes up to $88,000 or $97,000 if you you if $97,000 or $88,000 up to goes it if MLAs Now, what about the MLAs who are not cabinet cabinet not are MLAs who the about what Now, The whole subject is a little roundabout. little a is subject whole The Edmonton g Mannin Premier ’68 or 1967 about in Back Yeah. ended formula as it is, there’s a lot of public reaction reaction public of a lot there’s it as is, formula ended Yes, I would. Their $63,000 of additional allow additional of $63,000 Their I would. Yes, Right. Exactly. : : : : : nk that the transition allowance should be terminated. terminated. be should allowance transition the that nk tely, so they’d have that to work into their tax management management tax their into to work that have they’d so tely, Major Major mmittee or working on a committee, to get extra income, ice for four or eight or 12 years or for a teacher to do the very very the do to or teacher a 12 for or years eight or ice for four Speaker Speaker Speaker a responsibilities. The problem was that you still left people out. that left responsibilities. problem The still a you was The severance allowance and the transition allowance was talked Very quickly, then, just to finish up in terms of benefits, I don’t benefits, of terms up in to finish just then, quickly, Very There’s no definite answer, but I think we’re pretty close to being being to close pretty we’re think I but answer, no definite There’s that. say to way roundabout a was That Now, in terms of the MLAs what happened in that period of time time of period that in happened what MLAs the of terms in Now, In terms of the of terms In thi I about. - open the With doesn’t a member Two, fair. that’s think don’t just I and that, to allowance transitional a of anything into to type that pay have and months two or month one that take they term the of end the there, three, then by it by of they number were the multiply years $30 million a or $32 a million Out of of money. sum a get they and L the in either here, somewhere kept that’s budget the by out paid is cent per hundred a or wherever, area Assembly just I and no contribution, There’s time. in point that at government formula. good a not that’s that think do away thedo tax away with really have any comments on the benefits. There’s a long list of them. I guess if they’re comparable to the general public service, there. what’s to as acceptable be should they support their needs back home and what they’re doing, and is it is and doing, they’re and what home back needs their support law their quit say, to, have that people good in bring to adequate pract person. to person from vary would that know, You thing? same of MLAs salaries comparing presentation the in noticed I adequate. -free tax allowance the with did away if we that provinces other in top or the up to comparable be somewhat up, we’d that brought and in compensation MLA the leave could we think I would list. the of of salaryterms lit pretty close to do a it still iswhere and right now Premier. the and ministers the for bit Justice Mr. Mr. chair were if you made, were allowances that was ’85 to 1971 from of a co base. pension the of part was That pensionable. became also which that question that deal with of to sort the of ways one was That you’re talking about. That gave them extra income by giving them extr couldn’t everybody of committee; a be a chair couldn’t Everybody that I felt and out, people left So you committee. certain on a be there was a certain unfairness to that. with that tax benefit would increase some $10,000 to $15,000 $15,000 to $10,000 some increase would benefit tax that with immedia be my would that Yes, you. with agree I would program. to you. recommendation Justice Mr. service public the between negotiations salary do the to me asked time that at me gave he guidelines the of one and government, and senior and ministers’ deputy the keep and try should we that was staff’s salaries a bit below what the Premier and So ministe got. rs inthat negotiations, those and still I guideline my thatwas that feel take. to position responsible a was ministers? Would a corrected raise to the cabinet members to and or would resentment, of cause a be MLAs the to not but Premier the in those of responsibilities the that view, in your understand, they compensation? of by way more require positions senior - . . . and I’ll s to what ture are being -free allowance and – Review Benefits and Compensation MLA index is something like 5.35 per per 5.35 like something is index that, yes. that, if Iif changed the tax sionals, and the public service demanding demanding service public the and sionals, . that over time they would get? would they time over that . . What about the ministers? You spoke about the the about spoke You ministers? the about What , to use your expression, in charge of the charge in expression, your use to , person A You make a recommendation for some increase some for recommendation a You make . Yes. position. it is. That’s describedYes. my That’s Yes, I would see I would Right. Yeah. It’s $40,000 or $50,000 a year. a $50,000 or $40,000 It’s Yeah. : : : : : : : : ral public. ral Major Major Major Major Speaker Speaker Speaker Speaker I have this comment in terms of giving guidance to you a to you guidance giving of terms in comment this have I On a rational basis, on that basis I would see the Premier’s salary On a rational basis if I compared the Premier’s salary – that the people where rule a of kind some be should there think I I think the index the think I that used is to increase that salary, if it’s set after What about the ministers? They take on more responsibility than responsibility on more take They ministers? the about What REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Mr. should happen to the salary of members of the Legislature: the ofLegislature: the of members salary the to happen should the reflect must They categories. other the and ministers, Premier, the that think I time in province. this present the at attitude general that is attitude our of members the Legisla compensated adequately. Justice 2:20 Mr. January 23, 2012 23, January looked at the Premier’s salary, her salary would be around around be would salary her salary, Premier’s the at looked tax that’s indemnity current the $26,000 that said I’ve $211,000. Justice I it politically, to argue have you if basis, political on a up, but going to time present the at argument enough a strong there’s think don’t creased in should be significantly, salary Premier’s the that argue would public the think don’t I salary. minister’s deputy a up to say, buy that at the present time, so I can’t thatmake recommendation at all. use numbers my here – Now, $88,000. up to coming $36,000, about up to go would free Mrs. Scarlett has said $97,000,we’re so somewhere in that area. So Deputy Her $211,000. be around would salary Premier’s the staff of chief Her $264,000. getting Council is Executive of Minister more sense a in $264,000, and $196,000 between range a salary has is managing. than she more getting, is she than it, manage it and govern to elected province, the governing are should have salaries that are, you know, at least comparable to the senior the and ministers the deputy are managing, they that people happening not really That’s government. in positions executive thing. one That’s today. very well. Right. I think it is time did it is think I that. we Right. very well. Mr. the example, For one. a reasonable be must recommendations, your current average weekly earnings I public. general the to acceptable not is That much. too That’s cent. Premier the and the and MLAs the if got that think ministers the have would we now, right increase an as that like something teachers, the health profes the at that ready for we’re think don’t I and and more, that least at to have you recommendations your in that think I So time. present acceptable more and sensible is more index an of kind what at look gene the in Premier and the responsibility she carries and that the gap between between gap the that and carries she responsibility the and Premier the Premier and her staff seems strange. Justice Mr. Justice see You wouldn’t her. for work who those than paid less is province different. but are politics inthat industry, they that recommendation, same the make you Would MLAs. the deputy the to eventually, but immediately not closer, come should them? for that ministers work REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-10 MLA Compensation and Benefits Review – Edmonton January 23, 2012 Justice Major: Are you opposed in principle to the transitional talking that under this current formula it could be from 1989 up to allowance or to what has existed in recent years in Alberta of no the present, all of those years. That’s a lot of years. That’s a huge cap? sum of money. Mr. Speaker: Yes. I think that’s what I’m against. Right. It’s too Justice Major: I think we’ve seen some of the public reaction to open-ended, and it’s just too lucrative. that. Justice Major: Earlier in your testimony you spoke in response to Mr. Speaker: Right. I just don’t think that’s right. I mean, you’ve a question about the difficulty involved in going back. So a got to ask the question: where else in the public does that kind of transition allowance capped at, not opened-ended, let’s pick a year thing happen? Does it happen in the private sector? I’m not aware as an example: would you find that acceptable? of oil executives or anyone that has that kind of a payout on that kind of a formula. Would that be correct? Mr. Speaker: Yeah, more acceptable, certainly, than what’s there. Now, what I’ve recommended in my paper is that the transition Justice Major: Well, as near as I know, I think that is correct. It allowance should be either 25 per cent of what the salary or what was the principle of the transition allowance as something to be kind of income an MLA gets during a year’s period or 50 per cent. done. Of course, I agree that there should be limits, but I think, In a number of other provinces they have formulas like that. For too, that at the moment the transition allowance is a necessary example, I think that in Nova Scotia they give a transition bridge to get people back into the private sector. allowance of 12 months. With the federal government, for example, it’s 50 per cent of the income of the Member of Mr. Speaker: Definitely. Yes. I agree with that. We must have Parliament plus the minister and other committee work that they some kind of a transitional allowance to do that. do. So they get 50 per cent. It’s just 50 per cent for everybody, You know, in the public service, let’s say, if you lose your job whether you serve one term, two terms, three terms, or whatever it or something happens, there is an allowance made available to an is. I would rather see some kind of a formula like that in terms of employee so that they can make a transition to some other type of transition. assignment. In the private sector I would think there are also so 2:30 many weeks or months or so that you could consider as transition. So the principle is sound. To just put people out on the street after What I recommended here is that we do away with this open- they’ve tried to serve the province is not right. That’s not right. ended transition allowance and have one with a cap. Maybe it’s a We’ve sort of covered the pension thing, and I think you know compromise – I’m not sure – but what I recommend goes in place the details that I’ve talked about here. I guess a general comment is that we bring back the MLA pension plan, and the member of the Legislature should contribute a fair amount. I’ve said 12 to 15 that I would make is that in your responsibilities you’re going to per cent, but I think more like 15 per cent or maybe even a little make recommendations, and they go back to the Speaker of the more towards that pension plan. Then every member does it. They Legislature. I think the political people have to understand that all do the very same thing. I think the public would accept that whether they feel the recommendations come from a third party or more than the current program. not, the legislators – the Premier, the cabinet, the caucus, and all members of the Legislature – are really the ones responsible in the Justice Major: One problem with the pension as a substitute is end to establish their compensation in terms of salary and benefits that the ability to draw on the pension is dictated in part by your and pension or whatever variables are here. They must take the age so that if you’re defeated or if you left at 40, even though responsibility. you’ve participated in the pension and worked presently for 15 years, it doesn’t help the immediate problem of transition. Justice Major: I think that’s clear from the mandate. Mr. Speaker: No. That is true, but you still are at a young age Mr. Speaker: Right. But I often hear people say: we have to get where you can get back into a career. some third party to tell us what our benefits are, what our compensation is, and then we’re going to be hands off. There is no Justice Major: You can, but borrowing from your testimony, way that the political person can be hands off. In the end the it’s . . . public expects them to take the responsibility. In terms of your report, in terms of what I’m saying, I think the legislator should Mr. Speaker: You’ve got 20 or 25 years of doing something know that and not forget that. different in your life as well. Justice Major: One of the open questions, of course, is: you’ve Justice Major: That is true, but we’re talking about the first six expressed your opinion on the fallacy of tying it to this weekly months or a little longer, where there’s the shock of being wage inflation, but is there some inflationary factor that’s defeated, wandering around the streets aimlessly before you acceptable that would just click in? finally decide that life is real, and you have to go back to work. That’s what I envisage as a transition period or the doctor trying to Mr. Speaker: Yeah. I really didn’t review that as well as I should notify his patients that he’s back. You know, you can go on have. It could be a cost-of-living index. It could be inflation. forever, but there does seem to be that period in which many of them are almost helpless until they come to their senses, if you can Justice Major: Nonetheless, the Legislature would still have to use that expression. A transition allowance with limits might serve accept it or not, and one Legislature can’t bind the other. So what a very useful purpose. this present group may decide can be undecided by next year. Mr. Speaker: Yeah. I think anything longer than, say, 12 months Mr. Speaker: Exactly. is starting to push the envelope. I think that on the outside it would Justice Major: Depending on what happens. be 12 months. The public would generally accept that. But we’re L250 | Appendices 251 appendix L t - - – r ly -11 year I think I . MLA Appendices | Appendices | le Common le ob to be an an be ob to ecommendations time j -time -sector compensation, May 2012 Repo that we pay our pay that we legislators s that you had to look at. I think that that think I at. look to had you that s I didn’t take that mandate to preclude looking at at looking preclude to mandate that take didn’t I If it’s any comfort to you, I will write it as broad it as write will I to you, comfort any it’s If Edmonton : : I trust that you will expand your view beyond what what beyond view your expand will you that trust I That’s excellent. That does some give me comfort. : : Major Major Hennig Hennig The fact that you have been asked to and been required to make was it found I parliaments Commonwealth to regard In r make you that suggesting not we’re Now, They didn’t ask you to look at other ones necessarily although I I although necessarily ones other at look to you ask didn’t They The big question of how much should an MLA make MLA an should how much of question big The I want to touch on two overarching principles that our our that principles overarching on two touch to want I zero although, just to point it out, it’s interesting that you were were you that interesting it’s out, it point to just although, zero to asked were you that but those at look necessarily not to asked countries. Commonwealth at look Justice anything, if that gives you any comfort. any you gives that if anything, Mr. benchmarks, in particular, specifically to comparab judges, Court Provincial and Bench Queen’s parliaments, wealth and senior public servants seems like an attempt to the sway way those to in comparison least At be made. may decisions that an th if compensated lower much be to appear will MLAs positions or bakers or barbers to them compare to you asking were they intentional. was that think I mechanics. Common only the that considering that picked they interesting $100 paid get they essentially so diem, per no is there and session, a year. – that recommending not we’re and ion citizens of Alberta would be be would Alberta of ion citizens mill a within parliaments wealth are Those Zealand. New of country the and B.C. of province the would that parliaments or countries Commonwealth two only the be remotely comparable. courage en that.would In particular, there are 11 U.S. states within on information of bit a I’ve provided Alberta. of citizens a million I’ll legislators. state 8 as compensation to their for is page what make note that, in fact, there is no U.S. state Representa in the tive MLAs. They thanpaid higher gets that Alberta 50 U.S. states low, a to $95,000 over little a of California in high a from range or Mexico New either in it, at look to want you how on depending paid get zero legislators state Mexico In New Hampshire. New of session in they’re when rate diem per a do have they although - two a for $200 paid they’re Hampshire New In day. a $153 they’ve asked you to. I just found it to be disappointing that they they that disappointing be to it found just I to. you asked they’ve thing certain prescribe did to related things all and any at looking in wisdom infinite your mandate enough a good been have would probably compensation job. your do to you for Justice been. have should it suggest you as Mr. very them pay You this. on thought of rules three of sort are there job,-time part a it’s and little, as Mr. Speaker talked about it how Rod Calgary, of Mayor a former even fact, In 1960s. the in was Sykes, suggested that when it was a part alderman in the city of Calgary, he believed that they got a better quality of candidate. have some I quotes in there as well related to all. them through go won’t I but that, is This compensation. at looking were we when set organization public at look we Whenever 9. page on now want we that is principle or rule overarching our first believe we that is one second The transparent. be to compensation be should officials elected for compensation around rules that private in do the it they if short, In sector. private the to equivalent you don’t, they if sector; public the in do it can you sector, either. shouldn’t - - - alls of the the of alls he mandate of your your of mandate he MLA Compensation and Benefits Review – Review Benefits and Compensation MLA ecommendations that we make. very much.very Director and . We’re not a charity; we’re a nonprofit You say: all right. The other side of the coin is is coin the of side other The right. all say: You Judging by the length, we won’t ask you to read read to you ask won’t we length, the by Judging On the contrary. Thank you, Mr. Speaker. Mr. you, Thank contrary. the On Thank you. Thank Right. Exactly. I see this formula that’shere as Yeah, what happens in an election. Very true. Very election. an in happens what Yeah, you Thank Okay. I’ll start by just introducing myself. I’m Scott by myself. just introducing start I’ll : : : : No. I will skip through quite a bit of it so that we we it so that of bit quite a through skip No. will I That is my only filing. my is That : : : : : : The general public say: “Hey. Look. That’s a bit little public “Hey. Look. say: That’s The general Major Major Major Major e Hennig Hennig Hennig Speaker Speaker Speaker nig with the Canadian Taxpayers Federation. We’re a I do want to say a few words, though, about t about though, words, few a say to do want I I know that in Calgary, for example, you know, the mayor and mayor the know, you example, for Calgary, in that know I I’d like to thank you for the opportunity, and I wish you the best best the you wish I and opportunity, the for you thank to like I’d I should repeat again that your remarks are available to anyone Is this the first of filings? of your first this the Is I’ll skip ahead a bithere. I have a summary of recommendations anuary 23, 2012 23, anuary REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | commission. Starting on page 6 and page 7, I go through some of of some through go I 7, page 6 and page on Starting commission. given been you’ve that mandate the that unfortunate it’s think I it. our and frankly, preferred, have I would prescriptive. very is gave openey you a very th that preferred have would organization ended mandate, one as simple as: review and recommendmake compensation. MLA to related issues all and on any ations 2:40 Mr. you are What good. pretty are salaries your know, You much. too doing?” Justice J the council have just accepted 5.35 per cent as an increasebecause to have there. that’sWe set the that formula “Well, was said: they accept it.” that they say: well, that’s all right, but give it to us, too. it to give but right, all that’s well, say: they that Mr. government for difficult most are that events of sequence a having to manage. responsibilities. and endeavours your in Justic that wants them later. We’ve made copies, and people to are free web. the on course, of also, They’re them. take Mr. Justice Mr. Justice it. Mr. Scott Hennig, Alberta National Communications Manager Canadian Taxpayers Federation Mr. don’t have to be here into the evening. the into here be to have don’t Hen were We organization. advocacy citizens’ nonpartisan nonprofit, have we and Saskatchewan, and Alberta in here 1990 in founded about with Halifax, to B.C. from country, the across offices supporters 70,000 organization, where we have voluntary donations that pay my pay that donations voluntary have we where organization, salary and pay for the work that we’re able to do. r 12 are there which in 3, page on history, long our of bit a and introduction the through skip I’ll MLA to regard in province this in here do have we which infamous Kenney’s Jason as far as back going compensation, altercation with former Premier Klein in the h discovery the up to right plan pension MLA the over Legislature here us landed has essentially which hike, pay cent 30 per the of today, albeit almost four years later, reviewing MLA compen sation. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-12 MLA Compensation and Benefits Review – Edmonton January 23, 2012 There are also those that believe you need to pay elected pegged at a full-tax equivalent of about $217,897. It’s little known officials extremely high wages. In fact, if you look at Singapore, that due to the 3 per cent rollback the cabinet ministers and the Singapore pays their Prime Minister the equivalent of about $1.75 Premier took in 2009, the actual second highest and third highest million a year – it’s the highest in the world – and that was after it paid MLAs are the Speaker and the Leader of the Opposition. was recently reduced, just days ago, by 36 per cent. So it was They receive a full-tax equivalent pay of around $200,000. The considerably higher than that. They believe there that it’s a cabinet ministers are at a little over $194,000. Then it gets more required payment to ensure they get the absolute best and brightest difficult. The highest paid backbencher was Len Mitzel, who out there. collected an additional $69,984. He served as the Deputy Chair of We take sort of an opinion, I guess, that would be more in the Committees as well as chairing four other committees and sitting middle in that we don’t believe that you’re going to have a on three others. His full-tax equivalent salary would be about shortage of good people seeking office regardless of what the pay $164,000. is going to be. In 1993 when the pay was considerably less than To answer a question you asked Mrs. Scarlett earlier – on this, you had people with jobs that were paying them considerably average how much additional pay in terms of committee pay do more. You had lawyers like Gary Mar, you had doctors like Lyle MLAs get? – on average it’s $44,506. Oberg who were passing up those opportunities to take a pay cut 2:50 and come work as an MLA. So we’re not convinced that if you pay them a lot less or pay them a lot more, you’re going to get a Justice Major: I’m looking at your chart, page 13. I’m just significant change in your quality of candidate. There will always curious. You speak of the backbench MLA (low). I take that to be be quality candidates willing to step up and serve the public. the lowest for the period at $114,000 or, depending on the tax I think it’s important to note, just looking at the current situation equivalent, $126,000? we’re in in terms of the way MLAs are compensated – it’s Mr. Hennig: Yes. certainly not her fault, but I think it’s an indication looking at Mrs. Scarlett’s half-hour presentation that it’s not very simple how we Justice Major: In trying to follow your evidence, your number pay our MLAs. It’s extremely complicated. I trust that I could was higher. probably pick a few people in the crowd here and ask them how they’re paid, and they could probably answer in 30 seconds Mr. Hennig: My number was higher for . . .? whereas it takes someone who knows this file better than anyone, like Mrs. Scarlett, half an hour to explain the various intricacies of Justice Major: You just finished speaking about the lowest paid how we pay our MLAs. I think that’s a great disservice to the getting, I think, up to $140,000 or something? public and also to those who might be interested in seeking public Mr. Hennig: No, sir. The lowest paid is $126,000, the average is office because gaining access to this information and under- $136,000, and the high is $164,000. standing just how much and how MLAs are compensated is an almost impossible task, frankly, unless you are a person who Justice Major: This chart is . . . spends hours and hours studying this or are employed by the Legislative Assembly to administer it. Mr. Hennig: This chart is correct, yes, sir. If I misspoke, I On page 11 I show a snapshot from the Assembly website that apologize. This chart is correct. shows what the MLA indemnity and allowance are currently as The issue is that the pay increase that came in 2008 was only well as the statutory allowances for other offices, including the limited to committees. Prior to 2008 cabinet ministers and the Premier, Speaker, leaders of opposition. If you were to ask an Premier got paid zero dollars for sitting on any committees, and average Albertan to quickly tell you how much an MLA makes, the committee pay for backbench MLAs varied. Opposition MLAs this is probably where they would look, and they would probably got virtually nothing. It was a couple thousand dollars. Backbench guess that their average MLA makes around $78,000. It’s government MLAs got very little in terms of legislative committee interesting, the results of the comparison that was provided, you pay but got more through government committee pay, averaging showing just the indemnity and tax-free allowance. I can tell you around – I’d have to look at the number again – $28,000. I think that I’ve tasked my staff in Ottawa to try and put together a the total overall pre-2008 in additional committee pay was around comparison between all the various provinces’ MLA actual $22,000; now it’s $44,000. So there has been a significant increase compensation, not just their MLA indemnity and tax-free there in 2008. The problem with the committees is that it’s far allowance, and they’ve been unable to do it so far because it is a from transparent. nearly impossible task to figure out exactly how much MLAs are Actually, I’m going to skip ahead here to look at, in fact, an being paid in various provinces, with Alberta probably being the example on page 16 of how to look at and figure out how much an worst. MLA is making. We took, just as an example, Calgary-Bow MLA The truth about how much MLAs are actually being paid – and Alana DeLong. If you want to know how much she is making Mrs. Scarlett’s numbers were correct based on our calculations. If currently, you would start by looking at the Legislative Assembly you just take the MLA indemnity and the tax-free portion and website. You would see she has her $52,000 and $26,000 gross that up to a fully taxable salary, we came out with a number indemnity and tax-free allowance. Then if you read her bio on the within dollars of theirs: $90,707. However, not even 1 of the 83 website, you’d be able to see that she serves as the parliamentary MLAs earned that amount, the base amount, in 2010-11. The assistant for Seniors, chairs the Seniors Advisory Council. She is a lowest additional pay that was received was by four MLAs – Guy member on the following committees: the Cabinet Policy Com- Boutilier, Paul Hinman, Rachel Notley, and Kevin Taft – and that mittee on Public Health and Safety; Standing Committee on was an additional $36,000 over and above their MLA indemnity Public Health and Safety; Standing Committee on the Alberta and tax-free allowance. So that would put the bare minimum pay Heritage Savings Trust Fund; Standing Committee on Privileges for MLAs at a full-tax equivalent of around $126,707. and Elections, Standing Orders and Printing, which is a committee However, that means 79 MLAs earned more, some very I will reference again later. She is also assigned to the Pacific significantly more, obviously the Premier more. We have that NorthWest Economic Region Committee. L252 | Appendices 253 appendix L t r -13 s part age the MLA Appendices | Appendices | . hose people that are on are that people hose . ted people to look good good look to people ted -free expense allowance, . . May 2012 Repo . . in one pay for backbench MLAs is a is a good MLAs backbench pay for one in don’t think it should be hard to know. I don’t don’t I know. to hard be should it think don’t - as the Calgary board of education, that got rid got that education, of board Calgary the as free portion. Sorry. I should say that the the that say I should Sorry. portion. -free ccountability, is worth the $1 million we’ll send we’ll $1the million is worth ccountability, l, I think that if you’re thinking about running for for running about thinking if you’re that think I l, rolled I understand that argument. I also understand the the understand also I argument. that understand I If Sykes were right, then the lower amounts that that amounts lower the then right, were If Sykes That is is That little a quoted inconsistent what with you Then we go the Singapore way and really get the the get really and way Singapore the go we Then It’s a free country. You’re obviously entitled to your to your entitled obviously You’re country. a free It’s You’re assuming that. assuming You’re Edmonton : : : : : : Yeah. I mean, there are fair arguments on both sides sides on both arguments are fair there I mean, Yeah. Wel Well, I’m not saying that I agree with Mr. Sykes. I’m Mr. Sykes. with agree I that not saying I’m Well, then he’s wrong, if And I am assuming that. am assuming I : : : : : es as saying: that, in effect, the lower the pay, the better the pay, better the the saying: in that, effect,es lower as the Major Major Major Major Major Major Hennig Hennig Hennig Hennig Hennig serving activity or steps taken by taken orelec steps by -serving activity I go through in detail here the various allowances. I won’t go I won’t allowances. various the here detail in through go I I will point out, though, that there must be a good reason. Even if if Even reason. good a be must there that though, out, point will I I know for a fact that in the city of Calgary, that also got rid of of rid got also that Calgary, of city the in that a fact for know I enough reason to forgo the million dollars. million the forgo to reason enough Justice Rod Syk Rod volunteers. Mr. not saying that I agree with the way that they do it in Singapore. Singapore. in do it they that the way with I that agree saying not Those are just for your reference. There are t believe that that get you’ll sides both those Justice they can find would be more attractive to them perhaps than the than the perhaps them to attractive more be would can find they get. actually they amount higher Mr. price heated up. Mr. a times various been mentioned they’ve but here, them through tax a for need the opposing the argument of the fact there are car allowances and housing allowances. I won’t go them. of all through Justice of what’s the fair compensation level, whether it should be very I but low, very or high Mr. Justice reason. logical a for looking just I’m opinion. and website Assembly Legislative the at look to go and you office that seeing do this, to afford can you if out figure to trying you’re u are yo unless tax free, is that of third a that seeing and $78,000 it’s the various all knowing plus that means out what to figure able cause Imay think pay, committee potential up your look to places they think don’t they because office for run to want not to people on aver are making MLAs reality in it when afford can a having of transparency the that think I $136,000. of equivalent - taxable all fully reason a good be must point, there this at one see to unable you’re have Quebec and us of exception the with provinces other all that tax this rid of got other it. But every have and still Yukon Northwest Territories the overriding as argument transparency the seen has province this rid of perk. for getting additional costs think it should be hard for someone to find out how much they they much how out find to someone for hard be should it think it is nearly now Right office. run for if they paid get would alone, that I think change. to needs that think I and impossible, a and transparency there think I to Ottawa. placesare that can savings we that find for taxpayers. 3:00 Justice Mr. inthis 2006, as well the as purposes transparency cited they ’07, 2006 or in perk this of it. of rid getting for reason Justice self y and and able to MLA and and MLA of course, there are no MLA Compensation and Benefits Review – Review Benefits and Compensation MLA t transparent, I’m going to to going I’m transparent, t free pay,-free whichis what we you would be able to determine determine to be able would you – and you may come to this on your on your this to come may you and So if it’s the million dollars, we’ve the we’ve dollars, it’s million if So , are they entitled to more, without to entitled more, they , are in their constituency talking to talking their constituency in their free portion. I think that’s a small price to price small a that’s portion. think I -free free allowance bring her somewhere around around somewhere her bring allowance -free ating them for meeting with their constituents constituents them their ating with for meeting e ends up on your calculations around $156,000. $156,000. around calculations up on your ends e have not in met years, theyyet get paid extra Can I ask you – you ask I Can : Yeah. I think actually one of the great disservices : Major Hennig empt your question that you’re going to ask. You’ve asked it it asked You’ve ask. to going you’re that question your -empt Moving on to looking at the tax the at looking to on Moving By not compens not By If you happen to notice on the MLA remuneration website that that website remuneration the MLA on notice to happen If you ou would not be able to find out how much these extra duties such such duties extra these much how out find to able be not ou would REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | sometimes not even sitting in the Legislature in committees, and I and I in committees, Legislature the in sitting not even sometimes some are There well. as to mention this going to this. I’m get will that committees think I higher, that By valuing on them. serving for compensation it’s done a great disservice to the role of MLAand has frankly encouraged more committee work and having them be here in than rather Edmonton democracy. for thing bad a that’s think I constituents. but compensating them for sitting in the Legislature – sitting in them Legislature the for but compensating pay, committee with along two, the of one being as see would parts of the compensation that leas are pre up this gross to taxpayers to cost $1 million the of terms in before tax the of rid get and pay to have a fully transparent salary for our MLAs. If we’re here in recommendations got I’ve dollars, million a about worried the eliminating fact, In $1 million. you your find will that save would now right calculate would we allowance transition $30 million. to close taxpayers own. Looking at what Ms DeLong makes with the committees that that committees the with makes DeLong Ms what at Looking own. the while undertakes, she activities other the and serves she tax the and indemnity incom her $70,000, on it? figure a putting Mr. is pay committee this additional creating by done been has that on a on serving placed is value higher a that indicated has it that is transparency for money paying that think I that. to solution a got thing. good a Is there any value to the committee thatwork these MLAs do? her of part as work committee this of do all she Should beyond scope their enlarge if they or MLA, an as responsibilities doing are MLAs other what committee than meeting with your constituents. I think that being being that think I constituents. your with than meeting committee is evening Sunday on a baker A job. 5 to 9 a just not is MLA an a put to asked and street the of side the on stopped get to going not an as stopped get may you but you, on for bread of loaf diligently so Speaker Mr. As budget. the about questions asked be out You in are job time. the all your -time a it is full explained, with meeting places, different to around getting constituency too. job, the of part That’s people. information on how much MLAs are paid for serving on these on these serving paid for are MLAs much on how information to find able Unless miraculously were you additional committees. most challenge I would which 450/2011, Council in Order the for, looking they’re what they know unless to find able be to people y being as parliamentary assistanta or serving on a cabinet policy her. for year a $27,000 to out work pay. They committee Justice look and see that she’s a parliamentary assistant and also chairing chairing also and assistant a parliamentary she’s that see and look cabinet on a or CPC being as as well Council Advisory Seniors the Legislative on the no place Unfortunately, committee. policy an include it does website remuneration MLA Assembly category B committees anymore per $36,000 or month, per $3,000 an additional for line in she’s that be you’d pay, for more for looking still were If you year. her that notice and committees for payments additional are there – or C A category fell within committees January 23, 2012 23, January REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-14 MLA Compensation and Benefits Review – Edmonton January 23, 2012 to their constituents. For city council to say, “We’re waiving that, Justice Major: On that point, who should decide it? so please vote for us,” there is something hypocritical if that’s their motive. “You the taxpayer can make me look like an honest Mr. Hennig: Again, our preference is a citizens’ assembly of their man, but it’s going to cost you a little bit.” bosses, essentially, so much like what was done in Ontario and B.C. with voting reform. In both those cases they picked – now, Mr. Hennig: I think there is a cost transparency. I mean, one of the number I think you can adjust – I think, a hundred citizens. I our recommendations in here is that MLAs post their expenses, don’t think you would need that many for an MLA compensation including receipts, online like they do in the city of Toronto. There review, probably more like 10 or 15 or 20 pulled off the voters list would be a cost to set up that website. It would cost taxpayers at random. Give them the opportunity to get access to any money so that they can see how much their MLAs are spending information that you’ll have access to yourself as the head of this and what they’re spending it on. I think there’s some value in that. committee, and allow them to make recommendations and make those recommendations binding with the exception of allowing for Justice Major: I don’t want to bicker with you, but that would a citizens’ initiative campaign, a petition signing, if people believe require time, to set it up and to have the MLAs do it. Is that the it should be held as a referendum on the next ballot. If they make best use of the MLAs’ time? recommendations that are out of line with the rest of the public, well, then the public has the opportunity to put it on the ballot for Mr. Hennig: Well, of the staff time, that would set it up, do you a vote and restart the process if they vote it down. mean? Now, that’s a costly, laborious exercise, but it’s one that doesn’t Justice Major: The time to set it up and the time the MLA would involve asking MLAs to decide how much money they’re going to have to keep track of expenses. There would have to be receipts take for themselves out of the public purse. I think that’s a good and the usual indicia of expenditures. That requires some effort. thing. They shouldn’t be able to or allowed to make those decisions, and they shouldn’t be put in the position of having to Mr. Hennig: Yes. make those decisions because it’s rarely a winning situation for them. Justice Major: Would his efforts be better used in serving the constituency and the province than in doing something like Justice Major: They have made those since Confederation. accounting for all expenses? Mr. Hennig: And I think they get an earful about it time and time Mr. Hennig: Well, I think there are two things there. One, they’re again. I think part of the problem is that people have become quite already accounting for their expenses. It’s just not made public. jaded on this because they all do it. It’s not just one party, so it’s It’s all accounted for here in the Legislative Assembly. They tough. You can’t throw out just the one party who is voting in already have to fill out their expense forms and submit receipts favour of increasing their own pay. It’s usually all the parties. In and get reimbursed for a lot of their expenses, so that’s already 2001, when the transition allowance was increased here in this being done. It would be staff time and staff cost, who would have province, it was the Liberals and Conservatives voting in favour of to put that up online. it with the NDs voting against it. When it was the committee pay Considering the expense scandals that have gone on in the U.K. being increased by the Members’ Services Committee in 2008, it with MPs, in Newfoundland and Labrador with MLAs, and in was the Conservatives and NDP voting in favour of it with the Nova Scotia with MLAs, which some elected officials have had Liberals voting against it. At some time all parties have voted in charges for and will go to jail for or have gone to jail for and have favour of increasing their own pay, so it’s not as simple as voting resigned over, I think the potential cost savings to taxpayers of not them out or voting in a different party. It’s the one thing we can having the likelihood of being defrauded would offset the staff always get politicians to agree upon, how to increase their own costs. I don’t think there’s any additional time required by the pay, and it’s rare to get them to agree on anything. MLA or their staff. There would be by Legislative Assembly staff. I want to point out this one committee, and I reference it as the, So our recommendations are that we gross up and eliminate the quote, unquote, best committee ever, on page 23, the Standing tax-free expense allowance, creating a fully taxable salary, as well Committee on Privileges and Elections, Standing Orders and as follow the city of Toronto’s lead to create the online database Printing, which used to be under category B, a category of of MLA expenses. committees within the Legislative Assembly that got paid Just to go back to the example of Ms DeLong again, on page 21 significantly less. This committee – now it’s under categories A we look at her pay in 2007-08. As you can see there, she currently and C – has a full one-quarter of the entire Legislative Assembly is receiving the equivalent of or has the potential to receive the serving on it; 21 MLAs serve on this committee. equivalent of $63,000 in additional committee pay. In 2007-08 she received $12,000, just to show you the significant increase that did Justice Major: Excuse me. Are you on page 23? occur in 2008. I think that the 2008 increases that happened both Mr. Hennig: Yeah. Bottom of page 23 in the yellow box. at the Members’ Services Committee as well as in cabinet are less about the size of the pay and more about the manner in which it Justice Major: Ah, yes. Best Committee Ever. was handled. Going behind closed doors and voting a pay raise and sliding it out on the bottom of an order in council is not a very Mr. Hennig: Each of these 21 MLAs are eligible to collect a transparent, accountable way to increase your remuneration. minimum of $12,000 per year with the vice-chair and chair Our preference has been and will continue to be that third-party, collecting $15,000 and $18,000, respectively. The Standing independent, citizens’ assemblies make recommendations on Committee on Privileges and Elections, Standing Orders and MLA pay and that MLAs, who I believe have a conflict of Printing has not met since 2008. It met three times in 2007, five interest, should not be deciding and voting upon their own pay. times in 2008, but zero times since. Since 2008, essentially, the Ultimately, that should be out of their hands because they do have equivalent of $261,000 has been paid to MLAs for serving on this that conflict. committee that has not ever met once. I think this one by itself L254 | Appendices 255 appendix L t r -15 e on a e MLA Appendices | Appendices | case. If you’re ng to them and receiving and receiving them to ng May 2012 Repo . . d a flat fee for constituency again, keeping in line with the the with line in keeping again, w as weighed against the more wrap up? wrap I think you give the voters too much credit for for credit much too voters the give you think I But it doesn’t seem to follow that if ar you if that to follow But it doesn’t seem That’s not what I was saying. You had suggested suggested had You saying. I was what not That’s No. We’ll break for 10 minutes. Come back and and back Come 10 minutes. for break We’ll No. Yes. I’m just wondering if we’re doing a disservice to disservice a doing we’re if wondering just I’m They neglect their constituency work at their own Yes, you do. But the check you hope you have there there have you hope you check the But do. you Yes, Edmonton Can we move on to annual adjustments at the the at adjustments onannual to move we Can : : : I’m not suggesting you can’t do both, but your your but both, do can’t you suggesting not I’m . Wouldn’t that also then be true for constituency constituency for true be then also that Wouldn’t : : : : : And if we’re compensating them and encouraging encouraging and them compensating we’re if And We’ve been supportive as an organization across the I would say that that that the be still should I say would I completely agree that . Do you want me to to me want you Do . : : : : : : : : . tion to what goes on up here. They pay attention to what what to attention pay They on up here. goes to tion what Major Major Major Major Major Major Major Major Hennig Hennig Hennig Hennig Hennig Hennig Hennig Hennig Anyhow, I don’t want to interrupt you. interrupt to don’t want I Anyhow, Mr. country in the idea that politicians – politicians that idea in the country their needs. You’re supposed to be listeni be to supposed You’re needs. their to feedback that using be to supposed also You’re feedback. I province. the of governance the improve and legislation improve job. the of parcel and part all they’re think Justice committee, you’re not doing your constituency work. Why can’t can’t Why work. constituency your doing not you’re committee, do both? you Mr. suggestion that someone who serves on many committees should should committees on many serves who someone that suggestion many on serve doesn’t that someone than more paid get committees Justice a flat sum and not special payments for committee work. My to want doesn’t that MLA malingering the about what was: query much do not and them on go will or committees on any go because he’s being paid anyho that on committees the diligently work that’ll MLA industrious he’s on? seems that It a flat sort sum of invites malingerers. some Mr. work? I mean, if they’re being pai being they’re if I mean, work? are who others and malingerers some have to going you’re work, not. Justice out.voted get the that is malingerers Mr. province the governing not you’re and legislation good passing not in needed that’s work the doing not you’re because properly out. voted be also you’ll committee, Justice atten paying can MLAs repeat successful, think I constituency. the on in goes expression American The work. constituency good to point always time again. local itself and proves think time I are politics that Mr. Mr. Justice risk. to disservice a doing we’re then constituency, their in be not to them them. Justice break. a having not by audience the Mr. Mr. Justice hear from. to others of couple a got we’ve up because wrap [The meeting adjourned from 3:16 p.m. to 3:22 p.m.] 3:22 to p.m. 3:16 from adjourned meeting [The bottom of page 26? page of bottom Justice le s who s who 08 for 08 for the spacing; my ount the value of the value the ount sum pay, and we ban ban we and pay, -sum r being parliamentary MLA Compensation and Benefits Review – Review Benefits and Compensation MLA theones that are of value will -08 level, where MLAs were the various changes in Premier I apologize for apologize I ou would get the same input from from input same the get ou would Do you think, human nature being what it is, that that is, it what being nature human think, Do you This is day our This first but as the it at by work, were, The difficulty is that you may get malingerer get may thatis you difficulty The You have picked out some extreme examples where where examples extreme some out picked have You : : : : Well, I think paying think I Well, them a now right amount flat My opinion is that I think we’d be doing a disservice doing be we’d think I that is opinion My I’m sure there are. I don’t disc don’t I are. there I’m sure Again, have we made a decision as a society to value value to a society as decision a made we have Again, : : : : Major Major Major Major Hennig Hennig Hennig Hennig We roll that into the overall one lump one roll into that overall the We Pages 24 and 25 go through – through go 25 24 and Pages REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | PDF maker messed up on – me and 2008, 1, April between occurred have that pay cabinet and committee to regard in recommendation Our 2009. 15, October 2007 the to back go we that is pay receiving the equivalentof around $22,000extrayear a for committee pay. increaseWe that for the average weekly earnings, frozen and pay that changed not they had been have it would like litt a to out work now would which ’11, ’10, 2009, in pay their - 2007 in paid getting were MLAs that $26,000 over additional committee pay. committee additional MLAs from collecting any more compensation for any position position any for compensation more any collecting from MLAs unless they’re serving meaning positions, statutory the than other as Premier, cabinet minister, Speaker, opposition leader, whip,or House leader, they would notbe allowed to receive extra pay for serving on secretariats or legislative committees or cabinet policy o committees or standing committees along duties regular their of part be would those of All assistants. dinners. turkey attending and constituents their with meeting with Justice 3:10 illustrates the foolishness that’s been created with the committee committee the with created been that’s foolishness the illustrates 2008. since situation pay January 23, 2012 23, January committee. I think, committee. iffrankly, they’re paid a lump sum, we’ll know are ones which and important are committees which quickly very not because the committees that are doing little very andwork are and exist no longer will not meeting committee activities? committee Mr. hasn’t necessarily meant that they’ve been meeting more often. I to meet. them encourage you’ll meetings, for them pay you if think will They on them. sit to continue will people and exist to continue not necessarily be just a means of compensation. They’ll be a means legislation. improving of Justice if you were paid a flat amount, y amount, flat a paid were you if Justice are there not or whether know to curious I’m met. haven’t they committee reports that have been of value, that it’s been worthwhile committee. that to have Mr. Justice Mr. committee The work work? at a higher levelconstituency than time that spend to unable is committee on the serving is who MLA though. is work, Work constituents. his with meeting of value on the opinions have should we process this of end committee work, whichtrack may exactly what you’re sayingorit know. don’t I not. may get the fixed sum that don’t serve on any committees as weighed conscientious the that, MLA against lump the sum, may serve with on several committees. Mr. to be valuing committee work at a higher level than constituency job. the of parcel and part all it’s MLA, an being that I think work. in them assist and constituents your with meet to supposed You’re REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-16 MLA Compensation and Benefits Review – Edmonton January 23, 2012 idea that they shouldn’t be setting their own pay, that they also I did some number crunching, looking at if we reversed the shouldn’t be adjusting each year, and that they should use some 2008 pay hike. We went back, and they did have their average sort of factor that is not calculated by themselves but calculated by weekly earnings increase each year in 2008, ’09, ’10, ’11, then an independent third body that roughly reflects the reality of the through ’12. If you put in the average, grossed up the tax-free economy or what’s happening with their constituents. portion and added in the pre-2008 average compensation for I think there are two numbers you can use. I think you can committees, chart 4 on page 27 comes out to what we recommend either use the average weekly earnings number, or you can use the the pay be set at as fully taxable pay. We’re recommending that inflation rate, or the consumer price index. Both have their pros the Premier be paid $203,392, that we go back to the Speaker and and cons. However, really, until about three or four years ago it Official Opposition leader and cabinet ministers all being paid the really didn’t make a difference which one you used because they same whereas they’re not right now, at $183,077, and that a were so very close. Actually, I don’t want to skip ahead, but I put backbench MLA be paid $134,572. The only other payments that a chart that skips over, between pages 27 and 28, showing what would be allowed would be the statutory payments for serving as a the two numbers have been since 2000. There are some years third-party opposition leader, a whip, or a House leader. So those where they’re a little bit off. You know, one will be up; one will are our very specific numbers in terms of what we think the pay be down. But the last three years we’ve see a pretty significant should be, and they once again should start adjusting the pay on an difference between the average weekly earnings number and the annual basis. inflation rate number. Touching on retirement benefits next, starting on page 29, there We also do know that these annual changes are used as are essentially three types of retirement benefits, two significant ammunition by public-sector unions when negotiating their wage ones, the RRSP contribution and the transition allowance. We increases. I threw a quote in there on page 28 from the former believe, again sticking to our fundamental, overarching principle head of the AUPE, Doug Knight, that was just a couple of days that what’s available in the private sector should be available in after the 30 per cent pay hike for MLAs in 2008. He said: “We are the public sector, that defined benefit pension plans are on the outs still at the bargaining table . . . We are hopeful of getting an in the private sector. In fact, we’ve seen between 1977 and 2009 agreement next week considering the raises they just gave the number of employees in the private sector who have any type themselves.” I mean, their wages and their increases on a year-to- of employer pension plan drop from 35 per cent to 25 per cent, year basis are used as ammunition for public-sector wage and the number of defined benefit pension plans in the private increases. Frankly, that’s the bigger issue. The bigger issue is that sector is plummeting even faster than that. the size of the pay increase for a hundred thousand public-sector The only place that you tend to see defined benefit pension workers impacts the bottom line of the budget much more than the plans are in the public service. They are also the only place that, change to 83 MLAs. frankly, can afford to have them because of their inherent nature We could suggest that you change from using the average of having massive unfunded liabilities. We do not support the idea weekly earnings to using the consumer price index, but as soon as of the creation of an MLA defined benefit pension plan in any we got to a year when the consumer price index was higher than manner although we’re not opposed to the idea of a defined average weekly earnings, you’d hear a hue and cry about: they’re contribution plan or a group RRSP plan or what’s, I guess, now using the wrong number. So our recommendation here is that known as the pooled registered pension plan, that was created by MLAs adjust their salary on a year-to-year basis based on the federal government here recently, the PRPP. whichever is lower between the average weekly earnings and the Right now they are getting the RRSP contribution of $11,225, I consumer price index. think is this year’s, and $11,045 for next year. If that was an actual matching amount, because right now it’s not, going into a group Justice Major: What about the average? RRSP plan or a PRPP plan, you would create a defined contri- bution pension plan, essentially, for MLAs. We think that that’s Mr. Hennig: The average would be good, too. I never thought of not a bad idea, forcing them to put some money aside for retire- that one. That’s a good suggestion. Although if it still is signif- ment, because right now they’re not necessarily forced into it. icantly higher than one of the numbers – I mean, if you have a 1 They can take their $11,000 and buy a Jet Ski if they want; it and you have a 5 one year, going with the 3 is still going to get the doesn’t have to go into their pension. hue and cry over the 1. If we’re going to call it an RRSP contribution, we’re going to Justice Major: But I understood that this would be done every treat it like it’s a pension right now. I mean, people talk about how four years or some period of time. Looking at your chart, one year MLAs don’t have a pension. Well, they kind of do. We do call it the consumer price index is higher than the average weekly and on an RSP contribution. That is a form of pension. It should be a true other occasions it’s lower, so if you took an average over four pension plan, an optional pension plan. If an MLA chooses that years, it might be closer to accurate. they do not want to be part of it, then they also forgo the $11,000 the government, or taxpayers, would contribute to their plan. Our Mr. Hennig: I think you’re right. I think that’s not a bad recommendation on page 29 is that that be created. suggestion. In fact, I note that right now in Calgary they’re 3:30 debating whether they should move from using the average weekly earnings to using the inflation factor. Justice Major: With the former pension plan you could draw on It’s different when you’re looking at cities because cities can it at age 55. Does it change the merits of the pension plan if you actually get a real number for their city whereas we’re using the extend the date to, say, 60 or even 65? whole province here. They’re having to use the entire province Mr. Hennig: If it’s a defined benefit pension plan, in our minds, average weekly earnings for the city of Calgary and the city of no, and that’s partly because of the liability that is inherent. I Edmonton, but they can use the city of Calgary’s inflation rate for know of very, very few defined benefit pension plans in North Calgary and the city of Edmonton’s inflation rate for Edmonton. America that don’t have unfunded liabilities. That’s not necessarily an issue here. L256 | Appendices 257 appendix L t r -17 year but but year MLA Appendices | Appendices | ctor to do do to ctor ting study to look at to look at study ting is a different form of differentis a form they voluntarily leave. voluntarily they -year assignment, you’re -year contract to work for ey’re paid. I mean, that’s May 2012 Repo -year contract, I know that at the ollect for six months while they find find they while six months for ollect year contract with the potential for renewal - In the private sector there are frequently All right. Generally, when you sign a contract in contract a sign when you Generally, right. All Well, I don’t know about nonprofit groups, but I I but groups, nonprofit about know don’t I Well, What I’m trying to say is that if I have a business business a have I if that is say to trying I’m What Well, that’s because of the amounts involved. But But involved. amounts the of because that’s Well, These figures I’ve never challenged, though. If they could control the voter, they could. they voter, the control could they If I think at the extreme high end for CEOs of of CEOs for end high extreme the at think I Edmonton : : : : : : : I mean, you can’t always control your employer employer your control always can’t you mean, I I think it would be an interes an be think it would I Correct. Yeah. I think that’s extreme a very high end. Maybe they should be. should they Maybe : : : : : : Major Major Major Major Major Major Major canvassing the field to see what’s going to be there when this this when there be to going what’s see to field the canvassing Hennig Hennig Hennig Hennig Hennig Hennig You also can the view jobof an as a contract. MLA They’ve ere you’re not making those kinds of plans. of kinds those making not you’re ere Justice time to MLA an in to allowing principle the involved coming agree would you think I what to adjust nothing? be should there that saying you’re employment, Mr. Justice six retire They allowances. transitional granted gratuitously months before a retirementdate. Th they it as docan with capital; they private It’s different. entirely practice common a fairly But it’s money. public not It’s choose. leave people when time of period some or months six is there that c to continue but employment of a variety are There retirement. into go or doing they’re what out called be could name another by that line that along perks point. your have But I allowances. transitional Mr. how common that is. I mean, I guess I work in the nonprofit nonprofit the in work I guess I mean, I is. that common how any or industry the left has who anyone of know don’t I industry. groups, nonprofit of heads know, you similar, are that positions as transition of months six getting is that Justice know that banks publicly have reported what goes into the the into goes what reported have publicly banks that know $14 or million $12 making already chairman a of retirement year. a million Mr. Justice Mr. multinational companies there are, but for the average employee mmon. co that not it’s company a of a four likely more se private the in contract a sign you If point. a such after four a sign you if work, of type such you’re after, contract your renew to not choose they and someone sort transition. of some paid not getting generally Justice been hired theby electorate toserve a potentially five- Mr. the public sector, you are contracting to do work that you’re you’re that do work to contracting are you sector, public the on a four take you If do. to equipped planning for what comes in the fifth year because you’re still a plumber, a carpenter, an architect, or whatever the case be.may H Mr. Justice when you have a contract in theprivate sector. Justice and somebody offers me a a four me offers somebody and paying not He’s me. paying quit to going he’s years four of end anyme transitional allowance. So along about the second I year start a that’s that not MLA, an as do that can’t You out. runs contract significant difference, but itdifference. is a - year year - - on who are are on who new defined defined new believe, 2007 there was MLA Compensation and Benefits Review – Review Benefits and Compensation MLA nciple of a transition a transition of nciple rly decent likelihood that that likelihood decent rly he inflation rate is going to going is rate inflation he about $9.9 million, those 21 21 those million, $9.9 about defined benefit pension plans plans pension benefit defined -elected as MLAs while still receiving h alreadywe have an RSPor for, it’s a -served transition allowance. year What about the pri the about What - Wouldn’t you expect that if that happened, the the happened, that if that expect you Wouldn’t and arewe the ones that do all the estimates on That’s true with the recent recession.Prior to that : : : It’s certainly been enhanced recently, although I No. Again, basewe it on what’s acceptable in the I don’t know what they’re going to do. I know they they know I do. to going they’re what know don’t I : : : retire. They’re not being forced out into the wilderness wilderness the into out forced being not They’re retire. -every Major Major Major -for year maximum as to the amount of time you could take take could you time of amount the to as maximum year hings and make them public – public them make and hings - e Hennig Hennig Hennig I also will note that sometime prior to, I note sometime that will also I Again, we think that MLAs need to lead by example. If they they If example. by lead to need MLAs that think we Again, I’m looking at the transition allowance. I don’t need to go go to need don’t I allowance. transition the at looking I’m In the private sector you would only get paid severance if you if you severance paid get only would you sector private the In I mean, the fact is that it’s virtually impossible to know how to know impossible it’s that is virtually the fact I mean, -establishment allowance to being a maximum two REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | a transition allowance beingfrom defeated four years ago as they time. of period long a over it take to chose a four a could it think I and eliminated, been That’s over. payment your create after the next election interestingsome circumstances electi for running are who MLAs have you where allowance. transition their of payouts lengthy receiving currently re be potentially could They Justice transition allowance in ’98 to now being an unlimited, three unlimited, an being now to ’98 in allowance transition Justic January 23, 2012 23, January months in back were they while suspended least at be would pay transition office? Mr. re Mr. suspend pension plans. pension suspend allowance? Does your association accept the validity of any allowance? transition I can recall lawsuits over the surplus in defined pension plans, plans, pension defined in surplus the over lawsuits recall can I to. belonged it who think is I that thing; just one it’s in new 1977. a So not back it’s now. attention more receiving Justice Mr. it make it will pension think I plan, benefit a defined new create know that prior to 2008 there were virtually no virtually were there 2008 to prior that know benefit pensionplans created in the private sector because of the the to prior was that and close, to moving all were They risk. recession. It’s gotten worse since the recession, and even more are fai a there’s think I fact, In it. to looking across we will see changes coming pensions to public-sector liabilities. unfunded for potential the of because America North at look to authority moral the have to them for difficult very service. public broad on the reform pension of job excellent an did Scarlett Mrs. because history the through one a being from going ofit, history g lon the through going voluntarily if you it get wouldn’t You cause. without fired were their announced already have who MLAs 21 have We quit. to intention They’ve themselves. do with to what knowing not and bewildered on based collect, to going They’re decision. voluntary the made our estimates – t what and live to going are people long the down 70 years be to going is return of rate your what and be head, a to coming that’s think I and plans, risky very They’re road. Saskatchewan the know, You reform. been has there although government reformed ofmany their private sector is acceptable in the public sector. It’s either a whic payment, retirement severance payment. these t quitting. voluntarily are who MLAs REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-18 MLA Compensation and Benefits Review – Edmonton January 23, 2012 Mr. Hennig: I’m not sure I agree that you can’t do that. I don’t to us, that politicians should be paid on some sort of merit basis. think any politician should take for granted their re-election. Sounds great in theory, but it’s not exactly possible in practice. There are basic tools like recall and other things that may help Justice Major: All right. Well, how do you work diligently as an solve some of those issues if you’re not happy with the MLA while planning to be defeated? performance of your MLA, but that’s a little bit beyond your scope. Mr. Hennig: I don’t know if you’re planning to be defeated. I There is already a form of penalty pay in place for MLAs who think you’re . . . have unexcused absences from the Alberta Legislature. If you’ve Justice Major: Well, now, you have to be consistent there. You missed more than 10 days without a valid excuse – and there are say they can plan for their transition. Well, when do they start many excuses that are very valid – you’ll be docked $150 for each planning? day, meaning that, in theory, if last year an MLA decided not to show up to a single sitting of the Alberta Legislature, they would Mr. Hennig: I’m saying that there are lots of cases where you have had $5,550 deducted from their pay. I haven’t looked back might think or you might hope that your employer is going to more than a decade, but I can’t recall seeing this ever being renew your contract at the end of your term but they’re not applied. I could be wrong on that, but in my reading I don’t think renewed, and you have to plan for those. I think that MLAs have this has been applied in any recent history. Regardless, the idea of to be prepared for the potential that they are also not going to have penalties for poor performance or not showing up is already in their contract renewed, that they’re not going to be re-elected. place. There’s one in British Columbia that we think deserves some Justice Major: Well, I get your point. It’s no surprise that I don’t attention and some consideration, and that is that in B.C. the agree with it. Premier and cabinet have 20 per cent of their salary withheld each Let’s keep going. year. They’ll get half of that back if their own department does not 3:40 exceed the spending levels within the estimates. So if they don’t overspend what they promised they would within their Mr. Hennig: All right. We’ve prepared here three pages’ worth of department, they’ll get 10 per cent of their pay back. They get the the estimated transition allowances for MLAs if a theoretical other 10 per cent pay back if the government balances their election were held on April 1. These are estimates. budget. We really like that idea. Justice Major: What page are you on? There was one in Manitoba that was similar although it was even more significant. Cabinet would take a 20 per cent reduction Mr. Hennig: Oh, sorry. It starts at the bottom of page 30 through in their ministerial pay if they didn’t run a balanced budget. If that to 33. Those are for every MLA currently in the Legislature, their happened two years in a row, their pay reduction doubled, to 40 estimated potential transition allowance. per cent. So we’re recommending that the Alberta government Even if you fundamentally believe that there should be some implement a similar law to B.C.’s and look at pay penalties for the form of transition back to the private sector, which you and I will cabinet if the budget isn’t balanced and they aren’t meeting their maybe disagree on, these amounts are, to downplay it, more than own departmental targets. generous, I think. We’re looking at one over a million dollars, many in the $800,000, $700,000, $600,000, $500,000 range. The Justice Major: The only trouble with that is that you can act not smallest of every one would be for Paul Hinman, who was elected in good faith in preparing your budget to guarantee a certainty of two years ago in a by-election, who would receive, we estimate, meeting it. around $76,000. All one-term MLAs would essentially receive Mr. Hennig: Depending on the way you’ve set up your own one full year’s pay in the $140,000, $145,000 range. As Brian estimates, yes. I think if you’re not balancing your budget, it’s a Mason called it, the work for four and get paid for five plan. There bit harder to not act in good faith. is already, basically, a cap of one year for a good 20 MLAs, but the other 60 are getting well beyond one year’s pay for their Justice Major: Well, we’ve given you as much time as we can. transition – and some of these people may still decide not to run – if they are defeated. I think there is more of an argument for Mr. Hennig: I appreciate it. You have a big duty in front of you, someone that is defeated to receive a transition allowance than and I wish you all the best. someone who has voluntarily quit. Two last points, one just on the retirement benefits, again Justice Major: Thank you. Can you make this available to any looking at the extended benefits option where MLAs can stay on public members that would like it? their health plan with taxpayers contributing to their premium costs for potentially five years after they retire or are defeated. Mr. Hennig: This submission is available on our website at Again, looking at our overarching principle that if it’s available in taxpayer.com, and it should be on the front page there now if my the private sector, it should be available in the public sector, there webmaster is doing his job. may be some companies, but I am not aware of any, that allow Great. Thanks very much. their staff whom they fire or who quit to stay on their benefit plan Justice Major: Okay. Thank you. with the former employer paying a portion of the premiums for five years. This seems like a perk that is out of the norm for the Dr. Dinesh Moonshiram average, normal citizen and one that I don’t think is well Private Citizen understood or known by the general public either. We’re recommending that that be eliminated and that MLAs are not able Justice Major: Go ahead. to stay on the extended benefit plan. Lastly – and I’ll make one more recommendation – the idea of Dr. Moonshiram: Thank you. Hon. Mr. Justice John Major, performance pay. This is something that we often have suggested Companion of the Order of Canada and Queen’s Counsel, I wish L258 | Appendices 259 appendix L t ls r he -19 MLA Appendices | Appendices | the British British the y Telegraph May 2012 Repo . In Crisis A Trust of at committees and caucus -linked raise pay this year, yes voters get to fill out a simple out simple to a fill get voters service to the community, he or ind. y buyy them at a price. oweWe this n to a system of allowances for MPs; 69 69 MPs; for allowances of system a n to the British Prime Minister. We need not go not need go We Minister. Prime British the Edmonton t chamber from the Speaker’s lips. Speaker’s the from chamber t . Thanks to articles by the Dail y lifey or one that can be properly called so. He is the The phrase burden of public service comes up as a ready ready a as up comes service public of burden phrase The leitmotiv when anMLA retires from public service or passes so more lot, MLA’s the of reminder painful a is yet and away, in resonate could that name next the be may his thinks he when augus that Actually, the MLA’s lot an one. is uneasy an He pays has He involvements. these all for pay to price heavy a is There absolute in low are allowances and indemnity MLA the fact, In The incident with The The challenge, the cudgel was further taken up theby Daily I’ll in Alberta, today lot considered is MLA’s the as far as Now, I go on to quote the sixth stanza in Thomas Gray’s elegy. I won’t I won’t elegy. Gray’s Thomas in stanza sixth the quote to on go I that. you read in Whether life. public in involvement his for price incalculable his deploy to has MLA the osition opp in or government want who his constituents, with in interacting skills considerable them; to solutions find and problems, their share him, see to prepare for debates in the Legislative Assembly; be present and contributions meaningful make his of part as barbecues attend fundraising; in engage meetings; at is That other issues. innumerable with deal and relations; public 4. page of bottom the no famil antithesis very the friend, and husband, father, absentee perpetual sociologists Maybe us. to preached has Coloroso Barbara all of this into research deeper and further conduct and reflect should involvements his impact the assess to burden MLA’s an of aspect relatives. and children, wife, his with relationships his upon have The divorce rates, the ravages of consistent bouts of stress, the cal many so by confounded life of pace hectic a of culmination make would that deterrents the of few a only but are time his on life. public from away shy classes business and professional the manyhow out find to interesting be would It terms. relative and MLA’s an than more paid are Legislature the of employees people 80 at stands currently figure that U.K. the In indemnity. she should get a special bonus in cash or kind. We could thus thus could We kind. or cash in bonus special a get should she revive that splendid medieval practice of some wonderful gifts for pay of concept modern the of elements the all satisfying while performance. comes that quotation the cover probably to need we but that, into from a 17th century debate where MPsare described as “state- begotten.” be may whatsoever votes any upon whom catamites, literall can is, you That and philanthropist, a businessman, Wheeler, Stuart to quotation 10 page on appears This coffers. Tory the to contributor sometime Trust Crisis A of book, new his of scandal fiddlers, the all in U.K., the expense fiddling the describes on to goes He parties. three all from ministers and MPs including is which IPSA, for YouGov by conducted survey a recent that say demonstrates Authority, Standards Parliamentary Independent the oppositio public strong per cent believe that MPs shouldcontinue to claims make for costs published. be should claims those and incurred Telegraph Parliament was forced to create thisexternal body, the regulate to Authority, Standards Parliamentary Independent MPs. the to payments m don’t you if page this read declaration, and this can be done online. They could fill out out fill could They online. done be can this and declaration, whether the MLA gets an inflation believes voter the if whether asking question extra one and no, or exceptional done has MLA the be a way of paying MPs a sort of pay for performance. Every year year Every performance. for pay of sort a MPs paying of a way be form registration in electoral the of tely sks andsks benefits that MLA Compensation and Benefits Review – Review Benefits and Compensation MLA mpensation is defined as the total total the as defined is mpensation Very well. Yeah. : Dr. Moonshiram, it would be helpful if you use use you if helpful be would it Moonshiram, Dr. : Major that you have. This becomes a public document. You You document. public a becomes This have. you that ding the compensation and benefits for the members of the the of members the for benefits and compensation the ding pensated. Both may sound meaningless, but the third one one third the but meaningless, sound may Both pensated. Moonshiram erience derives from. I don’tneed to cover thebits about what In order to arrive at an understanding of compensation, I believe I compensation, of understanding an at arrive to order In In management literature co I shall start by defining compensation as it is normally normally is it as compensation defining by start shall I erally gen is compensation, the is which topic, second The Now, as far as MPs’ salaries are concerned, have to we hark advocated is which performance, for pay of proponents Some REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | amount of monetary and nonmonetary pay provided to an an to provided pay nonmonetary and monetary of amount as performed work for return in employer an by employee package benefits and compensation any of elements The required. of comparable worth the about research upon market based are and contributions employee’s the marketplace; the in jobs skills similar with employees of availability the accomplishments; in themarketplace; the desire of that employer to attract, motivate, andretain a particular employee is he for the value contribution or relationship. employment the to add to perceived 3:50 Justice as commonly this term meaningfully to define essential it is leading and consultants benefits and compensation by described been has Compensation literature. management of exponents defined as the act or state of compensating, the state of being com defined is compensation Here problem. the circumvent to seems as something given or received as an equivalent for services, debt, in indemnity. as suffering, injury, loss, to extend my heartfelt thanks to you and to the government of government the to and to you thanks heartfelt my extend to presentation this making of opportunity the me giving for Alberta regar Legislature. Alberta the to go then and literature, management in understood bit about little crisis a a cover salaries, MLAs’ of background and, topic, fourth the be lot will MLA’s the parliament, in trust finally, the rationale for an MLA’s compensation package and conclusion. short mere a be will part sixth The recommendations. January 23, 2012 23, January this as a guide because I think if you simply read it, you’ll go over over go you’ll it, read simply you if think I because guide a as this but now, and I’ve that’s over fault, my We’re allotment. time the the of some summarize can you if so on track, back it get to got things realize that it’ll be filed and thenmade public. So rather than read, helpful. be it’d freely, speak just could you if Dr. We literature. management in evaluations job from derived marketplace the in is worth its what out find and job a evaluate its all in job the describes which description, job on the based ta various the required, of qualifications type the elements: duties and responsibilities the holder will be required to perform, perform, to required be will holder the responsibilities and duties unique his and function, would he which in environment the description. job the of requirements the fulfilling to contribution Based on those, they arrive at the type of salary and takes one approach the is This employee. an to payable be should in management as far as compensationbenefits and go. say. one might irrelevant, our of most where Kingdom, United the in England, to back exp 700 days, those in that say to except century 13th the in happened years ago, according toparliamentary archives the going rate paid just 4 was MLA, the of equivalent the was which burghers, the by 10 about aldermen its paid London of city The day. a shillings the in Weymouth, for member the for rate The day. a shillings terribly All a year. 500 mackerels simply was England, of south comple age modern online -tech, high a in but quaint, and old could there age modern this in that believe gurus, management by REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-20 MLA Compensation and Benefits Review – Edmonton January 23, 2012 who work in the Legislature, civil servants who are paid more and the sum increased by 30 per cent. The total amount would be than the Member of Parliament. A parliamentary salary does not subject to tax. support the lifestyle to which most professional and business classes aspire. There is a real danger that so far as the intake from Justice Major: What would your recommendation be for the the professional and business classes are concerned, we will cabinet and the Premier? restrict that intake. This is clearly not in the public interest. In Dr. Moonshiram: The cabinet and Premier could maintain their order to ensure that members could perform their parliamentary current salaries. and constituency duties effectively and have, where necessary, a second home, the salary of members would have to be reviewed Justice Major: Current difference? considerably, and this might yet again be deemed politically unacceptable. Dr. Moonshiram: Yes, except we’d increase their allowances by In a leading textbook called 21st Century Management the 30 per cent, but that would be subject to tax. The alternative to writers highlight two scarce areas. One is knowledge number 2, above, would be to increase the MLAs’ indemnities by management, which means that when workers, employees, the simple figure of 2.9 per cent, which has been withheld so far, managers, directors retire, they go away with the knowledge they and leave the allowances untaxed, but all expenses under the have acquired during their years of service. That knowledge heading Allowances would have to be justified with appropriate disappears when the employee, manager, or director leaves the receipts and annual independent audits. company or dies, so knowledge management is one of the areas Number 4. Another suggestion would be to keep the starting that management is trying to capture and keep and that could be salary of MLAs as it is currently and then to increase their pay by used by new employees. The second one, which is more important $10,000 for every four years they are in office to reward the than the first one, is talent management. As competition increases, accumulated wisdom, experience, dedication, and age. We keep a it is difficult to find the right required talent for certain jobs. Here sort of pace with the rewards they might have received for we are referring to the position of an MLA. promotion and long service in the commercial world, where the The next title will be The Rationale for an MLA’s pay is increased by notches every year. Compensation Package. Current staffing expenditures to help members perform their 4:00 parliamentary duties would be maintained with an increase of 2.9 Justice Major: Given the time – I hate to do this – you’re running per cent of their basic salaries. short. Could you move to your recommendations? In your We’d also advocate a communications expenses budget of a recommendations you have 10, but obviously you have your maximum of $20,000 per annum to each MLA to enable him to preference. communicate in a proactive manner with his constituents about their parliamentary duties, regular reports, newsletters, surveys, Dr. Moonshiram: Right. I’ll start with number 1, which is parity. questionnaires, advertisements on meetings and surgeries, web It has been said that the MLA could have the same salary as, for designs and upgrades. example, the most junior judicial figure, the equivalent of a As far as the resettlement or transition allowance is concerned, district judge, or just over $88,000 all subject to tax, or the it is a fact that some degree of social stigma seems to accompany equivalent civil servant salary. This is the maximum MLAs can the MLA once he leaves office or goes back to resume his hope for under this proposal. What about the argument that nonparliamentary role. A member who ceases to be an MLA potentially talented politicians would be lost to parliament because either through nonselection or of his own accord should continue of the low pay? Some say that ego and ambition will overcome to benefit from an adjustment/resettlement allowance amounting that barrier. to between 50 per cent after two terms in office and 100 per cent The second proposal I’m making is . . . after five terms of the annual indemnity once parliament is dissolved. Justice Major: Which of these is your recommendation? The eighth suggestion. It is suggested that an appropriate pension scheme be introduced for each MLA. In the U.K. Dr. Moonshiram: Well, certainly not the first one. members are free to choose to contribute 5.9, 7.9, or 11.9 per cent Justice Major: Not the first one. I thought that. – these are the accrual rates – of their indemnity to a government pension scheme. In return, the government would fund the pension Dr. Moonshiram: The second one, in return – and this would be scheme with a similar amount. In some Commonwealth countries my one – for a taxable . . . the government funds the pension scheme with twice the amount of the member’s contribution. So if the member contributes 5 per Justice Major: I want you to tell me which ones you recommend. cent, the government puts in 10 per cent. It is also suggested that an in-depth actuarial exercise be Dr. Moonshiram: Yeah. Number 2. It is in two parts. In return conducted to assess the validity and sustainability of such a for a taxable indemnity for MLAs, which represents a 28 per cent scheme before its operation. However, a pension scheme remains increase, and to bring their compensation more in line with other a must for MLAs who either through old age or electoral defeats provinces and for reasons of transparency and openness, it is may not have other means of guaranteed financial support. The suggested that MLA compensation be brought to $100,000 per amount of pension payable would naturally depend on the rate of annum. In this case, the additional allowances would simply be contribution and length of membership in the scheme. eliminated altogether. The total remuneration currently stands at We also advocate a contributory medical scheme for all MLAs $78,138. and their immediate family members. Such a scheme would cover As far as additional and special members’ allowances are dental, optical, ophthalmic care, and equipment as required. concerned for the Premier down to the chief opposition whip, they Again, the rates of contribution and an actuarial exercise should be would be, again, simply eliminated. Here the MLA indemnity carried out before such a scheme comes into operation. would be added to their current additional and special allowances L260 | Appendices 261 appendix L t l - - – r -21 up -party MLA Appendices | Appendices | an activist movement movement activist an rs also came out recently May 2012 Repo what is offered in the private and Mr. Speaker brought it it brought Speaker Mr. and t for services rendered. I think that’s become pretty evident. pretty become that’s think I Edmonton : Yeah. You don’thave to be a rocket scientist to : ll get rid of the MLA pension plan, but they’ll put in in put they’ll but plan, pension MLA the rid of ll get Major rticipated with us, and I’ll give quote the told us, he that and give you I’ll with rticipated Dorosh In terms of some anecdotal history I just want to by means of of means by to want just I history anecdotal some of terms In In coming here one of the surprises that I had was seeing Mr. Mr. seeing was had I that surprises the of one here coming In when that is quickly very learn you that things the of one think I I think that circumstance indicatedwas a then by to me MLA In that regard,based onthe commentsof Mr. Speaker, he is I think Mr. Hennig highlighted that, that the MLAs are kind of of kind are MLAs the that that, highlighted Hennig Mr. think I With that said, one of the elements that I think we’re looking at at looking we’re think I that elements the of one said, that With Looking at the reality of where we are in regard to historical no have I individual. private a am I that state disclosure full attachment to a political party or other any vestedthird interest group. The comments and opinions are mine and mine and mine mine are and opinions comments The group. interest alone. that you to indicate will I disclosure for Just door. the at Hennig many years ago, in ’93, I didparticipate in that at association the through successfully quite did we where pension plan. Alberta the eliminate time – stage of sort that into get you politics and the power of the electorate cannotbe underestimated where there is a perceived imbalance. What you can do with our within change create can is it powerful how and information rea think the I what reality, the being That system. political relevance is in of terms where we go with this the how is their and what governing are those that perceive will individual reward is versus what they have. It’s a naturalhuman reaction. pa who atme the time. He said: Grant, there are so many within our the behind stand to have we but you, with agree that caucus is here have you danger the indicated: He caucus. within position that we’ that perspective, today’s in it at looking think I worse. something transition allowance is worse. Inthe sense that have an we open ended to means be able to allow a transition to the private sector, you, assure can I payout”: “$1 million words mere the just using of Albertans. majority the with well over go not will that sir, Justice Mr. quite correct. These are devastating losses when you lose an election. To be able to get back the psychological parameters that I’ve seen personally know: or I that of politicians inMLAs terms it is devastating. Some of them never do recover. looked at as the benchmark. What they get oftentimes is translated if any measure, by that think I want. servants public our what into takewe a broad in view terms of institutions, credible are There point. a has Hennig Mr. sector, right the Institute, Fraser the or Howe C.D. the be they whether the at city your within For matter, that think tanks. wing University of Calgary some professo at $1 million means a lot to a lot of people. of lot a lot to a means million $1 at th understand and deliberations your that important it’s that is here recommendations for and also come atAlberta a for critica time l the direction expect we our elected leaders totake in regard to I I greatest to the would If quote may, just like remuneration. their best. it said who perhaps Schumpeter, economist, Austrian “Nothing shows so clearly the character of a society andof a I adopts.” sector political its policy fiscal does the as civilization in a function setting critical therefore, have think our that MLAs, what of expectation the of servants public Alberta for example an paymen just a constitutes indicating that the remuneration for the civil service has been spectacular in comparisonto has what beenthe reality for those that are within the private sector. of out not we’re that think I numbers, these in reflected as terms ubject I present is just MLA Compensation and Benefits Review – Review Benefits and Compensation MLA because what someone has ation and indemnity. Oftentimes it’s Oftentimes ation and indemnity. I will keep comments, my as I directed and I’m so thankful the previous speaker speaker previous the thankful so I’m and Indeed. : We’re thankful for that. I read your submission, submission, your read I that. for thankful We’re Thank you. This will of course be on the website? the on be course of will This you. Thank Is Mr. Dorosh next? Dorosh Mr. Is Yes. Please do. is that the impact on family is something I don’t don’t I something is on family impact the that is : : : : Oh, no, no, no. I provide them as an example in in example an as them provide I no. no, no, Oh, Thank you, Your Honour. As I indicated to Giovana Giovana to indicated I As Honour. Your you, Thank Am I Am tofree proceed? – : : : Major Major Major Major Dorosh Dorosh Dorosh Moonshiram As anecdotal history what I’d like to do before do to like I’d what history anecdotal As MLAs should stop pretending that they are a special case and In conclusion, we hope that the Legislature’s response to the the to response Legislature’s the that hope we conclusion, In Finally, recommendwe a register of interests for all MLAs. What I’d like to do if I can, Your Honour, is jump to some some to jump is Honour, Your can, I if do to like I’d What REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | and MLAs known Having understand. really can us of any think personal the pressure, the of terms in takes family the what MPs, take to dollars a million me pay could if you know don’t I attacks: have we that analysis the of one part That’s frankly. quite job, that remuner of terms in at look to as well. family this is MLA; just the not 4:10 mentioned it to regular, independent audits. independent regular, to should accept that they have to keep their receipts and the claim own their in expenses claim who taxpayers most like back money and enforced, jobs. robustly Breaches be of should the rules to and constituents their to value deliver to seen be should MLAs the province at large. Justice give some credit toMr.Speaker in of his terms service to Alberta. – thing one the think I recommendations will have a significant impact on the calibre of of calibre on the impact significant a have will recommendations in That it. in remain and enter to future in decide who people the It itself. Legislature of Alberta the quality the determine turn will of degree high the promote and maintain MLAs that expected is for claims making when them of required probity and integrity s be and system open and transparent a in incurred expenses Dr. other than than other members by accrued earnings all require would This through their parliamentary salaries todeclared. be Justice January 23, 2012 23, January Mr. Justice Grant Dorosh Private Citizen Private Mr. Justice before I attended here, it’s at this point in terms of presentations presentations of terms in point this at it’s here, attended I before where sometimes you redundant feel permission your with So say. to wanted you what is said already my resume to back be I’d that wife my promised I because and as proceed will I grandchildren, my babysitting of duties normal here. possible as quickly and I hope you don’t take us through the numbers. the through us take don’t you hope I and Mr. points very, very quickly. very very, points terms of the wonderful documents online, that are available to any any to available are that online, documents wonderful the of terms citizen, they think I that are produced government. our by recognize the circumstances andthe reality that average taxpayers are dealing with in ofterms their own circumstances and situations. to it keep to had I wanted Initially frame. time the within to you, that style presentation the knowing not minutes, five or 10 minutes here. me before be to going was REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-22 MLA Compensation and Benefits Review – Edmonton January 23, 2012 the woods yet in the sense that if we have a prolonged economic of our democracy. Do we want the legacy for our politicians to be contraction that leads to difficulties in terms of the stock market, what did they get out of the system or what did they contribute? I those investments, even for us that have CPP or OAS think the element in terms of double-dipping just at the gut level expectations, may not be there for us. will rub so many people the wrong way. The reality is that many years ago in Alberta we took the courageous stance that as a province we were going to do the right Justice Major: What double-dipping are you referring to? thing and show leadership, and we cut our deficit. I think that as a 4:20 correlation we discuss these realities and circumstances that we Mr. Dorosh: I’m referring to the ability to take multiple pensions find in terms of where we go next. I think the reality, really, is that at the same time, whether it be a legislative or public service or an what is decided here – and you’re quite correct. Who knows what MLA that is fully vested in the old MLA pension plan that was the next government may be? The reality is that it will send eliminated in 1993. He gets that plus he worked as a teacher or messages to others and to those that basically have much, much worked for the county or worked in a provincial government, so larger participation and stronger voices than what we as he gets that pension plus he’ll get his MLA remuneration. individuals do with regard to our pensions. I think there is this, if I can, man-on-the-street attitude: that’s Now, I think the information in terms of the attachments that greedy. I think that that balance is one that the MLAs themselves I’ve provided for you are really, sir, quite self-explanatory. can address and recognize as to what they want their legacy to be. Justice Major: I have been through them. I’ve looked at the In other words, they, more than any of us, can decide: do I want to charts. be known as the guy that robbed the piggy bank, or do I want to be known as the man that went to represent my constituency and Mr. Dorosh: I would like to provide for you – and lawyers are did the best that I could? great for this; they always like to show precedent – the report of One of the other things that I would very, very quickly, just in the MLA Pensions Review Panel as submitted to the New summary, also give an off-the-cuff on, if you don’t object, is in Brunswick Legislature by Justice Angers, specifically his finding terms of how I perceive the model now, and then I’m going to on transition and training allowances. I think they represent a good conclude. In Alberta we appear to have adopted the model for our start on how we can implement within the Canadian context. MLAs’ compensation as having your cake and eating it, too. In other words, they expect a big full-time wage and then a big payout Justice Major: You’re talking about what you’ve attached? once they leave office. This can no longer be the reality if we are to Mr. Dorosh: Yes. I think that provides a good starting point. have social peace and fiscal responsibility. It must start with our If I may also just make a comparison – and Mr. Hennig in many MLAs, whose own greed is quickly transferred to the public ways beat me to the punch. I had the good fortune to live in the servants, who equally are well rewarded, often on the backs of what United States. I was in California, Oregon, Washington, and we pay our MLAs. Arizona, and I had the opportunity to experience the full-time What I’m really hoping will come out of this is that Alberta again California state Representative and the other part-time will show national leadership and adjust the compensation to reflect Representatives. The interesting corollary there is that so many of comparatively what average Albertans receive as a wage and the U.S. state legislators don’t become career politicians. pension upon retirement. From my interaction with people through Now, at the federal level that is a different scenario. Their form the many activist things that I do, I’ll tell you that the vast majority of government in many ways has a different attitude towards who of Albertans don’t disagree that we should compensate our MLAs. I keeps a cap on the asylum, so to speak. What I found in terms of think that the reality it gets to – and I’m just going to tell you a the part-time Representatives was that they were full value for truism that I note here. I’ve noted over the years that I’ve yet to their money, and because they retained their roots in their meet a poor MLA or a poor MP who has left public office. I don’t community, they retained, I feel, a closer representation of what say that just in regard to compensation and a pension or allowance. people actually represented rather than in some ways being I think Mr. Speaker raised a good point. I think it’s time, outside that sphere, if that makes any sense whatsoever. In terms perhaps, for MLAs to also reflect on the merits or great reward of transition for many of them, it’s quite an easy one because that public service brings and the nonfinancial compensation they they’re already established. receive in advocating for their constituents. As I read I think they So I think that’s one of the corollaries that we do have within call it the citizen’s guide to the Legislative Assembly, so much of our system that we have to take a look at. Do we want to what we expect from our private members, those that aren’t in the encourage lifetime career politicians? I think political experience, executive or cabinet, they can actually ask as our advocate. I think as indicated by what Mr. Speaker provided today, is invaluable. that that reality at the end of the day can be most rewarding for But at the same point does it become a bit much? Should the those that don’t get the high-profile jobs. Did I do my job? Did I remuneration reflect reality, that really what we want to do is represent my constituents? I can tell you that I think that in that move to something like term limits and, therefore, have a higher part alone maybe some of our MLAs are not recognizing that. turnover, so to speak, of our representatives. I mean, there are Really, why do we elect them in the first place but to represent us? many things that we can attribute to remuneration and what we I wish, Your Honour, to state in conclusion that I do respect expect the system to return in terms of not only how the your good public service to the people of Canada in protecting our representative will interact with us but how long he will also stay personal liberties and freedoms and plead your review will also in office. protect the financial freedoms of all Alberta taxpayers by bringing If I can just get directly to the specific areas of your mandate a just reward for MLA compensation that reflects the ability of the because I followed that very, very closely, we’re really in a average Albertan to pay a fair and just level of taxation. I think situation, in my opinion, of looking at the areas that really upset that that at the end of the day is what’s going to allow us all to people, the transitional allowance and double-dipping. Double- have social peace and to return to a civility that we really need to dipping has always been a problem. I think that for those that are have in terms of how we view our MLAs. in a situation where they do want to double-dip, it gets to the heart L262 | Appendices 263 appendix L t r -23 MLA Appendices | Appendices | but I think they they think I but actly correct? articipate in that. articipate May 2012 Repo ther or not I have my facts correct, I correct, facts my have I not or ther Well, we’re finished for the afternoon. We’re on We’re afternoon. the for finished we’re Well, It was voluntary, and Mr. Speaker was one of the the one of was Speaker Mr. and voluntary, It was Thank you. It’s helpful that citizens come forward Are you sure that that’s ex that’s that sure you Are Edmonton : : : : Right. But whe My understanding is that at the federal level they are they level the federal at is that understanding My My pleasure. Thank you, sir. you, Thank pleasure. My : : : Major Major Major Major Dorosh Dorosh Dorosh I do thank you again for your time, sir, and wish you well. you wish and sir, time, your for again you do thank I and I think Mr. Speaker could address it more – it more address could Speaker Mr. think I and tell you: I don’t want it. But they’re forced to take it because of of because it take to forced they’re But it. want don’t I you: tell legislation. forced to. We sent a whole bunch of Reform candidates down there there down candidates Reform of bunch a whole sent We to. forced – Justice Mr. schedule now, so we’ll adjourn until 6 o’clock. until adjourn we’ll so now, schedule think that option should be made available to the individual MLAs. individual the to available made be should option that think Justice us. help and Mr. Justice p.m.] 4:27 at adjourned meeting [The were ultimately legislation by forced were to p Justice to down went Reform that recall will You it. take not did who few a only were There in. buy could they then and pensions, eliminate in. buy not did one, who being Speaker Mr. few, Mr. u es, I MLA Compensation and Benefits Review – Review Benefits and Compensation MLA Premier Klein who this was week Quite a bit. a Quite : You know, there is an aspect and element in terms terms in element and aspect an is there know, You : of an individual, to me, is: what do I do when I have that that have I do do I when what is: me, to individual, an of Major - then to petition our ed Dorosh I just want to tell you something in closing that I was kind of was I that in closing something you to tell just want I I conclude with I can only hope that the MP who 20 years ago ago 20 years who MP the that hope only can I with conclude I REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | have we privilege much how know don’t I because about hesitant here in the sense of whether we’re protected. January 23, 2012 23, January Justice Mr. could have an impact on in terms of making a recommendation. In In recommendation. a making of terms on in impact an have could one I that American only the is Montana, that of state the of terms That out. opt to them allow does that now right in bring would could be a very, powerfulvery clause for those that say: y them give words, other In this. doing be shouldn’t we that agree the option as well because there are many MLAs, MPs that will not I’m know, you say: up and stand now will us beside stood that yo one the area probably is option think it. that I taking of my association with the Association of Alberta Taxpayers that I that Taxpayers Alberta of Association the association with of my just want to reflect on that some me gave concern this weekend. It was the very executive director who at that assisted time us and present a for line in be to Federation Taxpayers Canadian the by reported that is say to trying I’m what guess I pension. million $4.53 measure real the but outside, on the advocate can you sometimes and mien position? REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-24 MLA Compensation and Benefits Review – Edmonton January 23, 2012 L264 | Appendices 265 appendix L t r Appendices | Appendices | May 2012 Repo of the Legislative Assembly of Alberta of Assembly Legislative the of Published under the Authority of the Speaker the of Authority the under Published REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Legislative Assembly of Alberta MLA Compensation and Benefits Review Transcript of Public Meeting Honourable John C. (Jack) Major, CC, QC Edmonton Monday, January 23, 2012 6:01 p.m. Transcript 27-4-2 L266 | Appendices 267 appendix L t r Appendices | Appendices | Centre - May 2012 Repo Liberal Caucus Liberal Alberta Private Citizen Private Citizen Private Citizen MLA, Edmonton MLA, resenters P Charan Khehra Rory Nugent Laurie Blakeman Laurie Adil PirbhaiAdil REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report January 23, 2012 MLA Compensation and Benefits Review – Edmonton MLA-25 6:01 p.m. Monday, January 23, 2012 hour and whose lives are far more in danger than the Premier’s or Title: Monday, January 23, 2012 ed2 any MLA’s, even the Prime Minister’s, are the people who work at [Justice Major in the chair] McDonald’s, those people who work at Mac’s, those people who serve us whenever we go out to eat. Those are the ones who work Justice Major: Well, as you know, my name is Justice Jack hard, who play by the rules, and they don’t get anything. Those are Major, and I’m conducting an independent review of the the people, those regular folks, like the former Premier said, the compensation and benefits for MLAs. Marthas and Henrys, that are the ones who should decide how much As far as my own background is concerned, I was a lawyer in the Premier and the MLAs are worth. Calgary for 36 years and then went to the Alberta Court of Appeal I didn’t personally believe it when I heard Ken Kowalski say the and on to the Supreme Court of Canada. I left there in December other day that: “I deserve my severance package. I’ve been in office of 2005. Since then I have been on the Securities Commission in for almost 30 years, and I’ve never had time to spend with my Calgary and was the commissioner for the inquiry into the family.” That’s absurd. That’s absurd. bombing of Air India flight 182. I urge this committee to listen to the average citizens through you, The purpose of this, as you know, is to make recommendations Mr. Chairman. I ask you to tell Premier Alison Redford, who to the Assembly with respect to compensation and benefits for appointed you if I’m not mistaken, to look into the MLAs’ pay hikes members. Whatever recommendations we make go to the Assem- and their pensions. bly for debate, and they will accept them or reject them. We’re also seeking to get as much public input so that that can Justice Major: It was actually the Speaker that appointed me. form part of the report and to pass it on to the politicians. 6:10 We’ve allotted the time, trying to keep on schedule, and we have you for 15 minutes and perhaps five more if you need them. Mr. Pirbhai: Mr. Ken Kowalski. You’re not compelled; you’re free to say what you have to say, It should be the average citizens who should decide, not Mr. but you can’t say it for more than 20 minutes. Kowalski, with all due respect to you, sir. And it wouldn’t be you. I I guess we’re ready to start if you’re ready. believe it should be decided by the people of this province in a referendum, as we heard that the Premier has also decided that she Adil Pirbhai will hold the election for Senators. This should be put to the citizens Private Citizen of this province. I know this could be out of boundaries here, but the average Mr. Pirbhai: Thank you very much. My name is Adil Pirbhai. citizen – I worked part-time; I don’t mind saying it. I worked part- I’m a resident of Edmonton, and yes, I have run for public office time in the Baccarat Casino downtown because a friend of mine in the past. from my day job told me that she works in a poker room because We run for public office to help our city, our province, and this she wanted to do something part-time. She asked me to come and great nation. We should believe in improving the lives of our apply to the Baccarat Casino, and I did. I went through all kinds of citizens. We should ask serious questions. Why is it that the security clearances, and I got hired. Let me tell you, Justice Major, citizens of this province and my city stay home during the that in 2006 I started working part-time at the Baccarat Casino for elections? In the last provincial election 60 per cent of Albertans $8.40 per hour. On top of the $8.40 an hour I received what’s called actually stayed home. In the last civic election in this city 65 per a tip. It amounted to $3 an hour. Sometimes when they were short- cent of Edmontonians didn’t bother coming out. Many citizens staffed, they used to phone me at my other office, my day job. believe that whoever runs for public office is a crook. Whether The increase that I got when the minimum wage went up in this this is fact or fiction, I believe some citizens are correct in saying province I think was about 10 to 15 cents per hour. The increase that it. they gave to me and to everyone working at the Baccarat Casino – The words that former President John F. Kennedy said in 1963 it’s a very stressful job. You are under constant security. Constant should apply here as well: ask not what this country can do for security. It’s most stressful work. I know MLAs work hard, but you; ask what you can do for this country. We constantly hear under constant stress the pay hike that we got was 15 cents an hour. from all levels of government, the Prime Minister and the Then I hear the arguments from Mr. Kowalski, with all due Premiers: we work 24 hours a day, and we deserve higher pay and respect to him and to MLAs, that they keep on saying that they work higher benefits. That’s far from the truth. hard seven days a week – I have run for public office; I’m a junkie In 1993 former Premier Ralph Klein got rid of government when it comes to politics – and that’s further from the truth. It’s pensions when he was in office, and since then every Premier has further from the truth. I’m not going to mention anybody’s name, increased their pay and benefits. MLAs who sit on committees get but I am going to say this. When I hear MLAs say, “We work hard paid per hour. Just two and a half years ago the Members’ for what we are doing,” I saw this MLA when I ran for city council, Services Committee agreed to 30 per cent pay hikes and perks. this person who was an elected MLA, helping her husband out to Just as an example, the outgoing Speaker from Barrhead, Mr. Ken run for public office. There are several examples. We are constantly Kowalski, the outgoing Premier, and many MLAs who are about being told the same line by every MLA, including federal, including to retire when the election comes will receive more than a million city: I am working hard for what I do six days a week. That’s not dollars in severance packages. When Premier Ralph Klein got rid true. Government MLAs get hard-working employees that they hire of the pension plan for the Premiers and the MLAs, instead they in their constituency offices. Those are the people who work hard. topped their severance packages and other benefits. Mr. Chairman, just compare that to the average citizens of this Justice Major: What we’re really talking about is what MLAs province or anywhere else who will never earn that kind of should get, so what do you think they should get? million-dollar severance package. Okay? Just look at the current Mr. Pirbhai: Whatever is the inflation rate. We shouldn’t go by city council in Edmonton. For the last five, six years they, too, what the Fort McMurray – you know, Statistics Canada uses fig- have increased their pay hikes and perks, and they always say that ures from Fort McMurray. You can’t go by Fort McMurray it’s nonpartisan. The citizens of Alberta who earn less than $14 an because Fort McMurray is an oil patch. If I had a trade – I don’t L268 | Appendices 269 appendix L t - - r Appendices | Appendices | verifiable verifiable January 23, 2012 23, January s observation to the review review the to s observation May 2012 Repo a lot of money. The previous previous The money. of lot a vernment MLAs. Idaho border committee, which never met, met, never which committee, border -Idaho d done or not done. I’ll just note that Alberta Alberta that note just I’ll done. not or d done people’s working lives, over 40 years, so there is is there so 40 years, over lives, working people’s resettlement ora transitional allowance. Over a y government MLAs. So there are two examples examples two are there So MLAs. government y Edmonton paid and stable career choice. So I’m not complaining complaining not I’m So choice. career stable and -paid ce the new program of compensating all members for members all compensating of program new the ce This is a province where one political party has held power for for power held has party political one where province a is This I’m going to underline again here that I am not complaining complaining not am I that here again underline to going I’m a offer to I want that issue second A Now, additional monies paid to members of the government government the of members to paid monies additional Now, Sin Now, prior to the implementation of the pay that recognized all recognized that pay the of implementation the to prior Now, pick on one in particular, but one of the members was a was members the of one but particular, in on one Not to pick ey leaveey political office. There can be exceptions to that, people ant this review to go forward believing that the status quo is is quo status the that believing to forward go thisant review panel is the resettlement package. Now, this benefit is to assist the the to is assist this benefit Now, package. resettlement the is panel To life. to nonpolitical back transition to successfully members over accrued amounts these people, most even probably many, terms served by members seem like speaker certainly reflected that.But observations my show, again, I’ll and parties, opposition of on members impact differential a how. explain most than longer a culture of power and exclusionthat exists as a result of that. Fair a have parties opposition of members that is experience the not or once amount reasonable a pays that work finding time a of devil th quickly can or who a farm like business family a to return can who upgrade and return to a professional practice law or medicine. committee work, I notice that again members of the government government on sitting for sums additional paid being are party which, and a year $40,000 of range the in pay which committees, onl allow again, of differential pay. on positive work to paid be to honoured am very I pay. the about don’t I But government. good for and policy public for changes w - argu compelling a produced ever has one No equitable. or equal more paid be should members private government why on ment members. private opposition than any towards counts money this as effect double a has party calculation of a you’re mark $40,000 to $20,000 that at years four of period per this that $160,000 to $80,000 of differential a at looking 6:20 funds resettlement the which from on and based then is centage are calculated. manager, and frankly to those two sectors politics looks like a a like looks politics sectors two those to frankly and manager, wellvery point the make to do want I But paid. being I’m much how about that there are differences between pay how and benefit packages affect members of the government party and members of have I years 15 last the for example, an For parties. opposition consistently been paid less than go party policy committees, every government MLA outside of MLA government every committees, policy party chair to year a $40,000 to $20,000 of range the in paid was cabinet is that and or another, committee on some sit to or of number a fact, In statements. benefits and pay MLA the through these committees that government MLAs were paidbe to on were covered the by media just shortly before thepractice was implemented. was pay new the and abandoned Alberta the of member member the questioned, When documents. any produced never what for account to no obligation under was she that responded ha committee the doesn’t share a border with Idaho.Sothere certainly was an chose they and members, its compensate to government of ability government the of member any discover to able not was I so. do to above money, of amount additional an receive not did that party MLA government only allow which committees for pay, base the participation. ustice profit -profit J -for ister if if ister you just make thejust make ust say this, that in in this, that ust say ion of this province. I I province. this of ion free portion of MLA MLA of portion -free . I am speaking tonight tonight speaking am I . MLA Compensation and Benefits Review – Review Benefits and Compensation MLA -Centre in your time in this particular particular in this time in your I could make $100 an hour. That That hour. $100 an make could I - govern between pay differential of ns they are the top 1 per cent, and they should should they and cent, 1 per top the are they , MLA, Edmonton Thank you. You understand that I that understand You you. Thank I think I have your point. You have used up your your up used have You point. your have I think I Thank you very much. Do I address you as as you address I Do much. very you Thank All right. All Okay. Well, thank you for coming. for you thank Well, Okay. Yes. Go ahead. You can take your pick. You M say can : : : : : : : Mr. Major, if I can say this. When you present your your present you When this. say can I if Major, Mr. Thank you very much. very you Thank I understand, sir. understand, I If I can just one make final comment. : : : : Major Major Major Major Major onourable? If you would give me the correct address. correct the me give would you If onourable? -26 Pirbhai Pirbhai Pirbhai Pirbhai Blakeman Blakeman am not complaining about how much I I much how about complaining Now, not be let clear. me I am My name is Laurie Blakeman, and I would welcome you to my my to you welcome would I and Blakeman, is Laurie name My I don’t believe that MLAs should keep on getting a 30 per cent cent per 30 a on getting keep should MLAs that believe don’t I Thank you very much for putting for much very you Thank Thank you, Mr. Chairman. Mr. you, Thank REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | paid.am I into came politics an artist as and as a not -Centre Edmonton of constituency fabulous endeavour, and I hope that you’re still friends with Speaker Speaker with friends still you’re that hope I and endeavour, Kowalski at the end. ment backbenchers and members of the opposition, resettlement resettlement opposition, the of members and backbenchers ment opposition of members for politics after life and allowances tax the around issues some also and parties, opposition party but not specifically specifically not but as a member party of an opposition Opposition. the of All Official the views necessarily, representing, the in spoken been already have tonight comments my of Assembly at various times, so none of this is particularly a secret. observatio my includes It pay. hikepay as they took two years ago. And every year after that they have gotten increases more than, actually, the average personally I and that, citizens believe ofAlberta don’t make I . people more makes It that. says MLA an when it believe don’t money more making are MLAs that hearing keep they when mad because they have the same one line: working I’m hard. It way. that be shouldn’t Justice is hard work. We constantly hear cs Canada hear Statisti the constantly say average We hard work. is salary in Alberta. have a trade; I’m an accountant – MLA recommendation, that I pass it on, and it’s decided by the the by decided it’s and on, it pass I that recommendation, Assembly? Mr. Justice Mr. Laurie Blakeman or as H report to the Speaker of the House, if you can j can you if House, the of Speaker the to report up it’s Now increased. just was wage minimum our province this same the are Where nation. the in lowest the is It hour. $9 an to not I’m unions. were There you. asking not I’m politicians? populat the of cent per 99 those for speaking politicians, these that Speaker the to recommend to you ask would – MLAs the including Justice 20 minutes. Mr. cent. per 99 the to listen Mr. Justice Alberta Liberal Caucus Ms Justice like. Ms REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report January 23, 2012 MLA Compensation and Benefits Review – Edmonton MLA-27 In my experience, looking at my previous colleagues and other Ms Blakeman: That’s correct. On committees that only govern- colleagues in opposition, it’s at least two years and sometimes more ment MLAs are able to serve on. for a member to find other work that pays a living, reasonable amount. I want to underline that a resettlement allowance is to be Justice Major: I understand what you said. Yeah. used as a transition, not as some kind of lump-sum pension Ms Blakeman: The last point I want to bring to the justice’s contribution. attention is the idea that we have a nontaxed portion of our salaries. When I think about people I’ve served with who served well and I would offer my observation that I think that should be abolished. It came from varied backgrounds, as it should be – you know, your just confuses people, and it seems like we’re sneaking away with Assembly wants to be reflective of the public it serves – Sue Olsen something. Currently it’s expected that the members will cover any was a police officer, Grant Mitchell worked in finance, Lance White additional costs from that nontaxed portion, but one of the things was an engineer, Mo Elsalhy was a pharmacist, Bruce Miller was a that does get covered in there or is supposed to be covered in there minister. The list of these people goes on, and all of them have been are tickets to events in the community. unemployed, underemployed, or had to significantly retrain. I want to let the justice know that this may have worked once, but Now, in my case I come from the not-for-profit sector, or the it certainly doesn’t work anymore. Part of that is the government NGO sector. Reasonably, what not-for-profit agency is going to hire funding policies that cause all of these not-for-profits to charge me when every one of them is dependent on some kind of contract money for everything. They’re always trying to raise money, so or grant or licence from this government? So we have 40 years of even annual general meetings now have a silent auction or a 50-50 one-party rule. There are certainly examples of where NGOs have raffle or something on the side to make money. I am no longer received – and I’m going to put air quotes around this – visits from invited to attend an event to honour volunteers or to know more high-level government officials to advise them that a certain about the organization or, you know, to just participate in the behaviour should not continue. Even worse now is the self- community or support the community. I’m asked to purchase a censorship by those NGO organizations who believe that hiring a ticket. I checked at my office. I’m now averaging requests between member of an opposition party would result in some kind of a $750 to a thousand dollars a month in invitations to purchase tickets negative response from government. In other words, they fear being to fundraising events. Of course, I can’t pay for that out of my punished if they hire a member of an opposition party. constituency budget, and I don’t know that I’d want to, and I I expect, using myself as an example, that I’ll have to use my certainly can’t afford personally to continue that on an ongoing resettlement allowance to retrain, to live on while I go back to basis. university and retrain in a completely different field. I’ve asked and To conclude, I really think it’s important that MLAs do not set have been told that my years of political experience won’t count in a their own pay and benefits. No oil executives in Alberta are able to university setting, and I could expect to spend three more years in do that. No CEO can do that. I don’t think it’s appropriate for us to university in order to qualify at another faculty and then complete a do that. I think it should be determined by an independent master’s degree there. committee. On the same topic of resettlement I ask the justice to also consider the money at hand after an individual pays tax on that income. A Justice Major: Composed of whom? $500,000 resettlement after taxes is $300,000 in the bank account. Ms Blakeman: I don’t care. It just shouldn’t be a final decision Invested now for the average age that you’ve got of people leaving made by the people who are then the beneficiaries of it. It’s politics, middle age, and at 3.5 per cent that would give a member inappropriate. If you want to put a past MLA on there, fine. Justices, approximately $14,000 a year as retirement income. fine. I think there should be members of the public on it, quite frankly. I just think it’s inappropriate for someone to vote them- Justice Major: Where would you get the 3 and a half per cent? selves their own pay and benefits. Nobody else gets to do it. Why Ms Blakeman: Well, that’s the best you can possibly get in any are we special? kind of investment at this point in time. I was trying to be positive. As I said before, I think the tax-free portion of the MLA pay should be abolished, and the pay should be appropriately set. Justice Major: Do your math at 2 per cent. 6:30 Ms Blakeman: I’m not going to do that without a calculator now. Justice Major: On that point you’re not alone. What the question I would just embarrass myself. But it’s significantly less. I’ve asked others is that if you abolish that – what that is is really a contribution by the federal government by waving the tax. There’s a Justice Major: I take your point. special tax exemption under the Income Tax Act, section 81, that permits this tax-free allowance. It’s restricted to MLAs in that Ms Blakeman: Okay. Really, my point is that it’s not a lot of section, but others go on to cover council. I don’t know why that’s money, and if you’re going to have to use that money as a there, but it is there. So if you eliminate the tax-free allowance, the transition, you’re not going to have it in the bank after the fact. So government of Alberta would have to bring you up in your pay to to look at it as some kind of lump-sum pension payment I think account for that. does a disservice to a number of people. Again, I’m not complain- Let’s use some rough numbers. If the tax-free allowance is ing about the pay or the resettlement, but I came here to make sure $25,000 a year, then the government would have to pay $40,000 to that it was on record that in this province at this time pay and the members so that they could pay their taxes and be left in the benefits like the resettlement allowance are not equal between same position that they are now. Taken in that light, it’s a subsidy members of the government caucus and members of any by the federal government to the province of Alberta. opposition caucus. The gentleman from the tax association was in favour of eliminating it on the basis that a million dollars wasn’t that much, Justice Major: That’s because the government members through but I’m curious why we would absorb that extra payment when the committees earn more? federal government is really subsidizing the tax-free allowance. L270 | Appendices 271 appendix L t - r We’ve months months - Appendices | Appendices | January 23, 2012 23, January following this, as a this, as following from a sector that is that a sector from , May 2012 Repo cognize thatpeople come from profit sector. That’s just the way it is just the here, way sector. That’s -profit -for pensation as part of master’smy degree at the act that you’re doing this work. this doing you’re that act I would lose my house if it was a six it was if house my lose I would Thank you. Thank Thank you. Thank rofit sectors. Being public servants, MLAs should MLAs servants, public Being sectors. rofit Edmonton : : : Mr. Chairman, my name is Charan Khehra, and my and my Khehra, Charan is name my Chairman, Mr. must be provided a fair compensation package and package compensation fair a provided be must : ber of the third opposition party in Alberta for about about for in Alberta party opposition third the of ber Major e making 18 recommendations for your consideration. your for 18 recommendations making e Khehra Blakeman Blakeman will address the MLA compensation issue under the following following the under issue compensation MLA the address will Thank you for hearing me out. I appreciate that very much, and and much, very that appreciate I out. me hearing for you Thank I think it’s important that we re we that important it’s think I I’m definitely going to use every penny of that resettlement to to resettlement that of penny every use to going definitely I’m should “It say, to enough abrupt as be can you if know don’t I I are Assemblies and Legislative MLAs remarks. general First, Sometimes MLAs confuse their roles as the government, as the Justice Ms served for different times. My argument is that it shouldn’t be be it shouldn’t that is My argument times. different for served based on the that fact theredifferential is between pay government opposition. of members and members I appreciate the f 6:40 Charan Khehra Citizen Private Mr. transition. I just think given the political climate political here the I’m not given think just I transition. job, a get to expect could I where job a get to able be to going not the in is which do. to expect I which on,” move princess; up, it “Suck know? you different backgrounds, and there does seem to be a difference be difference a be to seem does there and backgrounds, different governing the of members that backgrounds of kinds the tween The from. come opposition from people and from come party come having it into coming their of chance not giving them very good retirement benefits is pretty high. pretty is benefits retirement good very them giving not I’ll this point, and at worth terms’ to entitled be four I will resettle. getd to an myself a point try where I can to it of all using up end get a decent job in another sector. be capped at this” forof all usbecause the pointthat is all we sectors. different and backgrounds different from come member of the Alberta civil service as a senior economist with the as this, following and years; of number a for labour of department mem staff a and party third the for leader the to EA as years half a and eight am I think I and 2005, in retired I projects. special of director also compensation. MLA the of aspects on some speak to qualified interest in matters of compensation and working conditions has has conditions working and compensation of matters in interest of the as a first, last the member 40 for years: intact remained topic the studying in England; then service civil United Kingdom of employee com and in Strathclyde Glasgow; of University five headings: general some remarks; current state of MLA of description brief a findings; interesting some compensation; Then allowances. and subsistence living, travel, of reimbursement b will I for support full our deserve and institutions democratic valuable As individuals. qualified and competent retaining and electing MLAs such, and freely offices public for run People conditions. working willingly to serve anddifference. a make For it become may some public, in opportunities career future other to stone stepping a nonp or private, hours long work generally MLAs wealthy. become to expect not office. their of pressures and demands many with - compen own their of setters as and economy, the of protectors sation. In recent years many MLAs and other elected officials conduct their regarding scrutiny public of subjects become have must commission the Therefore, spending. inappropriate and Ms hion magazines. magazines. hion . This is part of it. The it. The of part is . This – Review Benefits and Compensation MLA hat nontaxed portion is to to is portion nontaxed hat quickly in accommodating accommodating in quickly . That line, I recognize, is hat it’s the taxpayer. same -earning years. . pension set aside. I’ll be leaving it leaving be I’ll pension aside. set . . profit sector, I was never paid enough enough paid never was I sector, -profit -for e arcane etting back into the mainstream. Do you have have Do you mainstream. the into back etting free portion. I personally would prefer that just just that prefer would personally I portion. -free payout pension plan be be plan pension -payout defined -contribution, The transition allowance: I take it that you’re in take I it that you’re transition allowance: The Thank you for pointing that out because I like to to like I because out that pointing for you Thank I wish you all the luck in the world. Most people people Most world. the in luck the all you I wish How about explaining it rather than paying it? paying than rather it explaining about How : : : : ned about it. I think I’ve been able to contribute, and I I and contribute, to able been I’ve think I it. about ned uld be a cap, that no matter how long you’ve been in, the the in, been you’ve long how no matter that cap, a be uld Major Major -28 Blakeman Blakeman fare in retirement given that they’re probably elected during during elected probably they’re that given retirement in fare I didn’t know it came from the feds, but I would still tend to to tend still would I but feds, the from came it know didn’t I What I see is that we seem to go out of our way in political life life in political our way of to out go seem we that is see I What I’m tability. accoun and transparency of question a it’s me To We’ve been told the by Speaker that t That was the tax Coming from the not the from Coming REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | is, it what that’s because the money pay just should we that argue and that allows people to see what actually we’re paid andnot som into to get have the job itself. job the learn something new every day, and that’s what I’ve learned ea, as the as far id no had I 15 years. for served I’ve today. accounting is itself done, that that’swhere that benefit comes from. many how do, we what understand to people for hard it make to why and paid, we’re what work, we hours because that really isn’t it but $85,000, paid you’re that idea whole makes just taxed not is it of some because $100,000 really it’s why? and paid you are much how then go: people perfectly happy to havesalary my released publicly and all the but think it. I go that it’s very appropriate, with that’s benefits nontaxed this have you why people to explain to difficult very portion. additional the but to events, given tickets like things cover on us place others and on ourselves place we that expectations you thing, of sort that of all and clothing and cleaning dry about pretty portion untaxed that up do use Ms MLA Justice a plain old joint old plain a believe that if the House isn’t sitting, we’re on holidays and I’m I’m and holidays on we’re sitting, isn’t House the if that believe fas reading and bonbons eating beach on a sitting Peoplebelieve want to that. They’re not entirely openbelieving to that public the persuade to Trying things. other doing are we that this is a good deal for Albertans because the feds are covering it, t back argue would they think I well, - appro whatever or 65 at start would that MLAs for established priate retirement age is determined that. to contribute to happy I’m and now, quickly pretty moving Ms believe I Assembly. the to valuable been has background my think does that but people, of backgrounds of number a have should you able be to going they’re how at look to have to going we’re mean to highest and productive most their favour, because of the reasons you gave, that there be some help in g financial I’ve that complaint The be? should that long how on opinion any read inthepaper that is retiringmembers, they’ve if been there for that here said have Others count. 15 years whole the then 15 years, there sho a year. or pay months’ six exceed shouldn’t allowance transition on that? view any have you Do with not that much more although I’m grateful for what I did have, have, did I what for grateful I’m although more much that not with retirement. in exist to going am I how about worried quite I’m but I’m but on it, freight full the pay to have to job this expect don’t I quite concer Justice into politics came so I aside, to anything put in sector that money kind of in any little very with REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report January 23, 2012 MLA Compensation and Benefits Review – Edmonton MLA-29 clearly enunciate principles in terms of MLA compensation to Consider the following two examples. The Premier received gain and maintain public confidence in the system. $221,438; the Speaker, $205,407; the Leader of the Official Now, following this, the current state of Alberta MLA Opposition, $203,985; and the ministers ranged between $197,546 compensation. Alberta Treasury in its Report of Selected Pay- to $199,056. So these are the people who are highly paid in ments to the Members and Former Members of the Legislative comparison to others. We can argue about their duties and respon- Assembly and Persons Directly Associated with Members of the sibilities and so on. Legislative Assembly for the period ended March 31, 2011, There was one MLA who received under $130,000; six received provides some information on the major components and annual $130,000 plus; eight received $135,000 plus; two received rates of compensation for Alberta MLAs. $140,000 plus; 14 received $145,000 plus; 12 received $150,000 First, remuneration. MLA indemnity is subject to tax, and that is plus; seven received $155,000 plus; five received $160,000 plus; $52,092. Then you have the expense allowance, not subject to tax, and one received $165,000 plus. The lower paid were generally of $26,046. On my chart you would find that I’ve got a number of the opposition MLAs, with some exceptions of the odd govern- question marks, and I will be talking about what these question ment MLA. marks mean. Each MLA is paid the annual indemnity amount of 6:50 $52,092 plus a tax-free allowance of $26,046, a total of $78,138. In addition, there are also other allowances, including transition, Now, talking about reimbursement for travel and living and and reimbursements of varying amounts, as I have indicated subsistence allowance, these allowances are, of course, reimburse- below. First, the allowances for Legislative Assembly committees ments and depend on distances travelled and days spent and those in category A and C pay a monthly amount of $1,500 to the chair kinds of things. But the important issue is that in one case a and $1,250 to the deputy chair. Members are paid $1,000, and minister claimed $79,478 for travel and an MLA $69,003. Sub- they are not supposed to exceed $3,500, a maximum of three sistence allowance was $35,685 in one case. The most important committees. The Speaker and opposition leaders in lieu of all thing to remember here is that receipts are only required when the committee activity are paid $3,500 monthly. There are no category amounts are above certain standardized rates, so you don’t have to B committees at this time; however, MLAs would be entitled to produce any receipts for them. If the amounts are higher, then you some payments for their attendance if such committees were in would be required to put in the receipts. existence. The next one is transition allowance. Transition allowance is Allowances for government committees. Now, they pay paid to an MLA on ceasing to be a member on resignation, being members who serve on government committees, boards, commis- defeated at election immediately following dissolution, or at the sions, councils, or other bodies established by an act of the date of death, and it is based on the highest rate of monthly Legislature, by the Lieutenant Governor in Council, by a member indemnity and expense allowance received by the member multi- of the Crown, or by a regulation. The rates are given in Order in plied by one month for each year of service prior to March 20, Council 606/2009. 1989, plus three months for each year of service subsequent to that There are also additional amounts for holding office in addition date. So there are two different rates, one for before and one for to that of an MLA. The Premier is paid $81,312; the Speaker, after, and this is based on the average monthly salary of three $63,912; minister with portfolio, $63,912; minister without calendar years in which the member received their highest salary. portfolio, $28,392; Leader of the Official Opposition, $63,912; Now, Mr. Chairman, I would move to some recommendations Deputy Speaker and Chair of Committees, $31,968; Deputy Chair following this discussion that I just had. The first one is that I of Committees, $15,984; and leader of a recognized opposition hope the commission will establish clear guiding principles for party, $28,392. MLA compensation. Such principles will be based on trans- In addition to this, there are special members’ allowances, parency, accountability, and fairness. which include the Official Opposition House Leader, $13,596; Recommendation 2, that MLA compensation be comparable to third-party House leader, $10,872; chief government whip, other similar occupations, neither exceeding nor lagging behind. It $10,872; assistant government whip, $8,135; chief opposition should also reflect the general community standards, including whip, $8,136; assistant opposition whip, $6,792; and third-party minimum wage, social assistance, assured income rates, and the whip of a recognized opposition party, $6,792. seniors’ pension increases. The Standing Committee on Members’ Services, with a Recommendation 3, that MLA compensation be determined not majority of government members, is the body that sets and adjusts by MLAs but by an independent body. We can argue about the the rates of MLA compensation. It’s all in-house. The rates are independent body, who it should be, and so on. adjusted on April 1 of each year by the same percentage increase Recommendation 4, that an independent commissioner be or decrease as in the average weekly earnings for Alberta as appointed and provision be made for support staff to conduct reported by Statistics Canada’s Survey of Employment, Payrolls internal and external surveys and research into comparable and Hours for the immediately preceding calendar year. occupations. These comparable occupations would mean that if Compensation has remained unchanged since April 1, 2008. you look at the present structure of the Legislative Assembly, The standing committee decided not to adjust rates for the there are some teachers, there are some real estate agents, there are financial year April 1, 2010, to March 31, 2011. Had the some bus drivers, there are some people who are lawyers, and compensation been adjusted pursuant to Alberta average weekly there are some people who are businessmen. So there . . . earnings, the percentage increase would have been 2.92 per cent. Now I will give you a couple of examples of some interesting Justice Major: This is interesting, but time is running, and I findings. When you look at the information available for 2010- would like you to summarize as you go through your 2011, a breakdown of 83 MLAs’ total annual compensation – that recommendations rather than elaborate. excludes reimbursements for travel and living and subsistence allowance – and transition allowance for the period April 1, 2010, Mr. Khehra: Thank you. to March 31, 2011, clearly shows a bias in favour of government Recommendation 5. Besides the MLA compensation such a members. commissioner would also review compensation for senior public L272 | Appendices 273 appendix L t r . . . Appendices | Appendices | January 23, 2012 23, January two years for the the for years two Strathcona when you speak of speak you when fees and all kinds of of kinds all and fees ’ week. Have you had a had you Have week. off period for lobbying or lobbying for period off - May 2012 Repo - Edmonton or suppose he’s a welder and he has has he and welder a he’s suppose dipping of pension plans should not not should plans pension of dipping - you’re not talking about that? about talking not you’re t. If you have any questions for me, I me, for questions any have you If t. hathealth care benefits and life insurance You’re speaking about appointments such as such appointments about speaking You’re I understand when you speak of directors of a of directors of speak you when understand I You have answered your questions. We’ve given We’ve questions. your answered have You , recommendation last On your Yes, I have. What I would like you to do rather than than do rather to you like would I What have. I Yes, Whom I knew. I Whom It has been a long time. I can never forget it. forget never can I time. long a been has It But you’re not speaking of of employment? speaking not But you’re Edmonton : : : : : : : : I mean that there are directors What I mean is that there is a lot of influence on the on the influence of lot a is there that is I mean What Thank you. Thank No. Yeah. That’s right. Good evening, sir. First, I’d like to say that it’s been a been it’s that say to like I’d First, sir. evening, Good I want to thank you for hosting this review. I guess the the guess I review. this hosting for you thank to want I Right. Perfectly. Sometimes you would want to forget, sir. to forget, want would you Sometimes : : : : : : : : : Major Major Major Major Major Major Major Major s? Nugent Nugent Nugent Nugent Khehra Khehra Khehra Khehra Khehra From a background point of view, my father was Terry Nugent, Nugent, Terry was father view, my of point background a From Recommendation 18, that the cooling the that 18, Recommendation This concludes my submission. I wish to thank you for giving me giving for you thank to wish I submission. my concludes This Recommendation 16, t 16, Recommendation Double 17. Recommendation who was a Member of Parliament f read it is speak to it. speak it is read Mr. commission has had my submission for a a for submission had my has commission chance to read it? Justice Mr. long time, sir. Approximately 30 years ago I was an Alberta Power Power Alberta an was I ago 30 years Approximately sir. time, long of pleasure the had I and regulation, rate in working employee hearings. EEMA to the books first your carrying Justice Mr. Rory Nugent Citizen Private Mr. 7:00 Mr. to go to work for a company – a company for work to go to company, but an if MLA retires – compensation. Justice private sector. sector. private When MLAs or theyretire, ministers appointedget to on. so and boards corporate various Justice accepting corporate appointments, what do you mean? do you what appointments, corporate accepting Mr. Mr. accepting corporate appointments be legislated to MLAs. government for one year and and ministers Premier Justice Justice Justice Mr. director be allowed. some you with share and submission my to make opportunity the be I will compensation. on MLA perspectives and insights, ideas, repor to your forward looking them. address to happy very be would been they’ve but submissions, to your make time extra you much. very you thank and thoughtful, Mr. Justice retained. be provisions that that dollar -dollar -for make upmake the are necessary nment members, members, nment nce can afford to do free provision and and provision -free MLA Compensation and Benefits Review – Review Benefits and Compensation MLA a decreasing sliding scale, dollar matching contribution like like contribution matching dollar - ernment members. This worsening worsening This members. ernment -for should be eliminated and reasonable reasonable and eliminated be should hat RRSP as the a dollar is – – them of list long a is there ion 6, that the independent commissioner report report commissioner independent the that 6, ion And if this is eliminated, the province of of Alberta province the eliminated, this is if And Okay. You won’t be popular with the citizens, but but citizens, the with popular be You won’t Okay. Even if it costs them money? them it costs if Even Allowances for offices other than MLA, the MLA, than other offices for Allowances : : : Well, I think there is a conflict. One is that from the that is One conflict. from think there a I is Well, Even if it costs money. it costs Even if : : : sector pension plans. pension -sector pay. As you just mentioned, the amount that is being being is that amount the mentioned, just you As pay. Major Major Major -30 Khehra Khehra Khehra mittees be part of an MLA’s duty, and that the allowance be allowance the that and duty, MLA’s an of be part mittees Recommendat Recommendation7. Becausevarious of allowances, MLA the tax the Eliminate 8. Recommendation Recommendation 11, that attendance at Legislative Assembly Recommendation12, that as the government committees are Recommendation 14. A reasonable amount of transition transition of amount reasonable A 14. Recommendation it be reconsidered, plan pension a Should 15. Recommendation Recommendation 13, t 13, Recommendation Recommendation 10. The special members’ allowances – REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | servants in Alberta, including the deputy ministers, assistant assistant including deputy ministers, the in Alberta, servants the by appointed are who officers other and ministers, deputy Privacy General, Auditor example, for Assembly; Legislative on. so and Ombudsman, Commissioner, MLA Assembly. Legislative the to recommendations and findings his internal serious caused has system compensation MLA current gov of favour in disparities rectified. immediately be should situation require that MLAs also pay tax on $26,092. This is, Mr. Mr. is, This $26,092. on tax pay also MLAs that require They paying. is sun the under else everybody because Chairman, should subsidized theby federal government is one that’s irrelevant as far as I’m concerned. Justice Mr. Mr. difference, and that would be taxed. So by eliminating this, you you this, eliminating by So taxed. be would that and difference, are effectively havingthe province of Alberta send to Ottawa, at witnesses Now, dollars. a million over taxpayers, the of cost the provi The fine. that’s “Well, said: you before that.” Is that your view? some save to taxpayer the like would we view of point taxpayers’ to unfair is it think I picture overall the in but money, of amount zens. citi the Citizens wanttransparent a very system. Justice to keep the at the MLAs same salary would have to Justice on, so and Leader, House Opposition the officials, to pay the is, which I have listed com eliminated and reasonable amounts be reflected in the basic MLAs. all for rates indemnity plan. pension a into moved be should it or continued, be it plan, amounts be reflected in the basic indemnity rates of all MLAs. MLAs. all of rates indemnity in basic the reflected be amounts These special considerations and special privileges should be reduced or eliminated. gover to funds additional provide to used solely this category be eliminated and added to the list of Legislative Legislative of list the added to and eliminated be this category political of matters any be there Should committees. Assembly caucus at addressed be could they expediency, or strategy parties. political the by meetings and excessive be not must it however, order; in is allowance on be should It life. for guaranteed dollar on a based be should gradually ending at 70 age not if earlier. public other that’s fine. that’s Mr. but somewhat excessive andneed tobe reviewed. Premier, and so on – on so and Premier, REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report January 23, 2012 MLA Compensation and Benefits Review – Edmonton MLA-31 Mr. Nugent: . . . from 1958 to 1968. Justice Major: We’ll take his successor. Justice Major: I knew your uncle as well, so you can’t use family Mr. Nugent: Yes. Okay. Yes, sir. connections. So the idea is that individuals who would contemplate running for the government would not have to worry about a drastic pay Mr. Nugent: Right. cut. They would still have to worry about a public image, about The first part that I’m bringing to this hearing is a child’s view, loss of privacy in their family life, about sacrificing their personal where things have greatly improved– and I realize this is an MLA time to serve the public, and maybe less time with the family. submission – for politicians in general. When my dad was a They’d have to worry about all the other good and bad things that Member of Parliament, he was only paid two trips a year home come with being elected to office. from Ottawa. He did sacrifice on his salary. He was a partner in a five-member firm, and he left that firm to be a Member of Justice Major: In considering your plan B, where the person who Parliament for 10 years. When he was defeated in 1968 after 10 seeks office has earned significant amounts, say $400,000, and years of service, he started with a pension of $200 a month. you compensate them at a higher rate than someone who has Things have greatly improved, and maybe the pendulum has earned $50,000, you do that because of his record, what he’s done swung the other way on certain pension items or whatnot. Being in private life. He’s prepared to serve the public, but he shouldn’t brought up in a political family, I’ve been dragged through so be forced to do that and be penalized too severely. many conventions and nomination meetings and everything that It’s an interesting concept, but what happens when you get to I’ve always had a keen interest in who’s running and what their the Assembly and one MLA thinks that as an MLA he’s doing qualifications were. Over the years the people that I see willing to more and working harder but is paid less because in private life, step forward: there’s a difference in their qualifications as com- for which he wasn’t well suited, he was paid less, but now in pared to the businesses where I’ve been working. political life he’s doing a better job than George from Suncor I guess where I’m coming from is the wage gap for the higher because George is so married to private industry that he can’t paid executives, who have the connections, who have the ability to adapt to the public forum of politics? There seems to be the stand back and have a vision in how to control and organize, and potential for unrest among the uneven salaries although there may they are well compensated. For them to step back into public life be merit to paying people what they earned. and take not a 30 or 40 per cent wage cut but an 80 or a 90 per cent wage cut: it’s getting harder and harder for those individuals Mr. Nugent: I would not be surprised if there was unrest, but to step forward. whether or not that unrest is merited, I guess the ultimate test When you come to a wage review, as I’ve stated in my paper, if would be the next election, whether or not the voters agreed that you were a business, you would be able to judge an individual on that individual is worth four or five or 10 times more than the a combination of their education, their experience, their special person sitting beside him in the Legislature Building. talents. When we go to elect an MLA, it’s one price for all. What I’m proposing is that even to win the nomination the I feel that with this review, if you stay within the normal person has to run stating what his expectations would be: the guidelines of what’s been going on, there may be another review standard salary, plan A; or plan B, where he declares what his six years down the road or 10 years down the road where we’re average salary would be over so many years. I didn’t say it in my addressing the same problem because we haven’t addressed the submission, but with that plan, if you were to go ahead and core issue. In my mind, the core issue is that we have to break this recommend this and they were to adopt it, you could make it mentality that all MLAs should be paid the same. Business does retroactive. Someone who is, let’s say, elected in the last four not pay all of its executives the same, and therefore society has a years and if they were making substantially more three or four method that can recognize the skills that this province needs. years ago, could go back and run under plan B so that they could get a pay raise as well. Justice Major: I don’t want to interrupt, but can we get to the 7:10 point? In your paper you proposed two different types of plans. Ultimately, what I want to see are better qualified candidates to Mr. Nugent: Yes, plan A and plan B. Plan A is the status quo. appear. I feel that as our world becomes more global, we don’t You will hold this hearing, you will make tough decisions as to just have to protect ourselves from Ottawa and B.C. and compensation, pension, severance, tax-free amounts, non tax-free Saskatchewan anymore. It’s more international. We need the amounts, and that would be good in establishing a base. What I’m longer strategic planning. Just how businesses learn to work saying is that anyone who ran for MLA would get the base salary. together, we need our governments to work together and overall But we have an option where you could put it on the table, if we co-ordinate and provide a better solution or better protection for establish a plan B, that if an individual has proven himself in the assets of Alberta. When I say “the assets of Alberta,” that’s not business, and you take his last three or four or five income tax only what the province of Alberta controls. If they were to fail, returns and what his taxable income was, not necessarily from then the value of my house and everyone else’s house goes down, stock dividends or options or something like that, and you which is our main source for our retirement and the biggest establish that that individual is making $400,000 a year, $500,000 economic nest egg that most Albertans will have. By protecting a year – in my paper I used an extreme example, the president of that, we’re all better off. Suncor. If you wanted Rick George to run this province and There will be criticism because of an additional cost. But even wanted to steal him away from Suncor, and you wanted to pay that if you took the MLA’s salary and quadrupled it, that would be a much . . . minor percentage of the annual budget of the province of Alberta, and I did point that out in my opening remarks. It’s significantly Justice Major: He’s already retired. less than even, let’s say, what your RRSP management fees are. Mr. Nugent: Okay. Justice Major: I understand what you’re saying. I see problems with it. L274 | Appendices 275 appendix L t r Appendices | Appendices | ions with ions with January 23, 2012 23, January ’ve usefully used used usefully ’ve , the of mayor the city of May 2012 Repo .] ers with an election every four years or so. It’s It’s so. or years four every election an with ers Well, I think, Mr. Nugent, you Nugent, think, I Mr. Well, The question you’ve raised as to the mandate, that that mandate, the to as raised you’ve question The Thank you. Thank in yesterday’s Journal Edmonton : : : I appreciate that, sir. Thank you very much for this this for much very you Thank sir. that, appreciate I Yes. dren, and they’ve got to have the courage and the the and courage the have to got they’ve and dren, : : term investment-term so that the right decisions are made for Major Major Major Nugent Nugent to the er competition city. If you look you If You know, a lot of people say that they’re way overpaid. Well, Well, overpaid. way they’re that say people of lot a know, You That appears to conclude our evening sitting. Thanks very very Thanks sitting. evening our conclude to appears That adjust the compensation. My prime reason for this submission was was submission this for reason prime My compensation. the adjust the by retained and forward brought be candidates better that restricted. is now right feel I which method, compensation Edmonton is not accepting his full salary, and there are a a few are there and salary, full his accepting not is Edmonton full their accept to not chose that 12, of 3 out think I councillors, increase. I that feel they are undermining the process of attracting bett million $500 spend to going they are decisions: the at look you if or freeway this building be to going they are or rink, a approving The enough? infrastructure,some forward are they looking have of business the CEOs the business, if look at you similarities: dividend; quarterly a about worry and shareholders the to report to the elected officials have a longer time frame, but then it’s in front of all the sharehold civic the and business both but guess, I judgment, bigger a officials have to balance the immediate return for the dividend or long the grandchil our that. do to vision Justice it doesn’t say why. Mandates seldom do say why, but I’ll tell you you tell I’ll but why, do say seldom Mandates why. say doesn’t it why. It was to assess the fairness and recommendat make recommendations Those paid. be should MLAs to what respect a not It’s debated. be to it’s where Assembly, the to go will was. mandate the of purpose the what it’s but answer, profound Mr. Justice up your 20 minutes. up your Mr. opportunity. Justice adjourn. We’ll much. p.m 7:18 at adjourned meeting [The d you have two have d you the wage gapgrows you can expect them to or four years would be would years four or MLA Compensation and Benefits Review – Review Benefits and Compensation MLA s by goes a lot than quicker it I’ve served on some charitable organizations. organizations. charitable on some served I’ve see businesses not liking it because maybe their their maybe because it liking not businesses see I have no more questions. I understand what what understand I questions. more no have I What about the notion of public service, that people people that service, public of notion the about What limits? about term What : Well, I I Well, can see MLAs notcurrent liking better : : That’s where working with a consensus would give give would a consensus with working where That’s That’s been true forever. In 1958 when my dad was dad was my 1958 when In forever. true been That’s I see value in term limits. There is an argument, you : : : : Major Major Major 2 didn’t say why you were holding this. Obviously, it’s to to it’s Obviously, this. holding were you why say didn’t -3 Nugent Nugent Nugent Nugent my dad might have lost 30 or 40 per cent of his income. He didn’t didn’t He income. his of cent per 40 30 or lost have dad might my REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | he government. he – a does and qualified is who someone do get If you cent. 95 per lose – them to expect it fair is good job, really 20? or up 16 give they Should ht. eig maybe and years up four give required? really it is and sacrifice, a long how it’s know, You Justice to offer tosomething country? the into life go political Mr. first elected, that was part of it, but as I said, as Justice Mr. know, that if you expect a term to last four years an terms, eight years – Mr. competition. I can MLA informed, better smarter, if have you effective be so won’t lobbies really not corporations see even can I politicians. equipped better in be to run and leave to deciding talent hired of their some liking t You get someone in there for three or four years, and they’re just they’re and years, or four three for there in someone get You in them You move working. is organization the how about learning three another and years, or four three for ideas. new are There submission. thoughtful a It’s saying. you’re implementational course, of them, with problems are There problems. Mr. Justice beneficial in order to have a history in that. So if you made it into into it made if So you that. in history a have to order in beneficial I towould four. terms goes of two limit term your maybe cabinet, that have you’d because simply that like something recommend experience, and suddenly eight year to. used it a shot to be improved. I mean, I put the main concept forward, forward, concept main the put I mean, I improved. be to shot a it I as Overall, details. the with is devil the and details, the all not you mandate, your listed you when statement, opening my in said really REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Published under the Authority of the Speaker of the Legislative Assembly of Alberta L276 | Appendices REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report M Transcripts from the February 2nd, 2012, public hearings in Calgary 277 | Appendices REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Legislative Assembly of Alberta MLA Compensation and Benefits Review Transcript of Public Meeting Honourable John C. (Jack) Major, CC, QC Calgary Thursday, February 2, 2012 1:02 p.m. Transcript 27-4-3 M278 | Appendices appendix 279 M t r Appendices | Appendices | May 2012 Repo the Departmentthe of Political Chestermere Legislatures Legislativeof Assembly Alberta Science, University of British Columbia Wildrose Caucus Simon Fraser UniversityFraser Simon Private Citizen Private Citizen Hay Group Hay of Head and Professor - Airdrie MLA, Speaker Former Author, Economics of Emeritus Professor Presenters Witnesses derson Oscar Fech Oscar Sorensen Marlene Dr. David Carter Dr. David Dr. Allan Tupper An Rob Herb King Dr. Docherty David Grubel Herbert Dr. REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-33 1:02 p.m. Thursday, February 2, 2012 They engage in various forms of public service, which causes Title: Thursday, February 2, 2012 ca1 sacrifice to their personal life and so on. There ought to be reason- [Justice Major in the chair] able remuneration for them, which is quite a broad statement, but in other words I think they do important work. Justice Major: Well, if everyone can find a place to sit, we’ll Just before I get to the heart of my analysis, which basically begin. Needless to say, we appreciate your being here, Dr. Tupper, says why Legislatures are important, I would put two pieces of and the other witnesses who will appear this afternoon and this context on the table. First of all, we undoubtedly live in an era of evening. detachment from democratic politics. The evidence of that is stark As you may know, my name is Jack Major, and I am throughout the advanced democracies of the world and very close conducting this independent review of the compensation and at hand. The turnout of the last general election in this province benefits provided to Members of the Legislative Assembly of was roughly 40 per cent, possibly a shade lower. This is a very, Alberta. very low level of engagement. Beyond that, there are those who As far as my personal background is concerned, I began are not merely indifferent. There’s considerable hostility to practice as a lawyer in Alberta in 1957. I was appointed to the democratic government and what it does and so on. This is really Alberta Court of Appeal in 1991 and to the Supreme Court of quite a stark contrast to public opinion and mindset for much of Canada in 1992. I was there until December of 2005. I have since the 20th century, particularly in this province, which under Social then served on the Alberta Securities Commission as an independ- Credit and through long periods of Conservative rule was broadly ent member. In May of 2006 I was appointed as commissioner to conduct the inquiry into the Air India flight 182. engaged in different ways in politics and certainly respectful of The task of this commission is to make recommendations to the those who pursued public life. I think, in other words, that there is Assembly regarding the compensation and benefits for members a particular contemporary context which won’t last, I don’t of the Legislature. In doing so, my review will encompass a believe, and I’ll speak to that point a little later. number of factors, including current members’ compensation, The other point that I think is very significant by way of benefit levels, and crossjurisdictional comparisons. premise for me, given that piece of context about public mindset, After consideration of a wide range of factors my report will be is that we live in an era where costs and benefits are assessed in submitted to the Speaker of the Assembly by April 1, 2012. The particular ways. It’s easy to come at a matter of complexity like report will be tabled and the recommendations publicly debated this one and sort of say: “Well, the costs are visible, X dollars. I and some conclusion come to. don’t really see the benefits.” But the benefits are likely As part of this review I sought input through a province-wide considerable. So you can easily identify some costs, but on the consultation process such as the public meetings we have here other hand there are benefits of considerable weight which are today. There has been some suggestion that the commission was hard to assess. How do you really quantify the impact of political not adequately advertised. It is a matter of record, but I’ll repeat it, equality as measured by a broad franchise of a capacity to that there were notices in eight of the major newspapers, and there communicate openly with government, of freedom of speech and were close to a hundred in the weekly papers. To name only a few, association, all of which are taken for granted in these calculations there’s the Airdrie City View, Beaumont News, Brooks, or discounted very severely? So the terms of debate are very Beaverlodge, Bonnyville, Bow Island. This will be marked as an loaded, particularly when combined with the public opinion exhibit, but it clearly shows that the commission was widely context that I mentioned. advertised. There was also a website posted, and there were 2,000 1:10 visits to it. So it’s clear, I think, that the public was aware, and they should still be aware that they can, if they’ve missed the On to the analysis. Why do we have Legislatures, what do they public hearings, file a written submission until February 24. do, and why are they important? It has proven impossible over the With that, Dr. Tupper, can you begin to enlighten us? If you last 200 years for people to continue to have self-government in have a paper, I would like a copy. Thank you. which they directly do their democratic work by themselves. In other words, we’ve come to a form of indirect democracy, or Dr. Allan Tupper, Professor and Head representative democracy, where we select others to do our public of the Department of Political Science business. Why do we do that? Pressures of the complexity of University of British Columbia issues, of the time involved, and there are just so many of us. It’s very difficult to apply Athenian principles and so on to modern Dr. Tupper: Thank you very much. I’m Allan Tupper, currently government given its complexity and difficulty, so we have to at the University of British Columbia and formerly a faculty select others to do so, and at the heart of that is an elected member at the University of Alberta for many years. I very much Legislature. appreciate the opportunity to contribute to this dialogue about Any analysis of democratic life suggests that an elected remuneration of MLAs. I think it entails a whole series of very Legislature is a necessary qualification. Without a freely elected important questions. Legislature through fair elections that are properly held and run, My brief makes no particular reference or comment let alone you would have a quasi-democracy, a sham democracy, not really recommendations on any precise level of remuneration or benefit a genuine democracy. So this is an institution that I think is really and so on. It’s more on the broad role of Legislative Assemblies in at the heart of the system of government that we live in and that democracies, what they do and why they are required. I state my we value or have generally valued until recently. premise clearly that I believe the evidence is very clear that Now, of course, representative government, where you delegate Legislative Assemblies matter. They matter a great deal, and they your franchise in some ways to someone else’s custody, raises all will matter more in the future rather than less. My position on that sorts of problems, which I think are well known. How do you matter is quite clear. By implication from that premise it’s quite control the delegates, and how much freedom do the delegates clear that Members of the Legislative Assemblies of Canada and have to speak for you? Actually, those have been discussed for other democracies are important. They perform important roles. 200 or 300 years in great detail and continue to be discussed. M280 | Appendices appendix 281 M t r focused focused - Appendices | Appendices | and those of of those and ll be various various ll be e particularly t may. es to that is to to is to that es February 2, 2012 2, February age inage different ways. May 2012 Repo y do important work. do important y s a way of defining what is is what defining of way a s y subtle and complex process process complex and subtle y al Legislatures. By some standards berta is historically the case. But you also have offs between them, but be that as i as that be but them, between -offs Calgary – aren’t in any way affiliated with the government, who who government, the with affiliated way any in aren’t engagement, but the Legislature will still be there as a there be still will but Legislature the engagement, - view Fourthly, public education. Legislators and parliamentary bodies bodies parliamentary and Legislators education. public Fourthly, doing constituency constituency in doing very are important Legislatures Finally, I’ll just make a couple of final comments. One is thatbelieve I The second reason, though, is that I think there’s just no doubt doubt no just there’s think I that is though, reason, second The and Legislatures of importance continuing a see will we think I it but try it I’ll of pointmaybe, fun the one for final make I’ll politics. It’s generally the case, but there are som Canadian things that actually exacerbate that trend. the other parliamentary democracies, and that is that there is too the in particularly government, the of hands the in power much universally almost is think this I leader. political the of hands counterpois easy few the of one think I noted. therefore beef up the Legislature. I won’t to speak that at any major the among unique not probably is Canada think I length. democracies of the world in having these very leader They attention. public to of consequence issues many bring that take don’t really I “Well, say, might People debate. stimulate seriously,”very but it’s a ver whereby things are debated in provincial Legislatures, they’re give they things, of learn people the media, through transmitted does certainly It forth. so on and so and back, communication a important be to continues and exist being and opinion public educating and country the on in going educated as well, because it isalways a multiple flow of influence on. so and parliament to government to citizen from work, and this is where MLAs and Members of Parliament really matter a great deal. They deal with large and small matters on their with contact in daily constituents. They’re of behalf their for things important and hard of sorts all do and constituents an of combination a They’re basis. continual a on constituents of officer communications and a officer, control a ombudsman, These not. or members opposition are they whether government, enough about think don’t we say I which functions impressive are particular Any about. lot a thought be to ought which and very it’s and them, of one any in improved be can Legislature difficult to maximize all four orfive different roles at once. They trade have to tend that in the future Legislatures will become more rather than less we all, of First that. for reasons two advance I and important, government Canadian in issue serious a think, I have, 1:20 is that on so and politics from detachment this had we’ve that there’ think I future. near the in altered be to going forms of re core mechanism for that re-engagement because it gives all sorts Legislatures when particularly participation, for opportunities of eng and things different do to recast are work who those that says basically which them, of revitalization a well be should them, to elected are who those is that them, in the because work their for remunerated anyway. Seriously, it goes like this. I think there’s a case that can be in made principle for somewhat larger Legislatures in Canada. I provinci the at look you mean, big. too obviously they’re Legislatures, or politics like don’t you if But if you take a different view, you can well make the case that in small quite are that oppositions have You small. bit a they’re many provinces; Al in used be could who backbenchers government of number good a the at get really can you way only The on. so and ways different control of government is to have an active Legislature with a lot of who people independent. are words other in - A The andit a was – and I’ll be very through a broad broad a through blies do lot in a that a very distinguished MLA Compensation and Benefits Re Benefits and Compensation MLA there are many examples ne in a more specialized argues thatthey are akin to a and and eminent provincial institution in in institution provincial -eminent country like Canada, which has a Smith, David by he People’s House of Commons of House People’s he engaged in legislation. They speak to the quality quality the to speak They legislation. in engaged the input of a Legislative Assembly, which speaks to the the to speaks which Assembly, Legislative a of input the -34 s feedback to the national body that gets us into this. into us gets that body national the to s feedback So we’ve had representation and then, secondly, legislation. legislation. secondly, then, and representation had we’ve So The second thing that Legislatures do is that by their very very their by that do is Legislatures that thing second The – Legislatures sometimes think I A second very important and related role to representation is the the is representation to role related and important very second A But what does a Legislature do? So much of this is almost almost is this of much So do? a Legislature does what But In a very interesting, recent book about the Canadian House of of House Canadian the about book recent interesting, very a In REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | in this case, notably the Congress of the United States, which is is which United States, the of Congress the notably case, in this That made. is point broad the but bodies, our from different very parliamentary do many as committees, through primarily works do is legislation and their assemblies, way, where smaller groups of Legislatures via committees study work. important considerably do often and detail more in things Legislative a that bt dou no there’s mean, I control. is Thirdly Assembly, whatever its flaws in a particular context, is very ways. two in so does It governments. in controlling significant to is role its organized, however opposition: the all, of First or visions through is, that alternatives; and options provide Assemblies Legislative of role the equally But policies. particular and misconduct government of public the to evidence give to is to There’s public attention. those bring to maladministration, considerable evidence that Legislative Assem respect. careful when I try and explain this – this explain and try I when careful of Canadian diversity the that. Given of heart the at right is MLA function. important very very, a it’s communities they’re definition activities the all major virtually regulations, and laws, all major of on. so and them, improve them, amend they and government, of This is a very consequential part of the legislative role because without public interest, thatprocess is a thatbe can heavily dominated by considerable is There on. so and groups interest established legislation. to alter capacity modern franchise in the commercial world in that the national national the that in world commercial the in franchise modern party or the provincialparty establishes thebrand, call as we it, the but organization, the of characteristics broad the out sets franchisee, in this case thelocal and MLA constituency association, tailors that message to the local constituency and give deliberately selected title – title selected deliberately core the of Saskatchewan, University the at scientist political really you when Commons, of House Canadian the that was thesis institution national and genuine distinctive most the is it, probe whichgenuinely represents all Canadians provinces all through languages, official both across franchise, and territories, et cetera. A very powerful analysis flowed from no is It people. a as us represents that body a is this So that. e Legislature Th in many Alberta. of province the within different pre the is opinion, in my ways, Commons. of House the as sense same the capacity and structure of Canadian Legislatures to intermediate politics, Canadian local. the and national or provincial the between complex a very been always has federal, and provincial both balance between certain national imperatives and the counter vailing imperatives of local and regional pressures, and the ML or Member of Parliament is really theessence of that. One – parties political Canadian of interpretation affluent an in so omnipresent, MLA democratic government of a mature nature, people take it for all, of First it. of essence the through run just me let But granted. members of the Legislature andthe broad Legislature represent representation, call is we ction what fun core Its opinion. public one. significant very a is this that think I and T called Commons REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-35 Somewhat larger Legislatures almost by definition have more I have also taken advantage of what comes along with teaching independent members who are more willing to challenge the at an English-speaking university. I have held teaching positions government or their own opposition party, who are more willing or research positions at the U.S. Treasury. I have spent time to be nonpartisan, and so on. I won’t push that at any length. I teaching at the University of Cape Town, the University of think this idea of compressing Legislatures and saying that we Nairobi, University of Oxford, the University of Singapore, and don’t need them is not going to get you anywhere. In fact, many of the University of Berlin. I’ve seen a lot of the world. the people who like that idea actually get themselves into something very self-defeating. Justice Major: I think we’ve qualified you. You don’t want to A small Legislature is by definition in Canada heavily domi- use your 25 minutes on qualifications. nated by the government. If you don’t like governments that Dr. Grubel: Okay, sir. I come from the tradition in economics legislate and tax and those kinds of things, you probably don’t which says that if it’s something important, an important policy want a small Legislature because that’s the only place you’ll get decision that has to be made, we should have numbers to back up one. If you don’t have a powerful, activated Legislature, you’ll our arguments. If it’s important, measure it. I followed this have no checks on the government. If you fear or dislike principle in the presentation of the paper that will be available on government, you’ve got a government that will do as it sees fit. the Internet. But there is one big problem; namely, that there are Anyway, thank you very much for your patience. In conclusion, infinite sources of numbers that one can use to produce support for I think Legislatures are important. I think the people who work in any argument one wishes to make. Therefore, it is important to them do important and significant work for society. We’ve come have a theory which guides the selection of the numbers which to take those things for granted, and I think this is a timely one wants to adduce in order to support an argument. opportunity to refocus on some of the larger questions. Now, in the case of the proper compensation for MLAs there Thank you very much. are two polar ways in which one can decide what it should be. Justice Major: Dr. Tupper, we will file your submission. It will One of them, advocated by some people, involves listing the go on the web. Could you briefly run through your CV? You were amount of work that they do by taking account of how many hours rather crisp when you started. per week they work, how many hours they spend travelling or consulting with constituents, or how many people work for them Dr. Tupper: I’ll be brief on this matter. I was a faculty member at on the same budget, how big their budget is, and so on. To make a the University of Alberta for almost 30 years, and I’ve been at the long story short, there is really no way in which one can quantify University of British Columbia as a political scientist for another the many intangibles that members of the Legislature produce. decade. While in Alberta I chaired a comparable body to this one I should have mentioned that in that sense my own personal on the state of the Conflicts of Interest Act, and I participated also, background qualifies me to talk about this because I served for oh, five years ago now on a review of the agencies, boards, and four years as a Member of Parliament for the Reform Party, 1993 commissions of the province under the chairmanship of Neil to ’97, in Ottawa under Preston Manning, and I served two years McCrank, who was a distinguished public servant prior to of that as the Finance critic. So I know that in the private sector undertaking that. I’ve been engaged in the study of provincial and there is really no group that can be compared in terms of pay national politics throughout my career, and I’ve written on those scales with that of the members of Assemblies or with the federal subjects. Parliament. The clinching point, really, is that no Legislature that I know of in Canada determines its pay for its members on the basis Justice Major: That’s sufficient. Thank you. of comparisons of income of competing groups in the private I hope your plane treats you better going back than it did sector. coming down. However, I have an alternative theory. I believe that in a democracy we have a process which leads in the end to a pay Dr. Tupper: That’s the way of the world. which attracts people of quality and, therefore, a quality of legislative output that the public demands. The process that I’d Justice Major: This is exhibit 14. like to sketch briefly is that we have two opposing forces. On the Thank you, Dr. Tupper. one hand, you have the members in the Legislature that form the Dr. Tupper: You’re very welcome. government. They have a strong tendency, self-serving as some cynics might say, to increase pay because they are so full of Justice Major: Dr. Grubel. themselves that they always say: well, you know, I’m working so hard and I do so much good for society that I need more. So they Dr. Herbert Grubel, Professor Emeritus of Economics try to raise their pay all the time. Simon Fraser University 1:30 Dr. Grubel: My name is Herbert Grubel. I am a professor of The other side you have in a democracy, like we did in the economics, emeritus, at Simon Fraser University, and I’m a senior Reform Party, is that they run on the platform that: you guys have fellow at the Fraser Institute. I am most honoured and pleased to gotten out of line; you are paying yourselves too much. We see work for Justice Major on this important inquiry. He asked me to this in Alberta with the Wildrose Party. In fact, their insistence present you with brief biographical information about my that something be investigated is the reason we’re all here. We background. I was born and raised in Germany. I received a PhD also have think tanks which produce hard numbers to show from Yale University in 1963. I taught at Stanford University, the whether or not Legislature salaries have gone out of line. University of Chicago, and the University of Pennsylvania. In Therefore, I conclude from examining this dynamic process that 1972 I took up a position at Simon Fraser University because I over the many election cycles in the provinces and the federal found the prospect of spending the rest of my life in Philadelphia government we have reached a level of pay which reflects a desire not a very happy one. of the public to have and attract from the private sector people of a M282 | Appendices appendix 283 M t - - r of and udying udying ed their Appendices | Appendices | February 2, 2012 2, February ike me. Afterike me. my umbers involved, involved, umbers alculated the total total the alculated tle bit lower. The two The lower. bit tle n allowances? Well, in free allowances,free properly May 2012 Repo - erring to?erring -free allowances. Soisn’t it the benefits which these people get was estimate the amount of subsidy that that subsidy of amount the estimate was – dividual MLA. dividual half of that is paid by the government; the other other the government; the by paid is that of -half What page are you ref Calgary : – Page 9. : view Major hat they have done is taken that amount that is contributed by by contributed is that amount that taken is done have they hat Grubel W That is only about 10 per cent of the $90,000, roughly, that they they that roughly, $90,000, the of cent per 10 about only is That tax plus salary the together put I That’s the first thing: what is the value? What they did the they – is thing: value? the What what first That’s But here comes the kicker, the thing that has caught the the caught has that thing the kicker, the comes here But All of the provinces have transition allowances. The case for the transitio those did how calculate I Now, adjusted for taxes, and the fringe benefits and c and benefits fringe the and taxes, for adjusted annual compensation, andhere we can see a remarkable similarity which provinces, with of western the paid all by in levels the Saskatche higher. slightly is B.C. compared. be should Alberta wan is the same as Alberta. Manitoba is a lit are compensation annual total highest the and provinces big Alberta. than more year a $20,000 almost Quebec, and Ontario the government provides in the provision, say, of life insurance. insurance. life of say, provision, the in provides government the a get to $500 be would annually premium insurance life the Say themselves MLAs cases most In benefit. death $100,000 As that. buy to necessary that’s $500 the of part some contribute maximum the to equal are Alberta in pensions the know, you Revenue by Ottawa in set as RRSP the to contribution allowable one Only Canada. in the paid is by half the government and said that that is part of the compensation compensation the of part is that that said and government the which table a produced I’ve MLA. individual the by received level highest the has Quebec account on that that shows and second, is P.E.I. Interestingly, benefits. fringe plus pensions interesting very also is provide is I table third. But this Alberta because you can see that the total amount in Alberta is about $12,000. $11,000, Justice Dr. receive in Alberta in plus salary tax really as big an element of compensation as it is out made to be on focuses public the when when they retire. Even these if calculationsnot are absolutely correct, it doesn’t much make of a problem. important very is that all cases in all provinces they are dependent on the level of pay, have you that else and everything benefits fringe including inciden including, serving, while period certain a during received 1:40 attention of all the media because of the large n Transition allowances. transition -called so involves it and allowances are paid to MLAs because when they fail to be re- getting problems lot of a have typically they quit, orthey elected reintegrated into the private sector. Even people l at professorship to my back got I when Ottawa in years four to somebody to away it given had they University, Fraser Simon stole They 15 years. for teaching been had I that courses the teach st students graduate no more had I me. from them in undergraduates more no had I finance. and trade international stuck I was and else, to somebody away given It was field. that So it is teaching. until retired Mouse I courses Mickey with fe to people for available resources some have to important job. new a for looking they’re while families The good. very It’s high. very is allowances transition of existence you If thumb. sore a like out stands Alberta that is problem big transition the that see can you presentation, my of 12 page at look $80,000 about is -highest second the and $200,000, is allowance around somewhere to there from down go they Then Ontario. for rest. the for $50,000 - free free - ion that that ion nally in order to to in order nally but I don’t have the the have don’t I but MLA Compensation and Benefits Re Benefits and Compensation MLA free allowances.-free free allowancefree as inflated, - -called fringe benefits that are paid in the in a moment that is very, very difficult to difficult very very, is that moment a in free allowance, having been inflated to - stimate. Let me just tell you that if somebody somebody if that just tell Let you stimate. me elf right in the middle of the pack. Ontario is by is Ontario pack. the of middle right in the elf say they should be paid like lawyers or doctors or or doctors or lawyers like paid be should they say at produces the output that they wish to have. I don’t don’t I have. to wish they that output the produces at r to estimate the value of providing this, the study that that study the this, of providing value the estimate to r -free allowances. These paid were origi -36 s why I rejecteds why the first model. I believe that it relevant is for the benefits provided. If you just think about health care, dental dental care, health about think just you If provided. benefits the Of course, as you all know, this is highly misleading because because misleading highly is this know, all you as course, Of Let me tell you now what has been the result of my attempt to to attempt my of result the been has what now tell you me Let Now, pensions and fringe benefits represent a very, very very very, a represent benefits fringe and pensions Now, In orde In If If we include a tax I have been supplied through Mr. Major information collected collected information Major Mr. through supplied been have I REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | private sector, in each case it depends on whether you include you So ldren? chi have you or do family, single it just a Is family. following my of all and this, about assumptions make to have done have people these that assumption on the based is analysis done. be can that job possible best the has been done for the Nova Scotia Legislature has been extremely what into economists and actuaries of bunch a put They valuable. value the estimate to job difficult tremendously a been have must of care, and various other so MLAs are being paid. There’s the basic salary, there are tax allowances, there are pensions, there are other fringe benefits, and then there are transition allowances. These are all outlinedin my exceptem th of to that, say on any dwell to want don’t I and paper, on Legislatures provincial the of all compare you if one, number the basis of salary, Alberta, with of a pay $60,000 is a year, by far by received $120,000 the as as much half almost It’s lowest. the be should Alberta which to ces, provin western other The Ontario. pack. the of middle the in right are compared, - so pay still which provinces two only the are Quebec and Alberta called tax quantify; namely, the amount of money that the government pays pays government the that money of amount the namely, quantify; benefits. fringe and pensions for compensat of forms various the compare and assemble to e problem difficult gets as a fringe benefit a $100,000 death benefit, the value of that that of value the benefit, death $100,000 a benefit a fringe as gets other various and health, his individual, the of age the on depends criteria that life insurance companies take into consideration. time to elaborate on this. on to elaborate time quality th quality decided we tomorrow if that understand to difficult too is it think or what wage minimum the only paid MLAs have to wanted we we that people of quality the get not would we paid, are janitors get if we professors or junior executives or senior executives. Clearly, the pay, the but of essentially it is increasing an function is quality and with, this compare you occupations these of which arbitrary that’ other the of all in happening is what at look and together get to us done. have I what is this and provinces, other and pay on the Legislature Alberta the of Clerk the by provincial other the of all and Alberta in MLAs of allowances Legislatures. I’ve also been very privileged tohave a report prepared for the Nova Scotia Legislative Assembly, which did to get I’ll that something necessarily don’t you which expenses for legislators compensate from and to travel namely, occupation; other any in encounter all justified I’ve on. so and constituents after look to homes their paper, in my history this given and this of and pay, to have MLAs the that taxes of amount the for account take a sum of the salary plus tax the its finds Alberta and Newfoundland B.C., Quebec, by followed highest, the far Labrador, Saskatchewan, Alberta, Nova Scotia, Manitoba, and there but rate, low very a with outlier an P.E.I. is Brunswick. New t, so little judgmen difference, my in especiallyis, among medium MLA sized provinces, to say that we are not overpaying the legislators legislators the overpaying not are we that say to provinces, sized tax plus salary of basis the on Alberta in REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-37 tally, the extra pay you get serving as an officer of parliament: which shows that for ministers serving eight years the present value minister, Premier, or whatever. What I have done here is for is the third highest. It’s very interesting, taking into account these comparison. I looked at what the level of transition allowance is for differences in the provinces, that the ranking has changed. Quebec, a fictitious MLA who has served for eight years but did not serve as our French-speaking friends, still has by far the highest total level an officer in parliament, and that is the number you can see on page of compensation for people who serve as ministers for eight years, 12, which makes it two and a half times that of Ontario that is given but the second highest is Nova Scotia. Presumably, that’s why to Alberta MLAs. they were required to make that inquiry, which gave me the data that I have used in my calculations. Alberta on that scale is third, Justice Major: The transition allowance is based on the number of just a little bit ahead of Ontario, but it is considerably higher for years served? ministers than any of the other western provinces. Dr. Grubel: The number of years and the three months of the 1:50 highest pay. This is eight years multiplied by those numbers, but it’s Well, based on these calculations, I make two recommen- done for all of the MLAs. dations. The first one, fairly easy, is that for the sake of Now, you have to understand that when we want to talk about the transparency Alberta should stop being the only non French- total compensation, we should put together all forms of speaking Legislature that still gives tax-free allowances. I know compensation: salary, fringe benefits, tax-free allowances, and all that some people believe that this is costly for Alberta. I calculated this. It’s not easy to do, but there is one analytical method which that it would roughly cost in taxes going to Ottawa somewhere makes it possible, and that is to take the present value that is the between $600,000 and a million dollars a year for the 82 or 83 time-adjusted value of all the pay which goes into the pocket of an people who are serving as MLAs in Alberta. MLA when he starts, when he gets elected. Under my assumption I cannot give you any objective criterion for deciding whether a he serves for eight years, he is not an officer, and he can get eight million dollars or $600,000 going to Ottawa is worth removing annual salaries plus fringe benefits, et cetera. But salaries also have from public debate and the attention of the media and all the storm to be discounted to get a present value. and heat that they create, the lack of transparency that is inherent Then I discount the present value of the $120,000 that the MLA in all tax-free allowances. It is obvious that outside of Quebec all could get as a transition allowance, also discounted for eight years at the other provinces have decided it’s worth it to do so. Therefore, 4 per cent, all of them at the same rate. When you do that, you come my recommendation is that Alberta should follow the rest of up with the numbers, the bottom line, that I present on page 14. Canada and translate the tax-free allowances into taxable income There we can see that if you get yourself elected and expect to work properly inflated so that the pay is comparable, which, as you see for eight years as an MLA in Alberta, you get a total salary plus all from my data, would make it comparable to all the western the other forms of compensation worth $800,000. The absolute provinces. number doesn’t really mean anything in the context of what I defended as a theory of what should be the right level. We should Justice Major: Dr. Grubel, if the tax-free allowance was more compare it with all the other provinces. There you will see in my descriptive of what it really is, that it’s a contribution by the calculation that Ontario and Quebec both get a present value of federal government, in a manner of speaking, to the MLAs in the $100,000 more than Alberta. province – would the average Albertan prefer to be sending money to Ottawa over receiving the benefit from Ottawa? Justice Major: Over the eight years? Dr. Grubel: Mr. Major, you have a wonderful way of putting this, Dr. Grubel: Over the eight years plus the transition allowance, but and when I listen to you, I am convinced. But politics as I’ve it is considerably higher than that of the other provinces. The known – and one reason why I didn’t run again in 1997 was that average for the other western provinces – Saskatchewan, Manitoba, there is too much sizzle, too much attention by the public to and B.C. – is $681,000. Therefore, the MLAs for Alberta are getting appearances; never mind about the steak. You know, that’s what I $122,000 more as a present value of anticipated compensation while was interested in as an economist. What are the real ideas? How they serve in office. could we improve the welfare of Canadians? Well, the research Now, the amount of extra money paid to people who serve as department in the Reform Party had one or two people, but they ministers or as Premiers or as committee chairmen and so on: the hired 15 people to give it youth sizzle. It’s very important, but on information on that is all available, but I don’t want anybody to be the other hand the sizzle has to appeal to the media and to the overwhelmed by numbers by me producing what is the present public. value of compensation for various other sets of assumptions. If we change it and become like all the other people, how much However, I made one of them in which I assume – and the number attention do you think you would get from a press release saying, is given both by the Nova Scotia people and by the basic “MLAs in Alberta paying this money to Ottawa, a million dollars information from the clerk – someone serves for eight years but also a year”? How much attention do you think you would get from the serves as a minister. I present under these assumptions, eight years media and from the public? You could never reach the number of as minister, again the same information as I presented earlier. It people who are upset about the fact: “These guys are taking home turns out that Alberta, just as an interest, if you work as a minister, money, $20,000 a year or more, and I have to pay taxes on it, and has almost the same level of extra compensation, about $62,000, as they don’t.” Quebec and is higher by almost $10,000 than all the other smaller It isn’t worth the hassle. For $1 million, which is probably equal provinces. to one hour of revenue of the government of Alberta and certainly The bottom line. Because we’re running out of time, I won’t be within the measurement error, get rid of it. It’s a million dollars. going through comparisons with fringe benefits, transition Also remember that some of it will come back to Alberta through allowances, and all that, but go to the table on page 17, chart 11, the services that the government provides. I accept the logic of M284 | Appendices appendix 285 M t , t - - - s r a ous ous Appendices | Appendices | e and talk February 2, 2012 2, February book series of a democratic May 2012 Repo - day lives of Canadians. - to I suspect it will become of part thea become it suspect I will - ou very much. ou very but will enunciate I principl each For the record, Dr. Docherty, could you just just you could Docherty, Dr. record, the For It’s a good place to end and to begin. to and end to place good a It’s Calgary Okay. I have a PhD in political science. My first First of First I that I’d to not like all, say am here in my Thank y Thank Of political science, yes. : : – : : : : for influence in policy, those types of things. of types those policy, in influence for , which was part of an eight ancial price topay for democratic representation. Legislatures view ood men and women to office, we have to recognize that that recognize to have we office, to women and ood men Major Major Mr. Smith Goes to Ottawa: Life in the House of Commons of House the in Life Ottawa: to Goes Smith Mr. Docherty Docherty Docherty Docherty . David Docherty My publications before I became a dean and a president focused focused president a and dean a became I before publications My I applaud the work you’re doing, but my first principle when when principle first my but doing, you’re work the applaud I I would just say that when we look at the size of size Legislature the that look at when we just say would I be must salaries that is argue, would I principle, second The I have eight principles. I will try to as as be possible. quick I will I principles. eight have I on the House of Commons. My second book was was book second My Commons. of House on the focused it and Legislatures on matters of Legislatures, legislative careers. I’ve written numer I am while that say I would et cetera. articles, journal chapters, book an atheist when it comes to how we elect our members, I’m an evangelical when itcomes to the role our members of Legislative day the in play Assemblies Justice audit of Canada. I looked at the provincial and the federal the and federal provincial at the looked I Canada. of audit professionalization, of levels like things at looked and Legislatures opportunities 2:00 Dr. and on surveys based was It dissertation. on my based was book was It 1997. 1993 to from Parliament of Members with interviews called Dr. recognize to have we that is members for compensation at looking - represen modern of principle foundational the is democracy that is nor free, not is democracy But transparent. be must it and tation, members’ reducing at looking be not should we and cheap, it a be not should money Saving money. saving of a as way salaries driver, therefore, in establishing levels. salary On extremes. two of one to go can we pay members, we how and one extreme we could elect one person to governof all Alberta for 3.7 all allow could we hand other the On years. five or four tha recognize We issue. single on every vote to Albertans million hardly is One possibilities. with fraught are those of both democratic; the other is ridden with chaos. We agree that we’re somewhere in the middle, and agreeing somewherewe’re between full have individuals these that agree also we million, 3.7 and one first my So such. as compensated be to have and jobs time your making you’re when encourage would I that principle deliberations is recognize that we that democracy comes at a cost that understand must we think I paying. worth cost a it’s and there’s a fin regarded as part of a larger recruitment and retention strategy for to want If we pay for. you what get you put, Simply legislators. attract g Author, Dr Dr. Dr. present role as president of Mount Royal University but as a a as but University Royal Mount of president as role present and political Legislatures studied has who scientist political careers across the country and whose research has been onParli your for much very you thank I Assemblies. provincial and ment time. – not brief the read will – dialogue ongoing very briefly about it. Then if you have any questions, commis questions, any have you if Then it. about briefly very sioner, I would be happy to respond to them. to respond to happy be would I sioner, Justice briefly give us a quick rundown of your CV? your of rundown quick a us give briefly on. on. bit 15. Of Of 15. bit but on the other side side other the on but MLA Compensation and Benefits Re Benefits and Compensation MLA how much we can squeeze kes. I could do it if pushed. By By pushed. if it do could I kes. e transition allowance formula is Thank you. Your paper will be exhi be will paper Your you. Thank formula as such that when you make a simulation simulation a make you when that such as formula existing regulations – regulations existing You’re up. You’re You just have the one copy of your submission? your of copy one the have just You Okay. That will be the next exhibit, Dr. Docherty. Dr. exhibit, next the be That will Okay. We’re going to move into the twilight zone? twilight the into to move going We’re Thank you very much. I’m happy to be here. As a As here. be to happy I’m much. very you Thank Yes, I have. I upAm next? No, I have one I can hand to you if you would like. would you if you to hand can I one have I No, There is another copy for yourself. for copy another is There : : : : : : : : : t show so clearly how Alberta is out of line line out is of with how so clearly Alberta t show Major Major Major Major Major -38 Docherty Docherty Docherty Docherty Thank you. Thank This is an issue, again, where the extent to which we impose impose we which to extent the where again, issue, an is This Therefore, I suggest that this be left to a committee of the House House the of committee to a this left that be suggest I Therefore, policy government in all important think it is I Secondly, Now, the other thing is the level of compensation. My data data My compensation. of level the is thing other the Now, I see you’ve it,made Dr. Docherty. REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Justice them is essentially, again, a political judgment and, I think, should and, think, I should judgment political a again, is essentially, them am I themselves. legislators the of lap the into put properly be I that numbers embarrassing the see they once that confident tha produced this irritant to remove eager be will they allowances, transition of rest the with line in get and packages compensation their from country. the your argument, and you’re absolutely correct. The feds are are feds The correct. absolutely you’re and argument, your rejecting, are we which subsidy a providing of the sort that I have made here, calculating the present value, other western the of that with in line completely be will Alberta provinces, take a few thousand dollars here and there that are measurement errors? their rearrange to have don’t they that be fair to try should We planning. financial own their and thinking own serve to Edmonton to coming been have who people on hardships of basis on the MLA the of elements what and reduce, to have you would much how line in Alberta get to order in change to have you would formula country, the of rest the and provinces western the of rest the with so much are which Ontario, or ec Queb than other sense, some in bigger? political introduces and expertise the has which Assembly the of proviso the Where’s looks. it how and sizzle the about judgment the set they that one from transition of cost the account into take we that changes come have who people to fair be to want We other. the to regime so and amount certain a promised being Legislature the into is the public opinion, which we try to persuade. To remove this this remove To persuade. to try we which opinion, public the is dollars million a worth be would think, I forever, debate the from a year. th that indisputably clearly, show in MLAs for provide they money of amount the in generous too the that suggest I Therefore, provinces. other the all to relation an through running in expert an not am I adjusted. be formula Excelspreadsheet and what it ta course, as everyone knows, that will also go on the web. the on go also will that knows, everyone as course, Dr. Justice Dr. Dr. ’s always fun to follow an economist whose whose economist an follow to fun always it’s scientist political the yeah, says: scientist apolitical whereas indisputably show data depends. answer Justice Dr. Justice Justice REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-39 there’s a cost for that. There have been moves in some jurisdictions life. If you step out of, for example, a law firm and you serve for at various levels to compensate people and substantially reduce the 10 years, your clients don’t just wait until you come back and then cost of legislation, the cost we pay representatives. In one particular once again retain you as a lawyer. You lose those clients, and you case it was a move to reduce the cost of public school officials to have to rebuild your practice. If you’re a contractor, it takes you a about $5,000 per annum. My argument is that you get two groups of while to build up that business again. All of those types of things. people at that stage interested in the job, those for which $5,000 The opportunity cost of serving is such that I think we have to means absolutely nothing and those for which $5,000 means a heck recognize that despite the public reaction to the size of pensions, of a lot. Neither one of those groups is truly representative of all the the pension equation for elected life is very different than it is for parents and all the students and all the teachers and broader society. most other careers. Very few people have a 50- or 40- or 20- or I would say the same would hold true for legislators. If we want 15-year career in office. Canadian turnover rates are very, very good individuals, we have to be willing to pay for them. high. As a result, we have to make sure that that is recognized. Obviously, we don’t have access to tax records of those I would recommend that in terms of transition allowances – I individuals who run for office and serve in office, but my own work agree with Professor Grubel that the size of the transition has indicated that if you compare us to the United States, you find allowance here has caused some controversy. I think it’s wrong to an interesting comparison. In the United States when people run for compare it necessarily to the private sector because if we were office, typically they take a salary cut when they enter, but they take about to do that in terms of the length of it or the size, we’d have a huge salary increase when they leave. In the Canadian context to make that full comparison to private-sector salaries, which are many members take a salary cut when they enter office – federal or very, very different than members’ salaries. provincial and particularly in this case provincially, Alberta – and Having said that, I would think a maximum of the equivalent of they take yet a further cut when they leave. one year’s salary would make a good maximum for a transition If we hold the transition allowance in abeyance for a moment – allowance. I think that that’s in keeping with most other standard forget the transition allowance – it is very difficult to recoup that practices, and given the size of salaries that’s probably something type of money. They take two salary cuts, one when they enter and that I would strongly recommend. one when they leave. What does that tell us? Well, it tells us that I would argue and I agree that members of cabinet in Alberta these individuals are driven to enter office for things other than are compensated at a level that’s much higher than, say, Ontario finances, but it also indicates that if we do want to increasingly and most other jurisdictions save Quebec and federally. We also attract good people to serve in office, we have to make sure that have to remember that the job of a minister of the Crown is very, financial sacrifice isn’t so great that we’re turning them off before very different. They have responsibilities and duties in addition to they begin. So I think that’s something we should keep in mind. those of private members. The third principle, I would argue, is that the Alberta Legislature It’s an odd one. It’s an odd one because on one hand you will is a full-time, professional representative Assembly and, thus, have a member of cabinet who oversees a large, effectively requires full-time, professional legislators. Gone are the days when multimillion-dollar corporation that if she or he were doing this in individuals had surgeries in their kitchen on Saturday mornings. the private sector would be compensated probably at five, six, Alberta legislators represent approximately 45,000 Albertans. It’s a seven times the rate that they’re compensated for public service. full-time job. Government is big. Government is complex. It’s not At the same time they’re also compensated at a rate in many cases the 1970s. Beginning in the ’70s provincial bodies began to grow, less than those individuals they’re responsible for. The minister of sit longer, deal with more legislation, and governments grew larger; health makes less than many doctors and many CEOs of hospitals. therefore, the responsibility of MLAs increased substantially. For The minister of advanced education makes less than some cabinet ministers it meant their job was busier because they oversaw professors and many senior administrators at universities. more bureaucracy; they oversaw more programs. Having said that, however, we also have to recognize that the Quite frankly, for private members both in government and job requirements are different. You don’t necessarily become a opposition their important responsibilities in representation and hospital administrator without going through a rather rigorous scrutiny and oversight and legislation became far more important education program, you don’t become a doctor without going to and full-time, and we have to recognize this. It is a love for many medical school, and chances are you don’t become a senior individuals, but this is not a part-time vocation. This is a full-time professor or a senior administrator of a university without having career. a PhD. None of those are requirements to be a minister of health Principles 4 and 5. I would argue that the often volatile career or a minister of advanced education. The list could go on with longevity of elected officials requires that transition packages must various other ministries. As a result, the direct comparison be considered part of the compensation package and that pensions shouldn’t necessarily be to those individuals whom the minister must be reasonable and must also recognize the opportunity cost of oversees. elected service. I’ll talk about the pension issue very quickly. At the same time we do have to recognize that salaries, the I don’t have hard and fast numbers for recommendations on these additional salaries for cabinet ministers, should be fairly high. I issues, but I would argue that when we have individuals who step think that Alberta actually gets it closer to being right than just into life – remember that most individuals in political careers don’t about every other jurisdiction. So I would recommend that in the begin their career at age 24, after graduating from college or case of cabinet ministers we maintain the present salary levels, university, and stay there until age 65. If they did, the pension issue and when salaries are changed or increased, they are changed in would be a very different type of equation. It would be a very accordance so that the salaries for cabinet ministers are changed at different issue, and it would be much more in keeping with other the same rate. public service pensions or even the private-sector pensions. 2:10 The fact of the matter is that we have a number of individuals Principle 7, salaries and allowances must be transparent. who are leaving their professions to sit in office for an unspecified Changes to the salary structure may require substantially higher period of time. As a result, for many of those individuals they salaries. I will go into the same argument that the previous speaker never recoup that money after eight or 10 years serving in public did. I appreciate your comments, but I think that we do have to M286 | Appendices appendix 287 M t r Appendices | Appendices | that is the is that Assembly of February 2, 2012 2, February May 2012 Repo ovincial Legislatures actually Legislatures ovincial egislative Assembly. That would would That Assembly. egislative . that I think we should double the the double should we think I that . . Dr. Grubel, maybe you and Dr. Docherty could could Docherty Dr. and you maybe Grubel, Dr. th that. I have said publicly publicly said have I that. th wi am familiar I I’ve been told that under the British parliamentary parliamentary British the under that told been I’ve Go ahead. I’ll take that into consideration. into that take I’ll Thank you. Thank Calgary I couldn’t answer that question more recently. I recently. more question that answer I couldn’t Take this offline? Take : : : : : . – : : : How many of the pr the of many How . or individuals to see themselves having a legislative a having themselves or individuals to see Is it permissible to ask questions? to ask it permissible Is I never was paid get to the capital, it’s used to compensate for those those for compensate to used it’s capital, the to get . : : : view Major Major Major Major Major books of whomever the Premier of the day is, then then is, day the of Premier the whomever of books ze it is, if you are elected to the government, you think that that think you government, the to elected are you if is, it ze Docherty Grubel Grubel Docherty Grubel Docherty I would argue that with the Legislative Assembly in Alberta at in Alberta Assembly Legislative the with that argue would I been have that works good life’s your that say dare I But Thank you, Dr. Docherty. I know you had a hard time getting getting time hard a had you know I Docherty. Dr. you, Thank Thank you very much. very you Thank committee system and the committee structure is important, and important, and is structure and committee system the committee duty. their of part as that see ld shou members Justice system, where they have over 500 members, the path to success is is success to path the 500 members, over have they where system, that? with familiar you Are committees. on do you work the Dr. beauty, perhaps, of being in a protected university environment; I environment; university protected a in being of perhaps, beauty, can say such heretical ideas – size of the House, the AlbertaL I But entirely. that understand I package. compensation the change progress to path their see members that reasons the of one think is Commons of House British the in system committee the through that they that when know they are elected, them not of all if most have small a very chance of serving in cabinet. a result, As they tohavetheir make mark elsewhere,andthey their make mark as parliamentarians. the si party Thus, cabinet. in being of chance good very a have you a only it’s that think You stronger. much becomes discipline the in I stay as long as cabinet: in you’re before time of matter good there’s result, a As in cabinet. turn to serve my get I’ll eventually the on function scrutiny important that play to incentive less government backbenches. I think any move that increases the f opportunity pursue. should we something is career you if sullied be may country the throughout recognized recommended doubling the size of the Legislative in this report. Alberta Justice here. Dr. Justice elsewhere and I will say publicly on the record – record on the publicly say I will and elsewhere Dr. pay per diems? per pay Dr. Justice purposes. Dr. know that Alberta has been in the minority. You know, when I when know, You minority. the in been has Alberta that know of kind a on it at looking stopped I administration, into went Many question. that answer to able be ldn’t I so wou basis, regular when versus sitting isn’t House the when diems per different have in that is some there argument The sitting. is Legislature the for while a takes it and not is sitting Legislature the if jurisdictions members to Justice discuss this Dr. ublic rily useful that s who are serving serving are who s MLA Compensation and Benefits Re Benefits and Compensation MLA committee chair as being -freeallowance. Thep and this is a bit of a soapbox for myself myself for soapbox of a bit a is this and something in terms of the remuneration. I remuneration. the of terms in something ms of compensation. If you look at Ontario, if you you if Ontario, at look you If compensation. of ms What about the members of the committee? If you committee? the of the members about What What troubles isme sense my that members are serve on committees not because it’s important but but important it’s because not on committees serve : -free allowance. -free allowance and get rid of it and realize that to get : d that, I do believe in a certain level of financial my finalmy – principle Major -40 Docherty As you’re aware, Justice Major, the difference between without without between difference the Major, Justice aware, you’re As Having sai types any answer to happy I’m principles. of the kind are Those Then Then One of my recommendations at the end of the day is that, quite quite is that, day the of end the at recommendations of my One is that salaries and allowances should not be used to compensate compensate to used be not should allowances and salaries that is REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | – think I in Alberta. substantial is fairly portfolio a with and portfolio - $63,000 to $28,000 it’s individual to pay opportunity the that argue would as chair strong committee in such might capacity a in Legislature the actually make a legislative career more attractive. It might entice a as a career out seek to Assembly the Legislative of Members committee chair, to see the role of a process. democratic the to adding and viable being as important, look at the tax the at look rid of it, we are actually going to have to change the salary structure to compensate for the fact that it is a tax I would and transparent, more far certainly is it but it, like not may argue that that transparency is important. AtAssembly. Legislative the influence legislative of lack of a for on serve to diem per a are given members example, for the moment, that for argument the of part that informally I understand committee. necessa don’t system committee the find they that is It seems diem. per a given weren’t they if attend not might they and the the that’s that the that’s Assembly, of Legislative tofault me to salary use to responsibility their not that’s and House, the of fault that. up for make the to make did want if we that argue I would and engineering, not and members all at look to want did if we relevant, more House this is, focus the of most where cabinet, of members just recommendations certain tocommission make opportunity has an that be might those of One focus. the change actually may that committee chairs be compensated at a level that’s almost the Why portfolio. without ministers of equivalent, the not if equivalent, think I perspective own my from Well, important? be that would a or career parliamentary a that signal the send do is that would what legislative career can be just as important and just as rewarding as a cabineto. a portfoli in least cabinetwithout or at minister career for commission the thank I and Major, Mr. have, you questions of time. its Justice MLA decide that the chairman should be compensated at a higher rate members? the to over carry that does responsibilities, the of because Dr. western other the to comparators the use wouldn’t I frankly, of government the Alberta, of nature the k thin I because provinces the sizeAlberta, of the Alberta, of oversightrole and scrutiny is Columbia, British be much pretty should comparison our that such of one ourselves considering be should We Quebec. and Ontario, to paid being not to them it’s think the to I attend. get only way the it’s because to but job do their to members entice to commission this of duty fulfilling for them compensate to or done job a well for them reward on serve who members that My is view responsibilities. their committees or perhaps as deputy chairs bemay compensated, but a solves actually think don’t I attend, to up, showing just for diem per on tive inven more little a be to have we that think I problem. the you when well fairly paid are members that think I do that. we how include the tax ter in four those salaries higher substantially mean would that Quebec, at look the that recognize should salary that of part that think I overall. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-41 Rob Anderson, MLA, Airdrie-Chestermere hand, they go and, frankly, not to put too delicate a spin on it, pork Wildrose Caucus out at the taxpayer-funded trough, and the perception is that they’re just there to fill their own pockets. It’s not always a fair Mr. Anderson: Hello, Justice Major. My name is Rob Anderson. perception, but that is a lot of the perception out there. I’m the Justice critic and Finance critic for the Wildrose caucus and I think that what it comes down to in one word is trust. There the MLA for Airdrie-Chestermere. It is an honour to appear before really has been a breakdown in trust between the people of this you. I’m an inactive member, I guess, of the Law Society of Alberta province, of this country, of the democratic world and their right now, and as someone who was in law school not too long ago, leadership. So I think that when we talk about MLA compensation I studied many of your decisions, so it’s an honour to meet you face and so forth, we need to – I mean, it’s all nice to look at these to face. numbers and compare them. It’s an important part of the process, absolutely. But it’s also important to understand that the actions Justice Major: Thank you. that we take as politicians with regard to our own pay and benefits Mr. Anderson: Prior to becoming an MLA in 2008, I worked at will affect the trust that we have with Albertans and, therefore, our Borden Ladner Gervais here in Calgary – I was 30 years old at the democracy and the health of it. time – and decided to run for politics. I’m now 34, coming to the I think that’s why you see things like low voter turnout. One of end of my first term. It has been a very, very enjoyable experience the biggest reasons is that people feel that, you know, their albeit somewhat of a roller coaster. average politician is just in it to line their pocket. I know for a fact By way of context for my comments – and I do apologize for not that’s not true. Most politicians are not in it to line their own bringing a written submission – we did submit to your office pockets. Some are; don’t get me wrong. Most of them are there for previously a letter, which you probably received. My comments the right reasons, but the perception is certainly not that. I often mostly come from that letter. joke that when I got into politics, I found the only way to actually go down in the eyes of the public from a lawyer: to a politician. Justice Major: If you want to add to that, you’re free to mail in That’s unfair but unfortunately true. anything till February 24. On behalf of the Wildrose Party and caucus I have eight recommendation, seven substantive and one more procedural, that Mr. Anderson: Excellent. I appreciate that. I feel might not only restore some fiscal sanity but perhaps restore By way of context, as you know, we’re in a world financial crisis some of this trust deficit that I’ve been talking about and give our right now. Clearly things are not quite as bad here in Alberta as they leaders more credibility when they perform their duties in the are in other places in the world, but it’s clear that the fiscal public. irresponsibility of corporations, of governments, and of individuals The first recommendation is to roll back the 30 per cent really has the world in a very, very scary place right now, a very increases the Premier and the cabinet ministers approved for dangerous place right now. We don’t know what the future holds, themselves in 2008 right after being elected. I feel this is very but we’re in a dangerous and precarious position. There are trillions important. The reason is that right after that was done, the of dollars in debt around the world being heaped on the backs of our financial collapse occurred. I think that by politicians raising their children. As a parent of four kids that concerns me, and I know it salaries in this regard, our political leaders here, what that looks concerns a lot of different people. like – it’s very difficult at that point to be preaching the austerity 2:20 that is needed to get our fiscal house in order when, you know, just four years ago members of cabinet and the Premier received a In Alberta we’ve had four consecutive deficits, probably a fifth. If 30 per cent increase in salary. It’s a disconnect. People will not reports are to be believed, we’ll have a fifth consecutive deficit here take a government seriously when it comes to being frugal or at $100 a barrel for oil whereas we’ve balanced the budget in the doing things like wage freezes or even keeping wage increases to past at $20 and $30 a barrel. So it’s a very interesting financial the rate of inflation if their politicians have increased their salaries position we find ourselves in. Our heritage fund here in Alberta is by 30 per cent. worth less than it was in 1976, when it was established, if you adjust That’s the first. It is important to note that we do have amongst it for inflation. We, of course, have returned to deficits and debt, and if not the highest paid Premier in the nation and the highest paid our rainy day sustainability fund is almost gone. cabinet, and I don’t think that’s appropriate for the fourth-most Why do I talk about this precarious situation that we’re in, and populous province. how does it relate to what we’re talking about? I believe that, as I Second, eliminate the tax-free portion of MLA salaries. This, said earlier, one of the reasons we’re in this mess globally and again, goes back to that trust issue and that credibility issue. Yes, certainly here as well is the fiscal irresponsibility of corporations, of we would absolutely save some money, keep some money in individuals, but also of politicians. I think that people in this world Alberta by doing that and not sending it to Ottawa. Believe me, right now and certainly in this province are looking to their political I’m one of the last people that wants to send any more Alberta leaders to be just that: to be leaders, not only to lead but to lead by dollars to Ottawa than we already do. But the problem is that it’s example. They want the people that represent them to not only just something that politicians enjoy. It is used as a salary, there’s understand who they are as individuals and relate to them but also to no doubt. It’s not used as an allowance. There are benefits that show that they’re not above them. They want politicians and leaders make sure that we get paid back for the gas that we use, for the that don’t feel that they’re above the average person. They’re very, travel that we do, for the housing – there are separate allowances very tired, I believe, and I think you see this. Again, it’s all over the for housing up there – so this allowance is a fairy tale. It’s not an world. It’s not just an Alberta phenomenon. allowance; it’s part of the salary. As I’ve talked to hundreds or even thousands of people over the last four years, they’re tired of politicians being so hypocritical. On Justice Major: You share the view that’s already been expressed the one hand, they talk about fiscal prudence, balancing budgets. by others that even though there’s a cost to Albertans in eliminating Everybody is a fiscal conservative. No one wants to be a fiscal the tax-free allowance that’s permitted under the Income Tax Act, liberal. Everyone is a fiscal conservative. But then, on the other the perception is worth the cost. M288 | Appendices appendix 289 M t - r It’s lota Appendices | Appendices | as a group r anything, but but r anything, February 2, 2012 2, February time work, is- part a -time work, May 2012 Repo minded people. They also live in in live also They people. minded - section of businesspeople, trades businesspeople, of -section No. It should be a committee composed of of composed committee a be should It No. Well, that’s a good question. I haven’t thought that that thought haven’t I question. a good that’s Well, You say that should be an MLA committee? MLA an be should that say You Who would select them? select would Who Calgary ain, I mean, that would really improve the trust trust the improve really would that I mean, ain, : : – home mom. You know, I think that we get paid paid get we that think I know, You mom. -home ion. hat subsequent election so that the people of Alberta Alberta of people the that so election subsequent hat -at view em based on some criteria that you’d come up with. come you’d that criteria on some based em Major Major I would recommend that you mandate that there’s an there’s that mandate you that recommend would I ice. Anderson: Anderson: d take less. You’d be prohibited from taking more, but if you you if but more, taking from prohibited be You’d less. take d My eighth and final recommendation is more regarding the the regarding more is recommendation final and eighth My Then, of course, we’d vote on that committee recommendation recommendation committee on that vote we’d course, of Then, That leads to recommendation7,that after that recommendation Six, We know when we get into this what we’re going to make. It’s It’s make. to going we’re what this into get we when know We part has wife, my Anita, kids. four got I’ve idea. the like would Albertans think I and idea, the like I and I know how busy you must be going all over the province, province, the over all going be must you busy how know I and ise or a little bit less of a benefit,” or whatever it is. “We’re “We’re it is. or whatever benefit,” a of bit less little or a ise combining all of this data, looking it over, reading it over. reading it over, looking data, this of all combining possible if that hope I Major. Justice doing, you’re what of process – going to the polls here in six months, and we want to make sure sure make to want we and months, six in here polls the to going pockets.” our lining we’re like not looking we’re that t to prior not or choice right the made we on whether a say have could rather than do it as was done thislast time, a 30 per cent pay raise right after the election, course, which,of questionable is a very pract the realm of reality, which a lot of politicians I don’t think do do think don’t I politicians of lot a which reality, of realm the kind that of important just to think it’s have I sometimes. Ag grounding. level between political leaders and the average Albertan, knowing recommendation the Again, our salaries. them setting it was that from this committee wouldonce be eight every oneyears, year before the election. those on vote to Legislature the allow would we made, was committee recommendations to and choose. You couldhave two choices as a Legislature. You could either accept or them, you coul that just a back number you with comes committee the that feel say: to able be should Legislature the justify, politically can’t a of bit less little a take going to No. We’re what? “You know ra time stay time reasonably. I mean, notwe’re living the vida loca o to made we that choice a it’s that think I enough. well doing we’re be involved in public service, and I don’t see any reason we can’t live with a small, yearly inflationary increase. independent pay committee, MLA representativeof Alberta’s cabinet and MLAs of and benefits pay the review to population, ministers once every eight years and then have that committee report those recommendations exactly one year before every second elect Justice Mr. everyday Albertans, a cross through. It’s a very good question. You’d probably, obviously, have have obviously, probably, You’d question. good very a It’s through. independent someone or perhaps, yourself, like someone have to th select any see I don’t so office, for running to prior us to known made reason why we shouldn’tbe happy with an increase every year, That’s inflation. of rate the of balanced, is budget the assuming reasonable. Justice Mr. Albertans are fair people. They are. I just feel that the average – politicians the tell not to and is go going Albertan or year a $20,000 make we that recommend to going not they’re fair that. They’re like something people, professors. You know, you’d go through it. I don’t know know don’t I it. through go you’d know, You professors. people, look it would what like. -sector vincial vincial s of a provincial provincial a of s index, rather than than rather index, living, by inflation. inflation. by living, hat, knowing human human knowing hat, retiring MLAs to one MLAs retiring MLA Compensation and Benefits Re Benefits and Compensation MLA living -living n allowances, sometimes in th that people in the private th people that in private the them thatthem way. illion dollars. So, again, eliminating eliminating again, So, dollars. illion The great thing about t about thing great The Absolutely. Again, no one wants to feel that their their that to feel wants one no Again, Absolutely. Yeah. That’s right. Very good point. good Very right. That’s Yeah. Even when the federal government seems to tell : : n funded lottery tickets. That’s how the public perceives perceives public how the That’s tickets. lottery -funded fter the budgetbalanced, is index MLA and cabinet should be tied to it at all, but certainly not to politicians’ not politicians’ to but certainly should all, toit at tied be , cut and cap transition allowances for allowances transition cap and cut , Major , MLA freeze and cabinet salaries until the pro free portion of MLA salaries would be number two so that that so two number be would salaries MLA of portion -free -42 Anderson: Anderso Five, a That’s not what a transition allowance is for. It’s for making the for making It’s is for. transition allowance a not what That’s It this spring. Legislature the in extent that to bill a bring did I Four We just need to make sure that we, you know, lead by example example by lead know, you we, that sure make to need just We Three REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | the average weekly wage index, which is often double or triple the the triple or double often is which index, wage weekly average the rate of inflation. Obviously, how the average weekly indexwage of kinds all bonuses, wages, the all of average an it’s that is works for so and bonuses signing different the isnotas I same the service public that do get. feel sector private sector. I don’t think should we be expected to receive the same amount as in theprivatesector because in lot of ways a we’re not taking the same moneta they risks doas ry in private the in bonuses the of some said, That bonuses. those at arrive to sector it’s that feel don’t just I but ridiculous, pretty are sector private the public that think don’t I comparison. or a fair fair matrix a salaries pay. -of to or of cost rate the inflation, salaries 2:30 Mr. 12 of months. a maximum to of service year per pay month’s pay months’ three is formula the know, you as course, of Currently, lead does That maximum. of kind any without served, year every for prettyto some amazingly large transitio dollars, a million approaching certainly dollars, of a million excess are Those packages. severance aren’t Those MLAs. retiring for government perceive should they and them, with line in be it should so sector, private the into back transition every for month one about is which pays, sector private the what year served. I think that’s amount. a reasonable to way long a go would recommendation your that think I fail. did there. is that like something hope that, so I achieving have they that description job a has Everybody balanced. is budget job. lose times it, your you don’t If most you fulfill to fulfill. in increase an get don’t it, you fulfill don’t when you Certainly, part important most the of one that I feel pay. to and means our within live to is description job government’s kids. our of backs on the debts leave not to and budget the balance the if pay in increase any have should MLAs why see don’t I balanced. isn’t budget MLA nature, is that if such a recommendation was given, what would would what given, was recommendation a such if that is nature, politicians of lot a see you’d think I that is happen definitely want they’d because balanced was budget the that sure making of cost the of rate the up by go to salary their in job to politicians their do for incentive extra little a So think I thing. good very a be would regard this politicians think they’re better than the average person, and this this and person, average the than better they’re think politicians that. of just smacks Justice them that they are? Mr. of amount the cut can we ways many are There point. on this money that we send to Ottawa on other policy matters that are far m a to $600,000 of excess in the tax it’s all transparent. Whatever we get, that’s our salary, plain and simple. It’s taxed like everyone else. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-43 of information. But if there is any way you could release your report 2:40 prior to the election being held, I think that would be a very It’s a good question. Teachers are every bit as important, if not important thing. The reason I say that is because it will give the more so, than politicians. So I don’t see how we can sit down with Legislature and certainly the Members’ Services Committee the a straight face in front of the teachers, the nurses, the doctors, the opportunity to make the decision of whether they want to accept it AUPE, or anyone and say: “You know what? We’re $6 billion in or not or accept a portion of it or not, whatever is put in front of the the hole this year. We need everybody to take a wage freeze for a Members’ Services Committee. year or two so that we can get our books balanced again and then But the most important thing is that it will make us all go from there with inflationary increases or whatever it is.” accountable for the decision that we make prior to this next election. They’ll laugh those government negotiators out of the building. It If we make it after, what will happen is that no matter what you do, would be funny to them. this is one of those cases where you’re damned if you do, and you’re damned if you don’t. If you do it after, the problem is that if it’s Justice Major: Let me ask you another question. You’re seen as any kind of an increase in pay, the government, whoever it relatively new to the profession. What’s the monetary price that a is, will say, “Well, we’re just doing what Justice Major told us to person has to pay to become an MLA? do,” and it will become about you. Mr. Anderson: That’s a great question. This is where I do Justice Major: Do you think your party would do that? disagree with some of what the last speaker said. You know, I Mr. Anderson: I don’t at all. We would take less. Well, we don’t guess that maybe some people do get into this for the money. I know what your recommendation would be, frankly. We would take don’t know. I haven’t met many of them. your recommendation, or we would take less, one of the two. Justice Major: They approach it getting in it for the money, but Justice Major: To put your mind at rest to some extent, there’s no how much do you have to sacrifice? Your law practice was requirement that I wait until April to release this report, but I have to growing, and you come to a point where it costs you money to get it done before April. serve the public, but you’re motivated by public service; otherwise, you wouldn’t think about it. What is the monetary Mr. Anderson: Oh, excellent. Good. sacrifice that has to be paid? Justice Major: When it’s done, it’s going out. Mr. Anderson: Well, it depends, of course, on what your education was prior and what you did prior. For me, obviously, Mr. Anderson: Excellent. Well, thank you for that clarification. I it’s a pretty big sacrifice. I would say that most people getting into think that’s a great idea. public service go in there thinking that they’re going to be That’s it, Justice Major. I believe that, you know, we have a bit of sacrificing some future income unless they’re just nearing a fiscal mess on our hands and a trust deficit, as I said. I just ask for retirement. your wisdom. Besides assessing the numbers and doing the You know, our public disclosures are out there. I put about comparisons, there is that trust issue and that emotional issue, that if $120,000 or so on my tax form. That’s what goes on my T4. It’s we don’t set the example as leaders in this province, we’re never not as much as I’d be making at Borden Ladner Gervais, certainly, going to get out of the financial mess that we’re in. as the years go by, but I certainly didn’t get in it for the money. Thank you for your time. There are lots of other things that are worth while. It does open up Justice Major: I have one question, Mr. Anderson. I don’t know other opportunities after you get out of politics. that you have the answer, but when we’re talking about compensa- Justice Major: Well, we’ve heard different views on that. Ray tion to MLAs and the Premier, the total is less than 1 per cent of the provincial budget. How do you account for the attention that it gets? Speaker spoke of the difficulty that MLAs have going back to private life, that it’s not necessarily a plus on their CV that they’ve Mr. Anderson: You know, that’s a very good question because any been an MLA. recommendation you make, no matter what direction you go, it will always be a small fraction of the budget, as you say. I think what Mr. Anderson: Certainly, if I lose the next election, you’re right. we’re dealing with here is that – let’s give the example of the It probably won’t be easy for me to get work in any government- teachers’ contract. We’re currently in the process of negotiating a related field. teachers’ contract. So the teachers come to the negotiating table with You know what? Again, you get into public service knowing the government, and they look at what the government MLAs get. what you’re getting into. If it’s not for you, if an aspiring They’re professionals. Teachers go to school for five years now, I politician can’t live on $120,000 a year, then don’t get into it. I think it is. They go to school, and they have bills to pay and families think if you had a clear salary, whatever it was – maybe it was to feed and all that. $120,000 all inclusive and adjusted for the rate of inflation – and They see a government, the cabinet and the Premier, that has you knew going in what you were getting, that’s pretty good given themselves a 30 per cent pay raise. They see that every one of stability. You know what it is, and I think that’s fair enough. their salaries – cabinet, MLAs, and Premier – are tied at a minimum level to the average weekly wage index, which over the last few Justice Major: Thank you, Mr. Anderson. years has been about a 4 to 5 per cent per year increase. So they take Mr. Anderson: Thank you, Justice Major. a look at that and notice that we haven’t rolled those things back, and they say: well, that’s all fine and dandy that you want us to just Justice Major: We’ll take a 10-minute break. take 2 per cent or whatever the rate of inflation is in salary increases every year, but are you better than us? [The meeting adjourned from 2:43 p.m. to 3:02 p.m.] M290 | Appendices appendix 291 M t - r to nd ou for ou for see the Appendices | Appendices | to February 2, 2012 2, February Susan her is name. . It will now Calgary be . It will May 2012 Repo Egmont - plated pensions. -plated k: “Why are you working so hard? What is in in is What hard? so working you are “Why k: and I’ve taken school classes there – You should tell us the riding you’re in. you’re riding the us tell should You Ms Sorensen, the mike is is yours. mike the Sorensen, Ms document? that file to want you Do Put a few more people on it, okay? it, on people more few a Put Calgary Your Honour, I would like to thank y thank to like would I Honour, Your There are nomination meetings. You might consider consider might You meetings. nomination are There Well, I think that she is quite happy to be the the be to happy quite is she that think I Well, I’m in Calgary I have already givento it the front desk. It’s not a It’s nice to meet you, to sir. meet nice It’s : : : : : – – : : : : : Thank you. Thank : ud the office staff of my MLA, who answers my concerns concerns my answers who MLA, of my staff office ud the view Major Major Major Major Major King Sorensen Sorensen Sorensen Sorensen Sorensen Committee reports cost a lot to prepare, to bind, and to store. I I store. to and bind, to prepare, to lot a cost reports Committee What are the qualifications to become an MLA? Is there an I’ve been involved in politics at all levels of government since I When I was employed as a teacher, I had all of incomemy taxed. appla I She should be our MLA. our be should She Thank you for coming. for you Thank representative’s assistant. She’s wonderful. some requested we when group a seniors’ with volunteering was were we which issues on the prepared been had knew we literature We read. even or upon acted been never had report The studying. report. the request to group first the supposedly were education program for them once they are elected? Is there a requirement a there Is new MLAs? the for program mentorship be presentduring the sittings the of Legislature? Because the sitting, Friday a ever rarely is and there so brief usually is sitting very is It attendance? in be to MLAs for possible be it would embarrassing including me in your schedule to present my point of view on the on the view of point my present to schedule your in me including MLA compensation. I it wonder if a coincidencewas that this review occurred after a number of the retiring MLAs received generous retirement packages from the Alberta government and, further, shall receive gold transparent, a bring to efforts my However, young. very was democratic government seem to have failed. When I was involved, as would friends my you?” for it I didnot have extra pay for committees, extracurricular activities, ba chaperoning interviews, PT campaigns, fundraising trips, field to assistants with office an have not did I teams. coaching or trips, weekends worked often I bookkeeping. and questions the manage to accountable and available be to expected I was pay. extra without parents. and their students the clients, my caring. and knowledgeable, efficient, is wonderful, She quickly. and Justice Ms that. Ms really saddens me because Egmont has a historical a historical has Egmont because me saddens Acadiareally , that and base. Justice empty desks when the business being discussed is about Alberta’s Alberta’s about is discussed being business the when desks empty immediate and future concerns. very long document. It’s just a few points of view. of points few a just It’s document. long very Marlene Sorensen Citizen Private Ms Mr. Ms Justice Justice Justice Ms - - - - - been April and and -April equired, skills equired, skills roviding that infor that roviding MLA Compensation and Benefits Re Benefits and Compensation MLA base compensation, total total compensation, base -March. 0 organizations and literally literally and organizations 0 us all the kind of derivatives of of derivatives of kind the all us ries andries even acrosssectors, public and then bringing in compensation compensation in bringing then and March is aggressive, but we’ll try. That’s too late. The report has to go in by April 1. April by in go to has report The late. too That’s It would be desirable if you had it done in time for time in done it had you if desirable be It would mid about talk Let’s - : : : solving, accountability in our lingo. We’re going to going in our lingo. We’re accountability -solving, ministers, parliamentary assistants, and opposition and opposition assistants, parliamentary ministers, Good afternoon. I’m just presenting a little bit about about bit little a presenting just I’m afternoon. Good I think it will probably take until late March. We can can We March. until take late probably it will think I We’ll have it done by April 1. April by done it have We’ll Mid sing standard costing techniques to put an annual value value annual an put to techniques costing standard sing : : : : Major Major Major -44 King King King King tion. Lastly, we’ll be providing benefit information as well. So well. as information benefit providing be we’ll Lastly, tion. in a calibrated,objective that way allows us to go across We expect to have this work done by early to mid by done work this have to expect We Basically, what talkingwe’re aboutis using an evaluation is jobs these evaluate we use when we that methodology The If lookingwe’re outside of elected officials, we’ll also be We’re going to be evaluating using our methodology, know methodology, our using evaluating be to going We’re - job Hay ours, of property intellectual is that methodology a sing REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | will submit the report to you. report the submit will Justice data from our compensation database for comparison purposes. purposes. comparison for database compensation our from data The database itself has about50 on that. reporting be we’ll Then jobs. of thousands and thousands on publicly based data compiling be to going we’re Additionally, MP compensation and MLA on information disclosed arrangements across the country, so we’ll be p around for about 60 years and work in human resources resources human in and work years 60 about for around or rewards do with to has that of part big a and consulting, provide to really is process this to contribution Our compensation. by is data compensation provide to going we’re that way The data. u methodology. sizing of evaluation objective an do to and determine to jobs of process r knowledge of terms in complexity job’s the accounta of level the and job, the in thinking creative required, in role. the bility donepretty consistently. We’re pretty careful to make sure that allows This evaluations groups. are consistent client our all across – data compensation compare to us problem how, be evaluating the core MLA role pl the role – leaders, et cetera, et cetera – ma we’ll have base compensation. the on reporting be we’ll and compensation, bonus on reporting of types in be two will benefits level The of bene as well. fits outline report, be which will prevalence benefit a will One reports. market the in prevalent what’s and provisions benefit detailed well, As organizations. other with predominates what and place we’ll be u can you then that so purposes comparative for plan benefit the of compare the total remunerationpackage against a total remuner ationpackage in the marketplace. Hay Group Mr. for provide to engaged been we’ve what and is Group Hay who have We organization. consulting a is Group Hay process. this -wide. We’ve world staff support and consultants 2,600 about Herb King MLA have that report to you for latter March. Mr. Justice post it. will it, we get we So if web. the it via to see public the Mr. Justice Mr. compensation, including bonuses, as well as benefit compensation compensation benefit as well as bonuses, including compensation, – indust across and organizations doing. be to going we’re what that’s So sectors. private and REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-45 3:10 advantage of that, the monetary consequences would be that we What were the careers of the elected members before they were would pay the MLAs more so that they could pay their income tax elected? We are led to believe that they shall not have a career when to end up with the same amount. they retire or are defeated. Is this why the severance package is so In order to end up with the same amount, but as a straight, open large? Did their past career disappear? What about the lucrative salary that everybody understands, would cost the taxpayers of board appointments some of them receive? Alberta about a million dollars extra that we’d send to the federal How many committee reports have been predetermined conclu- government. Now, you’ve heard, if you were here, some of the sions, but to make the public feel their ideas are worthy, there are people saying: well, that’s a relatively small amount, and for the hearings? For instance, with the additional boundaries there were sake of transparency I think the government should do that. Do hearings. I made a presentation at one. Why is there a need for more you have a view on that as a taxpayer? MLAs? Upon the adjournment one committee member Ms Sorensen: I think that, yes, I agree. If that’s the salary they acknowledged that I had some valid arguments. However, more should get and it costs us more initially, at least it would make us MLAs were necessary because the Premier had already decided. feel better that they’re contributing to income tax. I’m sorry that I believe the elector participation during a committee’s hearings is the Income Tax Act allows all politicians – federal, provincial, due to the fact that there is only about 40 per cent voter turnout at and whatever – this tax-free allowance. elections. Taxpayers just believe that it does not make a difference. At the last provincial election, 2008, the compensation for MLAs Justice Major: I’m only speaking of MLAs because that’s all I’m increased by about 30 per cent. People were losing their jobs. certain of. Businesses were closing. There was little attention to constituents and their financial plight. In many cases I wonder how many Ms Sorensen: Yeah, I know, but you’ve indicated the tax act is constituents know who their MLAs are. If they vote, they vote for for, you know, councillors as well. the political party which is under the candidate’s name. Standing committee chairs and the members, too, get a standby Justice Major: There are provisions for others, but specifically stipend. They may never have to meet. Of course, their pension is for the MLAs I was interested in your view, which I thank you for. tied to the five highest years of earnings. In 2010 the chair earned Ms Sorensen: I thank you for your time, sir. $1,500 extra per month. The deputy chair earned $1,250 extra per month. Each member earned $1,000 extra per month. There was a Dr. David Carter, Former Speaker minimum number of hours of meetings, and if those hours exceeded Legislative Assembly of Alberta four hours, there was an additional allowance. If the MLA remuneration chart for 2010 as found on the website and referred to Dr. Carter: Your Honour, thank you for the whole proceedings. in the above passage is accurate, how can a retiring MLA get the They’re most interesting. To follow along your instruction to other severance package as reported in the media? speakers this afternoon, my background is in canon law, which a My husband and I did not and do not receive half of our salary tax lot of them don’t even know what that means, but that’s free. When an MLA gets this privilege, then his or her taxable understandable. I know that you do, sir. income is smaller and their taxes are less. I believe that an MLA should get paid all of his or her salary, and if he or she is having Justice Major: I try to avoid it, but I know what it means. difficulty avoiding taxes, perhaps a consultant can advise them. 3:20 MLAs should look after their own retirements with contributions to RRSPs just like the taxpayers, including myself, are required to do. Dr. Carter: I can understand that, too. In recent years I seem to We need a transparent government. From Webster’s dictionary it have avoided it as well. means without guile or concealment, open and frank. Bill 50 about Then, of course, I have extensive background with respect to land use was passed without much ado. Now there are hearings to the Alberta Legislature, in particular as Speaker. In part of my classify the bill and make amendments. report, at the back, there’s an extensive bibliography where, I believe the MLA compensations have contributed to a bigger indeed, I was involved with a number of international committees, deficit for Alberta. not only with the church but also with respect to the Office of the In conclusion, I concur with the Canadian Taxpayers Federation Speaker and before that in terms of a Member of the Legislative that the pay scale should be a base salary, should be less Assembly. My background is specifically, fortunately in my case, complicated, and should be transparent and that all income should with legislative officers such as the Ombudsman, the Auditor be taxable. As it is now, the taxpayer believes that the MLAs are the General, the Ethics Commissioner, and the Privacy Commis- worst paid in the country. However, with all of the allowances, they sioner. In fact, I appointed the just retiring Privacy Commissioner are near the top or at the top. to be one of my table officers as legal counsel. Thank you for your patience. That background has brought me to a very interesting position. I must say that a number of my comments, in particular for those Justice Major: Do you understand the nature of the tax-free allow- who take the time to read through the brief that I presented, have ance? very much been in defence of the parliamentary process, and that, of course, impacts upon what it’s like to be an MLA, to be in Ms Sorensen: They don’t pay taxes on it. Is that correct? cabinet, to be the Premier, to be the Speaker. One of the problems in terms of various issues with regard to Justice Major: Well, that’s correct, but there is a provision in the the Legislature and this matter before the panel is that oftentimes, Income Tax Act that permits MLAs across the country and another not only in the general public but to some degree with professors provision for city councillors. With respect to the MLAs the of political science – and it’s certainly true, unfortunately, with Income Tax Act says that they’re permitted a tax-free allowance members of the Legislature or Members of Parliament – they of 50 per cent of their indemnity or a fixed number, $25,000, don’t do their homework, specifically on the matter of the division that’s exempt from income tax. If the province did not take of powers in terms of the judicial, the executive, and the M292 | Appendices appendix 293 M t r and they’re they’re – Appendices | Appendices | and library February 2, 2012 2, February a can haveaccess to ell, perhaps that’s part of of part that’s perhaps ell, May 2012 Repo hasize that because in your s two weeks later than the which is the letter from the the from letter the is which and it’s there in great detail – detail in great there and it’s party, open committee to the the to committee open -party, t makes for event for makes more cynicism watering them down. them watering that there is to be transparency, an and that’s a wonderful project a wonderful that’s and – ions and developed, indeed, the computer system system computer the indeed, developed, and ions Calgary – . Then that is promulgated so that every member of the the of member every that so promulgated is that Then . view and unfortunately it goes back to the office of the chairman of of chairman the of office the to back it goes unfortunately and To go back a hundred thousand years when I was Speaker, I I and Speaker, I was when years thousand hundred a back go To In recent years that has all been changed. They’ve moved the In actual fact, by moving that all Another part of the issue is that sometimes we have Members of of Members have we sometimes that is issue the of part Another – report my in mentioned have I Then when the committee meet Nevertheless, throughoutof all this thePremier has stated – Now, there’s a real reason I emp openness in all of the discussion about this key issue before us. So So us. before issue key this about discussion the of all in openness therebe and should withthe Alberta transparency that is it Members’ Services Committee. The committee does meet, and the in enshrined are words golden those all published; are words Hansard medi the and members the plus public general what exactly was said in the Members’ Services Committee. I But Room. Confederation in the meet to used committee the decided together with the committee thatrything eve we’d move are people when that so Chamber the of floor the onto down schools the by brought there. They can see that their Legislative Assembly members are transparent. and open It’s public. in They’re meeting. committee meetings over into the Annex because it’s more convenient for of all thenecessary equipment. Back when I was Speaker, I had to look after things like the Hansard communicat and that’s in place. Annex, we’ve lost openness and transparency to a large degree. take not does That published. are minutes the least at However, of terms the under there because Commons of House the in place But camera. in done is everything Economy Internal of Board the at least in Alberta we can have access to the minutes of the Members’ Services Committee. it’s a very laudable thing – report, sir, and as I’ve mentioned in my preamble in the report, a a report, the in preamble my in mentioned I’ve as and sir, report, And task. Herculean a have You opened. been has box Pandora’s then I remembered what it thatwas Hercules was empowered to do. He had to clean out the stables. W and chaff what’s out cutting with, deal to have you what And, Solomon. of wisdom the need you said: I Finally, otherwise. I’m when “Well, say: who office for running MLAs or Parliament that take to going not I’m pension. a take to going not I’m there, tha So emolument.” rich a of kind onbehalf of the electorate. that committee the that is to this sadness greatest my that established your panel has some very flawed, irregular process in it, I dwell Committee. won’t Services Members’ the committee, that the member, the that fact the than other on that further much too Speaker, who occupies that office was given a letter, a mandate said: it and taken have should individual That Premier. the from of power the within not is do to directed been I’ve What “Sorry. the Speaker.” The various footnotes are therein of terms this that. beyond on go I and report, receipt of the letter,because there is indeed a serious timeline the in actual fact here, is now committee the that upon yourself a do to perhaps, inadvertently forgot, committee the of chairman document, the of filing necessary of interpretation chairman’s the give to on went he Then Premier. on went then and be would committee this of mandate the what inappropriate, quite really are things these of All it. to spoke and and words my choosing I’m and 3:30 - the very at the the at today thattoday to be specific, a , or whatever title title you , or whatever MLA Compensation and Benefits Re Benefits and Compensation MLA fact it’s determined by the ntrols access to the Premier, ed handouts; it’s platinum as of as platinum it’s handouts; ed take that kind of comparison of of comparison of kind that take in particular the Flames – compared to what the responsibil the what to compared edicine Hat, Lethbridge, and Red Red and Lethbridge, Hat, edicine ee is there because it’s vital a very y’re going to do whatever they want,” want,” they whatever do to going y’re and this is an item that is within control of of is that control within item an is and this the executive assistant st throw that one out out one that throw st ju I diminished. been has – I love watching the Calgary Flames or the -46 rnment committee. So it that is as the Members’ Services As a footnote there – there a footnote As Now, indeed, within that committee it has representatives from representatives it has committee that indeed, within Now, There’s a great concern, I think, underneath for the average I’m pleasedI’m that the committ the to respect canWe with see it all across Canada in the board I think there’sdeep a anxiety there, and back comes it to Calgary the Herald from noticed I thing. other The REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | the Premier herself government – MLA there. amount of salary that a person gets. Now, they’ve got great skill, great got they’ve Now, person gets. a that salary of amount to that compare do you how across, that take to try you when but an MLA? The same thing with the chief executive officer of a do you How corporation. huge up the heads really who person the to across benefits and salary the Honour Her That’s province? this in corporation biggest Premier. Youlook at the that salary she’spresently getting, and poor pretty that’s gee, say: you this representing for and province this running for are ities world. the to but Canada to only not province getting is no doubt, efficiently office, her runs that to give, want The ludicrous. absolutely is That Premier. the than money more to background insidious an there’s that is happens that thing other that because that person same co whether it be a cabinet from minister or a government from MLA. say: themselves they and salary, big this with person this Here’s well, rolemy as a government – MLA -plat gold about talk don’t we now but Roughriders, Saskatchewan Legislature. All too often, like decisions of the committee that that committee the of decisions like often, too All Legislature. it is not a committee; a is this that to panel, Legislature form came gove to goes this report where that’s to this panel, life gave Committee initially. discussed be but in actual Legislature, the of parts all today. look, They this. it’s and bills, grocery their pay to trying person do – I as just MLA who, members, government are who committee, on that majority back further or caucus from back instructions their get turn, in from cabinet.So that’s the oneof things that’s created the committee. issue. the to speak to wanting people of number a get didn’t Deer a is issue the think I because that by misled be shouldn’t we Now, public. general the to concern great of It’s issue. burning and politicians municipal or House federal the about cry and hue there out issue an it is think I benefits. and their salaries their where, in large part, there isa cynicism on the part of many “The say, They taxpayers. great the and collapse the of conditions economic world whole a whole There’s example. for dollar, euro the about worry at raised being issue this of terms In there. that’s thing economic e of pocketbook the in hits that one it’s time, particular this the or prices food of increase the it’s us, whether of one single more even this makes That heating. of cost the or gasoline of cost of a sensitive issue. issue. Indeed, it is to a large degree sad that don’twe have a host this to concerns their present to able be to here people of other that previously, mentioned had you as and, commission scheduledpanel meetings at M next the at well, “Yes, say, can We thing. insidious an that’s so isn’t that but wish,” they if out them throw can they election necessarilyhappen. what will REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-47 my goodness, in that respect I revert to my other profession, which moment I was elected to Speaker, I became neutral, I became is that I pray for you as to your whole mandate. unbiased, and never once would I have even attempted to think Nevertheless, we have some other things that need to be that I could introduce any piece of legislation or a motion. emphasized, and I’ll quickly go to those and then come back to the As we go forward here, perhaps, indeed, an MLA pension plan process forward. In the mandate one of the comparison things is is better to be put in place. Yes, I was in the chair when the that the salaries should be linked up in association with the pensions were reduced under the new administration after Premier judiciary. As you well know, for quite awhile in this province Getty, where things were cut back. When you look at the there was a lock-step arrangement that if the cabinet got a raise, examination of every step of the way since 1989, there’s one then the judges could also anticipate that they would get a similar person who was involved in every bit of that, and it goes all the raise. In terms of that process it needs to be removed because the way from 1986, actually, to the present, and that is the present judiciary itself, that august body, needs an independent review occupant of the chair of the very high office of Speaker of the process as well so that they don’t get caught up in or potentially Legislature and, slash, chairman of the Members’ Service caught up in this kind of a thing, this comparison that we’re going Committee. through with MLAs. Well, perhaps an MLA pension plan is a good model to go back The government committees that are listed on this same to because as I’ve looked at these increases over the years during mandate are not committees of the Legislature because they only that period of time, to use a very colloquial phrase, all that I have have government members. Forgive me, but it’s a make-work seen is a shell game, moving this from this to this. Compared to project that was introduced in 1993,when there was a change of where we were before the 1993 imposition, what has happened, as administration in this province. Part of it was that if we have these a rough guess, is that there’s been an increase of benefits overall committees, that are supposed to be standing policy committees, by at least 45 to 55 per cent. Now, in terms of other things, they can indeed advise a cabinet minister. Yes, but they should be perhaps the cost of living, indeed, has to be studied because at one paid out of the envelope for the particular department such as stage not every member of the pension plan for the MLAs was Transportation or Health or whatever. They are not committees of given that kind of a benefit. the Legislative Assembly. A major thing in all of this discussion, 9 on my sheet, is that the So that’s why we go back. As I’ve said, oftentimes people don’t unfunded liability of public services pensions across the board do the homework, even MLAs. There are three things they should needs to be addressed because that’s a terrible sort of Damocles be referring to such as the standing orders of the Assembly. That’s hanging over the taxpayers of Alberta. the kind of stuff Speakers have to memorize. Then the next thing is Beauchesne’s Parliamentary Rules & Forms from Ottawa. I Justice Major: Are you aware, Dr. Carter, of any government know there are over 1,200 references in there that you’re supposed where the pensions are funded? I read in debate on the House of to know. I had to memorize them three different times. Then to Commons recently that they are concerned about that very issue of back it up is Erskine May’s Parliamentary Practice from unfunded pensions. Parliament in Westminster, which is our tradition. If we as individual MLAs – because that is germane to this Dr. Carter: I’m not aware of where they are completely, but it’s whole project – don’t know the rules under which we operate, an ongoing concern that is sitting there like, perhaps, another set then God help us. In particular, MLAs, especially on the govern- of elephants in the room. I’m not sure. It goes not only to the ment benches rely on: oh, well, our Government House Leader MLA pension plan that was still there and its variations, but it’s will look after this. Oftentimes as I watch federal question period certainly true of other groups under the Alberta pension schemes. and as I watch Alberta’s Legislature and other Legislatures, they I would recommend that MLA and cabinet salaries be commen- don’t adhere to the rules. If, indeed, that goes as far as the surate in some kind of a relationship with private industry and Speakers and tends to bullying rather than being able to cite what that, again, with future commissions I would see that there would the references are, what chance does a Legislature have? be at least three members of the panel because I’m overwhelmed Anyway, with respect to the MLAs in conference the oversight with the overwhelming challenge and responsibilities for you in of allowances and constituency expenses is indeed germane to your own right. your consideration, sir, because in actual fact in the last resort it’s Specifically, I’ll go quickly to the matter of MLAs in terms of the officers of the Legislative Assembly who supervise the their responsibilities because, indeed, it is onerous. The duties and expenditures of those allowances in the constituency. I myself responsibilities are a full-time job. It even was a full-time job have a number of examples I can cite whereby I had to back up when I first became a member in March of ’79. In that respect I’m my staff as we had to gently admonish members from each of the probably the only one who did get a pay increase when I became caucuses while I was there. an MLA. That’s letting you know how poorly paid Anglican I believe that, indeed, the oversight in allowances for the clergyman were and still are. official officers of the Assembly – Auditor General, Chief The MLA has to be truly attentive to all aspects of their Electoral Officer, and so forth – is up to the Speaker, whoever that constituency. Again, at my very first caucus meeting with Premier person, he or she, may be, because they’re to help to protect those Lougheed somebody raised the issue of power, and he stopped officers from any infringement from the government bench and them dead centre. He said: “Whoa. We’re elected and the from cabinet. And there have been enough examples of that in responsibility of government is for all Albertans, whether they time past. They are independent. They are not the government. voted for us or not. The moment you start using the word ‘power,’ They need to be protected in terms of their ombudsman-like that infects many of your decisions.” I found that to be one of the facility for each one of them. wisest things that I have ever heard. I think of perhaps going back, and, yes, I was there. I was in the 3:40 chair of Members’ Services Committee all the way from 1986 until I voluntarily left politics in September of ’93. I was elected Mention was made by a lady from my former constituency of as a proud member of the Progressive Conservative Party of Calgary-Egmont that, again, in 1993 the Legislature used to sit Alberta under both Premier Lougheed and Premier Getty, but the five days a week. We used to sit late into the hours of the night, M294 | Appendices appendix 295 M t r panel panel Appendices | Appendices | where it is this about about this is February 2, 2012 2, February : the present salary, : as I say, for the free portion of the the of portion free - free portion: I think it is is it portion: think I -free nd in this regard the report report the regard this nd in May 2012 Repo en it intoen they’ve writt yes, a is that it’s closure.has That – here’s got to be another way, a way, another be to got here’s The 30 per cent that we’ve heard mentioned: do do mentioned: heard we’ve that cent 30 per The Dr. Carter, can I ask you about the more specific Calgary : : – I have listened attentively to all the proceedings. Not to my knowledge, sir. The only rollback happened happened rollback only The sir. knowledge, my to Not view Major Major Carter: Carter: As for the transition allowance I know simply by my notes and and notes my by simply I know allowance transition the for As committees on sitting of business The Then the government, in its wisdom, will formulate a bill for an an bill for a formulate will in wisdom, its government, the Then word final quick, one but sir, on, gone I’ve know I have control, control, have They government. the up to is that that -emphasize compensation? Dr. seriously undermined parliamentary progress in terms of this this of terms in progress parliamentary undermined seriously province. Justice today on comment heard you’ve that subject the transition allowance, and the tax Your comments with respect to the tax the to respect with comments Your t but place, it in to keep valid a it’s this. know I to to sell able be somehow, label different place. it in be should believe really but sell, I difficult – happened has what over back going useful. quite is Taxpayers Alberta of Association the of Nevertheless, I’ve seen all of this go through, and it excessively is soon so happened increase cent per 30 last that that fact The rich. of many of mouths the in after the election taste sad has leftry a ve was It allowance. transition a have to useful it’s now right But us. leaving with involved then was I because me to helpful very Edmonton to back to come a far saner place called the Cypress from know I rich. too far is this but pl ace, in be to needs It Hills. in involved people the of many knowing of experience own my that Members’ Services Committee and other places that, indeed, it fatter. make to to try done deliberately it was to part in able be to just done was that committees government too know, you getting, from backbenchers the of some keep I again But money. more them give could you way This unhappy. re Legislature. the of not committee a Justice that? of part of rollback a was there whether know you the process. When in due course the wisdom of Solomon, Solomon, of wisdom the course due in When process. the yourself, has prevailed,the committee, yes, can broadcast the Services Members’ the to action for go should it but publications, this which of out committee the that’s because Committee arises. That committee should discuss the recommendations and does transparency and Openness fooled. be not us let But forth. so occur in Members’ Services Committee, but the moment it leaves et and cabin the to and caucus government to over goes and there transparent and open longer no that’s committee, priorities the to disclose. do not they rules cabinet by and rules caucus by because House, the to that bring and act the to amendment supposedly will be debated by all members of the House. Good Good House. the of members all by debated be will supposedly luck, because what has been happening, again, since the change of limits time of use more and more been has 1993 in administration in debate. What that really means – standing orders; they can do that do that can they orders; standing 3:50 Dr. I mean, God bless volunteers in this province. We’d be dead dead be We’d province. this in volunteers bless God I mean, to has stripe, political no MLA, what matter Every them. without issue current this of raising the of Because on volunteers. rely constituency to going funds or inappropriate about illegal who someone find to able be to need the greater the organizations, Your yourself. protect to able be to accountant chartered a is things. those know constituents in 1993. in in great more that any ive themive ash and two two and ash beginning. I continues to this this to continues I would think it’s less less it’s I think would MLA Compensation and Benefits Re Benefits and Compensation MLA and this included me in the in me included this and what do you do with, like me, an old MLA MLA old an me, like do with, you do what -MLAs and cabinet ministers and even maybe e you going to do when you get home? That’s a That’s home? get you do when to going e you university or something, all that kind of thing. Most Most thing. of kind that all something, or university get any kind of directorships, you know, or fall into into or fall know, you directorships, of kind any get s that the Auditor General, the Chief Electoral Officer – bother. I’ve been running it for all those years you’ve been been you’ve years those all for it running been I’ve bother. -48 We We also have to remember, as mentioned, that we g if I think the benefit – benefit the think I Another current issue that has happened, which is of great great of is which happened, has that issue current Another It’s a fascinating life, yes, but on the other hand, there’s a price of my one know I demand. that there’s that is thing other The There are plenty of MLAs who are afraid to quit. are. They I other constituencies, in on caught has that that is here point The REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | many different ways. You know, it’s like: after they’ve seen Paris, seen Paris, they’ve after like: Youit’s know, ways. different many those So farm? on the back them keep to going you are how elements are there. It’s a laudable occupation. It’slaudable a calling. or an old Speaker? How do you recycle them? I think part of the the of part think I them? recycle do you How Speaker? old an or of roots innate their to back go They this. is observe I that answer community the in supports good being of and volunteers being than 3 per cent of ex of cent 3 per than Premiers teaching at a previously had I case, in my yes, Now, what? to back come us of gone have I would what knows Who cathedral. the of dean been parish, a to back come could I that is point The there? from on to yes. But I use it as another example that there are plenty of former them know to privileged I’m and House, the of sides on all MLAs back gone have who me, for they and them for respect have and and have felt lost. So the transitional allowance is important. very more people, wonderful more attract to going we are money, more experienced people? Not necessarily because we forget, an awful you’ve until that forth, so and professors science political of lot – process the into been didn’t know what it was like to have to fight for a nomination, and and nomination, a for to fight to like have it was what know didn’t an I know me. Believe a fight. was nominations my of one every in this city, in politics kindof street the of lot more awful that and know, to wanted ever I than particular, for running not maybe are that people some do have So you day. back influence the or power the for running they’re money; the communities. particular own their within concern, i to parties, political to donations illegal about concerns raised have MLA an you’re once that is here problem the Well, constituencies. isn’t House the when constituency the into back get you and to in to next the able be to fight raise try still money you ing, sitt golf been has things popular the of one respect that In election. Speaker’s original up the set and myself staff My tournaments. create to and lines party cross to was which tournament, golf MLA who lives within an hour’s drive of Edmonton would be at at be would Edmonton of drive hour’s an within lives who MLA the what of clue a not clue, a got haven’t They night. every home pressures are onother MLAs. The distances you travel. The fact that, yes, we’ve lost three MLAs, one in an airplane cr more. even have to likely we’re and road, on the tobe paid, where thereplenty of are marriage breakups, there’s to my sir, apart. And, that fall families are there divorce, counts. on both speak I whereof know I chagrin so for on politics away was minister, cabinet former a friends, dear said: almost son his ranch, to his home came he when that long “Don’t happens. what of example one just that’s Now, away.” again running are who friends my of two or one least at of know because: what ar – few very that think I question. good very as staff well. for was It building. the within of fellowship feelings their to back it took that, captured successors my of Some their for fundraisers great it into made and constituencies constituency. on volunteers. rely you and and we certainly were there Friday. Again I mention MLA REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report February 2, 2012 MLA Compensation and Benefits Review – Calgary MLA-49 Justice Major: There’s been some comment made about how Justice Major: Would you compensate them for serving on a shortly after Premier Stelmach’s election there was a 30 per cent legislative committee? increase, and then subsequently there was either a rollback of that or a cutback of some sort. Are you familiar with any of that? Dr. Carter: They already do, sir, by attendance at meetings. Dr. Carter: Not to my knowledge, sir. Justice Major: I’m thinking of a situation where they are paid an increased amount and are then required to sit on a committee. Is Justice Major: What is your view, leaving aside the transition there sense to paying them for their committee work? allowance, on the present compensation that the MLAs receive? Dr. Carter: Yes. Dr. Carter: For an MLA I don’t think it’s enough. The amount of Another thing that I’ve mentioned briefly is that, in my time that you’re away from home is unbelievable if you are indeed understanding, the committees are formed at the beginning of a a diligent MLA and travelling back and forth to your home. Most Legislature and voted on. For these all-party committees, say the of the constituencies in Alberta are a long way from Edmonton. Members’ Services Committee in particular, they should be there Again, there is a danger factor just being on the road. in person. Again, at the recent Members’ Services Committee, a In terms of the amount of time, a normal week for me as thing that I documented in great detail, I was appalled to discover Speaker: after I was up there from probably Sunday night, then I they can do it by conference calls, which means they then miss the would get away on the Friday to get back to Calgary to my ebb and flow of the committee and the body language. constituency, then I would be there at my constituency office As Speaker, I know body language. For example, in the House Saturday mornings. But in the meantime I also probably had some if I didn’t keep track of what was happening with those 82 commitment for Friday night, two or three on Saturday, and members out there and look them directly in the eye, I knew I was perhaps one on Sunday before I started going back. in for trouble. If I sat there leaned back in the chair, which The other thing is that there is a high visibility of a member. I happened to Speaker Bosley in the House of Commons – that’s gave up flying to Edmonton from Calgary because I’d get to the when the House of Commons question period really started to fall airport and people would be lobbying me whether they were my apart. What you’re saying is, “Okay; come and get me,” whereas constituents or not, which didn’t matter, and the guys sitting if you lean forward like this and look them in the eye . . . beside me on either side in the plane. When I got off at the other end, there was another bunch of people who were going to come Justice Major: What about the Premier? What should the up to me. So if you’re known as an MLA, people will gain access difference be between MLAs, cabinet ministers, and the Premier? to you. What kind of a scale would you think is appropriate? One thing that really concerns me at the moment, sir, is this. Dr. Carter: Well, that’s a curve ball, sir. Thank you. I hasten to Yes, we’re in this electronic age, and the security of individuals is say that the Premier is certainly worth more than what she is only going to be more of a matter of great concern for MLAs and currently getting compared to cabinet. I would go back to that for their families and for the Premier. A dear friend of mine, the other issue. Sorry; I’m a taxpayer, so I would say in all humility to former Sergeant-at-Arms, Oscar Lacombe, used to drive for the Premier that she should reduce the salary of that executive Premier Lougheed, and then he became Sergeant-at-Arms, one of staff member because it’s causing a lot of undercurrent stuff there the greatest sergeants-at-arms that we could hope for. He knows that I’m aware of. I trust somebody has enough gumption to stand full well how many security problems there would have been with up and tell her. respect to the Premier of the day. I can only imagine that it has Sir, I have one quick thing about the rest of the process, and it is increased greatly. If you’re an MLA who has a high profile and if this. If, indeed, they want to have openness and transparency, then you’re being controversial, you’ll need to worry about your after Members’ Services Committee has met, because they’re the security more. ones that are duly empowered to relate back to the Legislature, In fact, sir, while I was Speaker, the Sergeant-at-Arms came to and the government has formulated a bill – this is where the nitty- me and advised me to carry a small baseball bat under the front gritty really happens – then they take the bill to the House, they do seat of my car because at that time I was being too controversial. not impose time limits, they do not impose closure, and they allow Justice Major: What about the gap between MLAs and cabinet free and frank discussion. Finally, three members of the House ministers? Is it adequate? Let’s go on as well to the Premier. can stand up and call for a standing vote. That means everybody in the House has to stand up and be counted and the vote recorded if Dr. Carter: I would think that the MLAs need to have more you want complete openness and transparency. salary because what’s happening there, as was referred to twice Finally, sir, at the back of the document I gave you, I hereby put before, is that these government committees are being used as in as an exhibit the letter of the hon. the Premier to the Speaker in some kind of a top-up to bring them up. I think for government his role as Speaker of the Legislative Assembly and as nonpartial MLAs that will help to dispel some of that. In my mind, the bit chairman, one would hope, of the Members’ Services Committee, that I know about, some of those so-called policy advisory because that’s where all your recommendations go next. committees are not worth the comment. Justice Major: Thank you, Dr. Carter. Justice Major: Okay. If you increase the salary, would you eliminate the committees? Dr. Carter: Thank you very much. Dr. Carter: They would have to take a serious look at those Oscar Fech government committees. Now, the legislative committees are Private Citizen committees of the Legislature, and they have valid work to do because it relates to the Ombudsman, the Auditor General, the Mr. Fech: Justice Major, nice to see you again. I see you now and Privacy Commissioner, and so forth. then downtown when you’re walking, having lunch, or whatever. I M296 | Appendices appendix 297 M t , r ey and they Appendices | Appendices | t ministers, the the t ministers, February 2, 2012 2, February e wages now, of course it it course of now, wages e May 2012 Repo hit, and we’re going to start to start going we’re and hit, ting close to that point. that to close ting e MLAs or the ministers should get much much get should ministers the or MLAs e -elected. That may be a problem of government, but the the but of government, a be problem may That Before you finish, specifically, are you satisfied or or satisfied you are specifically, finish, you Before Well, that’s a happy note to conclude on. conclude to note happy a that’s Well, We’re adjourned until 6. until adjourned We’re Calgary : : : : – . ting now $250,000 a year, but but year, a $250,000 now ting get is the mayor Well, Right. Well, havewe created an inflation democracy. . Thank you. Thank ’s going on, and most people don’t care anymore. It’s It’s anymore. care don’t people most and on, going ’s . : : : d we’re going to start like in the 1930s Depression. 1930s the in like start to going d we’re view Major Major Major Major Fech Fech Fech The wages must compare to what the going rate is, but the the but is, rate going the what to compare must wages The you When hard. it’s but bit, little on a rambling I’m know I Justice Major, living we’re in very crucial times. No one knows Justice only jurisdiction I have is to consider the MLAs, the payment to payment the MLAs, the to is consider have I jurisdiction only cabine and earn, should they what MLAs, the Premier. What recommendations can you make? What do you scope. our outside are matters other The those? of think Mr. re to again get try It’s all called funding, funding. At this time it seems like th like this time it seems At funding. called funding, all It’s must get an increase because that’s the way the inflation has been created. My feeling is that most of the MLAs are common people, and they learn as they get putas MLAs. in Like was indicated, if do, to what know don’t they then elected, get don’t they $10 get corporations big These established. been has rate going almost we See, million. $6 $5 million, year, a $20 million million, th that illusion an create way the and expense and income the to according wages bigger the economy is going. course Of they need a bigger increase, but the in happened what like inflation, create to fabricated of sort it’s everything lot, $900 house, a does how because crashed It 1930s. same the had We’ve $9,000? up to go years few a within included, we Unless there. out this throwing just I’m here. happening thing stop all this, are heading we for a crisis, and then we’ll start over again, an to frustrating almost it’s world, the on across going what’s study to seems nobody because happening what’s to as anybody to listen what know all me, me, which was indicated also. Titanic the like going we’re like seems It to do anymore. what to going it’s days these of one and over again. I mean, what else can I If say? there are any questions Justice today? are making MLAs the that with dissatisfied Mr. the Premier only gets a little over $200,000. She’s not receiving receiving not She’s $200,000. over little a gets only Premier the up for set are comparisons these But compare. you if enough up. and up and up going keep then and follow to else everybody This is I’m what saying. farAs th as what’s and world the in happening what’s to as higher go should we’re eventually but world, the across and Alberta in happening eventually it it up, blow you If balloon. a like apart to fall going pops, and it like seems we’re get Justice Mr. Justice p.m.] 4:07 at adjourned meeting [The . . . Pong. It’s flop from from -flop - he taxpayers no. create We and - way Ping MLA Compensation and Benefits Re Benefits and Compensation MLA money is created by the stroke of a e appropriate compensation and benefit benefit and compensation e appropriate p for the taxpayers. I did run as a mayoral mayoral a as run did I taxpayers. the p for e. I’m not knocking anybody, but that’s the the that’s but anybody, knocking not I’m e. What we really want to hear is what you think think you what is hear to want really we What I study all this – all study I s far as the salaries, compensation, here it how says: d paid. be d Okay. Well, you’ve had some good comments here, here, comments good some had you’ve Well, Okay. Major: -50 Fech: We never talk about: we should be accountable to t to accountable be should we about: talk never We You know, I can go on and on, but you’ve heard so many good good many so heard you’ve but on, on and go can I know, You the 1930s, ’40s, ’50s, ’50s, ’40s, 1930s, the in had we what from away gone have We In reality – In reality u stand to have We REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | and look back at how much governments receive, how much they they much how receive, governments much how at back look and It taxpayers. the to back go should over left what’s that and spend, seems like they’re creating levies, user fees, increasing the taxes, toing main the go it’s anywhere; going not is money the but this of all into look we unless Not problem. the is This coffers. called blame, blam system that has been created behindfrom the scenes. Unless we over start we’ll then and collapse, for heading are we this, all stop again. comments. A chief whip, government assistant government, of leaders much or allowance, transition allowance, RRSP in get should here: And benefits. care health plan, pension a of consideration “The Panel would mak other cities, other use jurisdiction, another to jurisdiction one wages. up the jack to countries, comparisons toother jurisdictions.” See, always we flip candidate, and I gave my opinion. But it’s a no a it’s But opinion. my gave I and candidate, All problem. whole the That’s doors. closed behind much do too three levels of government are playing three- 4:00 the Come changed. had world whole the ’70s, the Come ’60s. world the it but depression, a world had almost we 1980s, hierarchy that ruledthe world seemed to create all these illusions, ney are the mo and technology Like, systems. within systems going what’s frightening almost It’s Judge. now, mortar and bricks the that taxpayers the manipulating stop we unless happen to money. more need governments nothing. It’s themeans system that has Money beenpen. created. it 1930s the in collapsed; Empire Roman the before: Governments now, it stop we Unless collapsed. almost it 1980s the in collapsed; we are heading for another collapse. Why are doingwe it? talk to you now and then. My name is Oscar Fech. I study world world study I Fech. Oscar is name My then. and now you to talk history. I was a developer and contractor. I’ve been to Ottawa at in been I’ve Commons. of House the at been I’ve and the Senate, the in Premiers the most known I’ve Building. Legislature the on. and on go could I Stelmach. and Lougheed, Klein, Ralph past: Justice MLA MLAs shoul MLAs Mr. especially from the last two speakers, Dr. Carter and Ms Sorensen. everybody, for right what’s and sense common use to got We’ve g right goin we’re way The government. or politicians for just not now was indicated three years ago when they had an increase of 30 per cent in their wages. We create so policies,many rules, the of part all is consulting. This subcommittees, committees, problem. whole REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Published under the Authority of the Speaker of the Legislative Assembly of Alberta M298 | Appendices appendix 299 M t r Appendices | Appendices | 4 - 4 May 2012 Repo Transcript 27- Transcript 2012 Major, CC, QC and Benefits Review Benefits and (Jack) (Jack) 04 p.m. 04 February 2, February , Calgary 6: John C. Thursday Transcript of Public Meeting Public of Transcript Legislative Assembly of Alberta Assembly Legislative ourable Compensation MLA Hon REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Presenters Kelly Ernst Co-chair, North American Basic Income Guarantee Congress Robert Kells Private Citizen Heather MacIntosh Sheldon Chumir Foundation for Ethics in Leadership Marilyn Marks Private Citizen John Schmal Private Citizen Dr. Raj Sherman MLA for Edmonton-Meadowlark, Leader of the Official Opposition, Legislative Assembly of Alberta Dave Taylor MLA for Calgary-Currie, Alberta Party Caucus M300 | Appendices appendix 301 M t st r -51 send MLA Appendices | Appendices | to without without to an MLA and MLA an want to know how how know to want May 2012 Repo free allowance. A number of - Their net remains pay the same. Rough ve discardedve it. There are three left: Quebec, Can I stop you there? This raises an interesting interesting an raises This there? you stop I Can Tell me, if you don’t mind my probing, are you you are probing, my mind don’t you if me, Tell Well, you’re my MLA. my you’re Well, Calgary : : : : Yeah, I have. In the time that I’ve been Excellent. Tell me at any point if I get this wrong, in this wrong, get point I if at any me Tell Excellent. So that thereno is difference in theirnet pay. No, certainly I’m not. and probably right about now, I’m guessing, a lot of of lot a guessing, I’m now, about right probably and port will have no direct impact on me for better or for for or better for on me impact direct no have will port : : : : ion of what my callers were telling me for all those all for me telling were callers my what of ion apples comparison. -apples Major Major Major Major -to Taylor Taylor Taylor Taylor The other thing that certainly proved to be true to me in my my in me to true be to proved certainly that thing other The I will speak to you tonight on behalf of the Alberta Party caucus caucus Party Alberta the of behalf on tonight you to speak will I decided have I that already, don’t you if know, also should You Your Honour, the folks we work for, our constituents, who are are who constituents, our for, work we folks the Honour, Your our caucus, Party Alberta the of on behalf first Speaking 6:10 Mr. Justice Mr. here host show talk radio a was I when that before years 10 the in flowed and ebbed say, as you pay, MLA of topic the Calgary, in and loudly most heard I’ve message the that think I topic. hot a as people that is flowed it has when clearly most our compares pay to the pay in the private sector, to their salaries, an will, you if make, to able be to want They thing. of sort that apples interpretat things in Alberta that is not very palatable, but there have been a a been have there but palatable, very not is that Alberta in things worth is transparency that position the take who people of number that? of thought you Have province. the to be may it that cost the calculations come to about a million dollars a year that would go go would that year a dollars million a to about come calculations from Albertans, generally, to the federal government. On mo Justice Mr. your opinion. your some you offer also will I and Taylor, Glenn leader, my and MLA. an as terms two my on based own my of thoughts spring; this called is election the politics when from to retire in make you recommendations whatever Honour, your therefore, re final your worse. Justice them are trying to get a quick dinner into their kids so that they they that so kids their into dinner a quick get to trying are them – ballet to other the and soccer indoor to one drive can ha provinces the the eliminate you If Territories. andNorthwest the Alberta, it means whole, MLAs the keep to want and you allowance in pay additional the pay then they to where pay their increasing income tax to the federal government. resigning because of the pay? Mr. Justice raising and mortgages their paying and jobs their on doing focused – kids their to best our do will we that trusting to Edmonton me like people their over wool the pull to try not and interests their after look in presentation my make and try to going I’m Therefore, eyes. up we’re what tell can they that so tonight English plain indemnity a member’s between difference the out figure to having allowance and a member’s expense allowance and all these other arcane terms that seem we to be so good at coming up with. portion on a receive MLAs that exemption tax the that is position the increase to reasons: three for eliminated be should pay their of benefit a tax remove to paid, are MLAs how much of transparency that’s no longer required, and to remove a tax benefit not is that available to thepopulation at large. 81 section know, you as Act, Tax Income the Under question. to this tax get MLAs the for provides , the Voice ? February 2, 2012 2, February , . . . , the Hinton MLA Compensation and Benefits Review – Review Benefits and Compensation MLA -Currie re were close to a hundred hundred a to close were re Thursday is that the whole issue of MLA of issue whole the that is ca2 a circulation could as we give it. -Currie ansitory, isn’t it? isn’t ansitory, chair] . We really flooded the province, and it was in was it and province, the flooded really We . You were quoted rightly or wrongly being or wrongly rightly quoted You were Well, the response has been what you would would you what been has response the Well, Why don’t we start off with me asking you a you asking me with off start we don’t Why February 2, 2012 2, February Yeah. In any event, I just wanted to put you at at you put to wanted just I event, any In Yeah. I’ll put it on the record anyhow and not attribute it it attribute not and anyhow record on the it put I’ll Everybody ready? Everybody Is Marda Loop in Calgary in Loop Marda Is , . I represent the Alberta Party in the Alberta : : : : : : : How has the response been, if I may ask you a a you ask may I if been, response the has How ch the commission was publicized. was commission the ch Justice Major, thank you for the opportunity to make make to opportunity the for you thank Major, Justice It certainly is. My office is in Marda Loop, and it’s a a it’s and Loop, in is Marda office My is. certainly It Oh. I think you’re mixing me up, sir, with my leader, leader, my with sir, up, me mixing you’re think I Oh. Sure. It’s pretty tr pretty It’s Thank you, sir. I will pass your comments along. comments your pass will I sir. you, Thank : : : : : : : Major Major Major Major Major Major Major -Currie Thursday Taylor Taylor Taylor Taylor Taylor Taylor Taylor Mr. Taylor. The other thing that’s interesting other thing that’s The the MLA MLA the am for I Taylor. Dave is name my record the For REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Title: Title: the in Major [Justice Justice Mr. Dave Taylor, MLA, Calgary Alberta Party Caucus 6:04 p.m. 6:04 February 2, 2012 2, February question? Mr. Justice this presentation to you. I understand that I have something like 20 like something have I that understand I you. to presentation this that near anywhere need to going I’m think don’t I and minutes, any answer to happy be will I point. my make to time much ability. my of best the to have might you questions Justice concerned about the degree to which this commission was was commission this to which degree the about concerned publicized. Mr. the with concerned being as quoted was he Yes, Taylor. Glenn degree to whi Justice eight of the main papers. The website got 2,000 visits. So I’m I’m So visits. 2,000 got website The papers. main the of eight wide as about it got that satisfied Athabasca Advocate Athabasca to you. The procedure we followed was the same as the procedure procedure the as same the was followed we procedure The you. to for the Electoral BoundariesCommission Act. There was a The know. you as posted, website weekly papers such as the Jasper Fitzhugh Justice Mr. question? expect. It has been mixed. I’d that say the people appearing There 15. about be there’d are, you as own, on their personally, were a few expert witnesses. It seems that it makes good coffee and go and butt your off get to have you when then but talk, room fades. of sort interest the doing, you’re as do something, reflectspay less than1 the per centof province’s budget. It comes a great be to seems there up, stirred gets it When flurries. up in it arises. as quickly as to almost die seems it but interest, Mr. ease if concernedyou were that this wasn’t adequately advertised. Justice Mr. Calgary tonight to you speak and will I Legislature, Justice Mr. ourhood. neighb wonderful REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-52 MLA Compensation and Benefits Review – Calgary February 2, 2012 years in talk radio and what my constituents have been telling me purpose other than originally intended, I would argue and we for the last nearly eight years is that when somebody complains would argue in the Alberta Party and in the Alberta Party caucus about their taxes being too high or they’re having to send too that there’s a transparency issue here as well. many of their tax dollars off to Ottawa as opposed to sending them to Edmonton or down to city hall or whatever, if you drill down, Justice Major: There’s no doubt there’s a transparency question you usually find out, I’d say 9 times out of 10 anyway, that people because we’ve heard that, but there’s also no doubt that the are really saying: “I can’t follow my money. I don’t mind paying Income Tax Act is very clear. In section 81 of subdivision g, my taxes if I know what’s being done with my tax money. So be which you probably have looked at, it’s 50 per cent of your salary transparent. Be clearer about it. When you charge me a school tax, as an MLA or a fixed amount, and they do describe it as an make sure that’s going to education. When you charge me a expense. There’s nothing required by way of showing the highway tax, make sure that’s going to paving the highways,” that expenses, and as you say – and I think it’s a fact that’s known – sort of thing. I think it’s the same with MLA pay. the MLAs consider it part of their pay. Justice Major: I understand that sentiment, but what I am curious Mr. Taylor: I think, and this is my opinion, sir, that if we about is: if the tax allowance was properly explained so that consider it part of our base pay, then it should be taxed or it should Albertans knew that eliminating it is a cost to the province, would be adjusted upwards perhaps – that’s your call, not mine – and they still be as anxious to see it eliminated? If we described it as a taxed just like it would be if it was salary in any other occupation, federal subsidy to Alberta, would that be any more palatable? really. That’s a decision that’s been made by the federal government, by eight other provinces, and by at least one of the Mr. Taylor: I doubt it somehow. territories. I think that’s a decision that’s been made quite possibly for political purposes rather than legal purposes in that, you’re Justice Major: You think that, all in all, you’d rather see, absolutely right, the Income Tax Act aptly describes it, but the rounded off, a million dollars go to the feds, that it would result in Income Tax Act, perhaps, in that section hasn’t kept up with the pay being more transparent. public opinion. Mr. Taylor: I think people would be gratified by more clarity Justice Major: Or provincial-federal relations. They don’t want around it. to change the act. There’s another issue, too, with the one-third of our salary that is or used to be classified as tax free in that the ratios have Mr. Taylor: That could be. changed. We’re taxed just like the people we serve on the first approximately $52,000 a year that we’re paid. The next $26,000 is Justice Major: There are only three provinces or three groups the tax-free portion. That $26,000 is called the member’s expense taking advantage of it. Rather than cause a federal-provincial allowance. Once upon a time, Your Honour, certainly before my argument, they leave it there. If Alberta decides they don’t want it, time, it was aptly named, and it could be justified. then it’s not costing the feds anything other than to Quebec. This is an unusual job that we do in that we are required to Anyhow, I’ve pushed you off the topic. spend a good deal of our working time away from our homes up in Mr. Taylor: Okay. Well, from this point on, Your Honour, I the capital city. We need a place to sleep. We need food to eat. We would like you to take my remarks as my own, in part because need to travel regularly between our homes and the capital. There they cover some areas of MLA compensation that we have not are other incidentals and sometimes significant expenses that we necessarily taken a position on at the party or caucus level and in incur that directly relate to being an MLA, and we, of course, need part because they are my own opinions based on my personal to be able to pay for all that. Once upon a time, sir, that was what experience as an MLA. the member’s expense allowance was for, to cover those expenses. A couple of moments ago I said that one-third of an MLA’s Today those expenses are all covered by other allowances: salary used to be tax free. Since we went on to talk about the fact housing allowance, mileage amounts . . . that we still don’t pay tax on that portion of our income, you Justice Major: I don’t want to interrupt, but I think it’s very clear might be wondering a little bit about what we’re talking about that that tax allowance is really part of your pay. You have the here. So here’s the deal. ability to collect other expenses, whether it’s a car allowance, with In 2008 the Legislative Assembly Special Standing Committee receipts or whatever method you use. None of the tax-free on Members’ Services, or Members’ Services Committee for allowance as described goes to expenses now. short, the committee of the Legislature which is actually charged with setting compensation rates for MLAs, voted to change the Mr. Taylor: Not anymore. way in which MLAs were compensated for committee work. This was concurrent with the establishment of all-party standing policy Justice Major: It may incidentally when you support somebody committees. Previously standing policy committees had been in a Terry Fox Run or something like that out of your own pocket. populated by members of the government caucus only. What was But it is part of your salary, and the only thing in its favour is that approved was a pay rate of $1,000 a month for each committee on it’s paid by the federal government. which an MLA serves up to a maximum of three committees. Mr. Taylor: Yeah. But I can’t think of another job in the real 6:20 world where one-third of my basic gross income would be tax I don’t have the numbers in front of me, sir, but this was a exempt. Whether it’s being paid to me by the federal government radical change from what existed before, when we were literally or the provincial government or the municipal government, that paid a per diem rate or an hourly rate for committee hearings that money all came out of the same taxpayer’s pocket. It’s a benefit we attended. I will point out that at least this committee pay is that’s no longer required by us, nor is it available to our taxable. Committee chairs, deputy chairs: they are paid slightly neighbours, and since in practical terms it’s being used for a more. But here’s the thing, Your Honour. There are enough M302 | Appendices appendix 303 M t r -53 MLA Appendices | Appendices | year job.-year by the way, if I wanted to to I wanted if way, the by May 2012 Repo t, which is right across the the across right t, is which their constituents can easily free allowance,free the various - -a $210,000 to have my phone paid for as well, but I I but well, as for paid phone my have I’m averaging about $1,125 a month in in month a $1,125 about averaging I’m A couple of which? of couple A I understand you can waive it if you choose. you if it waive can you understand I Calgary : : you in partisan politics but by way of comment and and comment of way by but politics partisan in you Detailings, which can run you a fair amount of of amount a fair you run can which Detailings, Well, I’m not going to choose to do that because to I choose to going not I’m Well, keep my keepcar my clean. : to the fullest extent that you can, Your Honour, you you Honour, Your can, you that extent fullest the to : : ’t discuss the merits and drawbacks of the MLA transition transition MLA the of drawbacks and merits the discuss ’t Major Major Taylor Taylor just that they are exceedingly generous relative to what it’s to what relative generous exceedingly are they that just repeat absolutely agree with what you’re saying. If it’s a bona fide fide bona a it’s If saying. you’re what with agree absolutely rest to me as to whether you’re going to weigh in on those on those in weigh to going you’re whether to as me to rest So all that I’m saying, in pointing out these other allowances, is is allowances, other these out pointing in saying, I’m that all So I don’t submit, for instance, a bill for my housing costs every every costs housing my for bill a instance, for submit, don’t I I I won My point, Your Honour, is this. I believe good MLAs work work MLAs good believe I this. is Honour, Your point, My in so do to attempting in you to inherent a challenge is There I and oil and car washes. I’ve never taken advantage of it, but I I but it, of advantage taken never I’ve washes. car and oil and believe youcan even couple throw in a of detailings a year. I like to try to just Justice Mr. money. MLAs for reimbursements expense fide bona not are they that not but us to this. do costing actually residence capital for month a $1,890 get automatically I month. allowance. My rent on apartmen my included. parking month, a $1,010 is Legislature, the from road cost the cable, of cost the electricity, of cost the in add you When – apartment the in phone a having of take advantage of it, I could pay for it myself – that feel you whether know don’t I covered. be should it expense, for rates the whether determining to extends mandate your coverage are appropriate or not. That’s not even particularly of inte very are we that point, sir, a make to just trying I’m not. or things out in, to all it that the works take When you compensated. well - $200,000 a about of equivalent expenses to keep my residence in Edmonton, and I’m getting getting I’m and Edmonton, in residence my keep to expenses is hurting not are we So month. a $1,890 of tune the to reimbursed you. to saying I’m what guess I months of a couple in mine take to about I’m since allowance when the election is called. Justice should design MLA compensation to clearly reflect the work that that work the reflect clearly to compensation MLA design should MLA’s an of total sum the that declaring means that If do. they dollars Y or X dollars equals responsibilities and description job Mr. thatknew the base salary, the tax expense allowances, and the transition allowance allwere in place I was what knew much pretty I 2004. in elected first I was when transition the around controversy the including into, getting raise pay big whopping that was surprise real only The allowance. committee euphemistically, itself, calls that given all were we that pay. compensation their but compensated, fairly be should and hard to trying are you as independently, set be should absolutely rates that extent fullest the To heading. that you’re review this do with clearly to compensation their design should you achieve, can you that do so they that work the reflect determine that. only are MLAs that public the among impression an is there that in is session. Sir, Assembly Legislative the when working actually involve to not that with deal to way one that note I would record the for call say, oh, actually, to government the for be would impression weeks so or dozen a than more for session into Assembly the year.every to 70 hours a a hours 70 to and, yes, we do get MLA Compensation and Benefits Review – Review Benefits and Compensation MLA -party committee work, which I you should recommend that we be we that recommend should you ly not happening: well, sir, that is that sir, darn ly not well, happening: wer than it is for government employees employees government than for it is wer hear of car allowance, my only knowledge knowledge only my allowance, car of hear , KentSo Hehr.now our effective base salary for the next service interval. I would that say . . I don’t want to nitpick this, but the bona fide fide bona the but this, nitpick to want don’t I When I When . drive back and forth to Edmonton, plus my PHH PHH my plus Edmonton, to forth and back drive : : Yeah. It’s two things. It’s the kilometre rate, thewhich It’s kilometre It’s two things. Yeah. Agreed. I would certainly not sit here advocating that that advocating here sit not certainly would I Agreed. : : -Buffalo plus dollars a year for a job in the real world. So as to not not to as So world. real the in job a for year a dollars plus Edmonton on a weekly basis. Mileage from my door to to door my from Mileage basis. a weekly on Edmonton Major Major free free allowance. We work for the people, and belief my is plus the annual RSP contribution, which I’m led to believe believe to led I’m which contribution, RSP annual the plus - – Taylor Taylor Calgary Now, a philosophical question: as an occupation are we MLAs MLAs we are occupation an as question: philosophical a Now, to paid being all We’re pay. committee about thing the Here’s residence capital our on touched even haven’t I Honour, Your I will tell you that in my own situation I have to travel back and back to in travel that own tell situation have I you I my will REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | paid, but don’t make up stuff. This notion that we are each being being each are we that notion This up stuff. make don’t but paid, all this all for year a $36,000 paid is no longer $78,000 a year. It’s $114,000 a year, $26,000 of of $26,000 year, a $114,000 It’s year. a $78,000 no longer is t, is tax free. cen per 20 than more little a now or which, give principle, in probably, is: guess My a year? $114,000 worth do work We responsibilities. significant have We little. a or take 60 average us of most guess would I hours. long week. But there transparency is a issue here that goes well beyond the tax thatthe people shouldbe able tell to pretty much at a glance what er we’re actually and wheth doing for paid being we’re that is it that. determine you if Honour, Your meet. rarely that on committees sit of totality the for year a Z dollars X or are worth or Y MLAs that what is that then do, we what I which but interest public the in happening be should argue would large is you promise can near up. made allowance, our mileage allowance, plusour fleet cards to cover the – washes car and changes oil and gas of cost a conflict in be committees of the Legislature that every MLA sits on at least on least sits at MLA every that Legislature the of committees three; therefore, on that the day Members’ Services Committee raise. year a $36,000 imum us a min of one single every voted Member the and myself no, voted members committee two Only for you when calculation, my By about. you to spoken have others about of equivalent the making is MLA an in, that all add - 200,000 February 2, 2012 2, February both those service intervals probably average $300 to $400 when I take take I when $400 to $300 average probably intervals service those So car. nice pretty a have I and ones, minor the and ones major the on that. weeks eight every profit $700 a making I’m Justice the mean, I that. of out taken be should incur you that expenses back driving are you if but thing, one are sit don’t that committees bona a fide charge. that’s constituency, your to forth and Mr. it be taken from away MLAs. It is a bona fide charge. It is very though. compensation, generous to forth incidental of bit little a and back and office my of door the a reimbursement to translates usually Edmonton around travelling every $1,100 paid being am I So trip. each $275 for roughly of to weeks four card covers gasmy and allows tome geta very nice car wash whenever I want it. I have to car get my serviced about eight every up 8,000 ring to takes it long how about that’s because weeks in time kilometres Justice of that is so much a mile or so much a kilometre. What you’re you’re What kilometre. a much so or mile a much so is that of different. something or that than more something is describing Mr. lo is slightly MLAs for because alsowe get the credit card, the fleet card, to cover our gas REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-54 MLA Compensation and Benefits Review – Calgary February 2, 2012 or Z dollars per year, a lump sum that says to people, “This is the doing anything – and the Public Accounts Committee, and so on base salary of a Member of the Legislative Assembly of the and so forth. The Public Accounts Committee is one of the busier province of Alberta,” then, sir, do it that way and tax it all. If, on the committees. There’s no question about that. other hand, you choose to break it down into categories, please There are committees in addition to these standing policy make sure the categories reflect reality. committees. Some work harder than others; some have more Thank you. routine work to do, if you will, than others. The standing policy committees need either to have work referred to them by the Justice Major: Let me ask you about committees. Is there any Legislature, whether that be government or private bills, or a room for committees? I mean, I don’t think there’s any argument reference on a particular issue from the appropriate cabinet that if committees don’t meet, they don’t serve any purpose. Are minister. committees necessary as part of the legislative agenda? I’m talking The other possibility is that the committee itself can decide that about working committees. it wants to investigate something, but that, of course, requires the committee to come together and sit to discuss such things, and Mr. Taylor: They are desirable. They are advisable. There is, in my that’s at the call of the chair. The chair is a member of the experience, a level of partisanship that often expresses itself in the government caucus, and if the government is between leaders House that sometimes gets in the way of a collaborative approach to effectively or an election is approaching and there’s not much solving problems in the public interest that doesn’t show itself to the work to do or this excuse or that reason or those circumstances same extent in these all-party committees. They are smaller. They over there, there’s not much motivation to call the committee into are a little more collegial. I’ve seen them do some very good work. session. The committees could be working a lot harder if the will We have been through a strange couple of years in that there has was there. been a turnover of leadership both in the governing and the Official Opposition parties. The way I believe it has been expressed on the Justice Major: As the Assembly sits now, are there enough government side has been that there has been little government opposition members to have all-party members’ committees in legislation brought forward. Last year I believe we only dealt with any significant number? 17 government bills in the entirety of 2011. When there’s no legislation coming forward, no leadership in place because the old Mr. Taylor: You would get different answers to that question guy is waiting for the replacement person to be chosen, there’s not from different opposition members in different opposition much initiative to move ahead with an agenda that may be different caucuses, I think. If the committees were going full bore – and from the successor’s agenda, and then there is not much work for there is one time of year that they do, and that time is coming up the committees to do. But there could be more than was brought very shortly. The policy field committees, the standing policy about. committees, are all charged with specific government ministries, 6:30 and when we go through the estimates process for budget debate, many of those departments come before their particular standing This, I think, goes well beyond your mandate if I may be so bold policy committee, and their estimates are heard there. as to tell you what your mandate is. If there was some serious work When we go back into session next week and the budget is put into reviewing the rules and policies and standing orders of the delivered a week from today, I believe – Thursday, the 9th of Legislature in terms of how the Assembly does its business, if the February, is the date for the budget – those committees will start Assembly sat more weeks per year, if more time during that sitting to sit for a period of about four to five weeks. They will work on a time was devoted to committee work as opposed to having the regular basis. When the committees are sitting on a scheduled Legislature per se in session, if there was more time for private regular basis like that, it does become difficult for some of the members’ business, which is ideally suited for vetting by the smaller opposition caucuses to cover off all the work that they’re standing policy committees, and if the workload was in fact spread supposed to do with their critic roles. out over a longer period of time with regular opportunities for Remember, sir, we are assigned, and each committee is set up in MLAs to come back to their constituents, check in with them and terms of a certain number of government members, a lesser get feedback from their constituents, my opinion and that of my number of members from the Official Opposition, and then, party certainly is that we as a people would be better served by their frankly, a smattering of members from the other opposition MLAs. parties, the same smattering number on each committee, but the Justice Major: I take from what you’ve said that it would be hard actual players may change. We are all assigned three committees to justify the number of committees that presently exist. Even if at minimum, some considerably more. committees were working, there’s not enough work for three There you have it. That’s how the numbers work. Did that committees for every member. answer your question? I hope it did. Mr. Taylor: There has not been over the last two years. When the Justice Major: It came close. all-party committees were first set up, as I recall – and I would have Mr. Taylor: Okay. to go back and check the record – several months passed before any of them really started to do any work. But then they did, and for a Justice Major: I wanted to be clear on the capital allowance time there was a fair amount of activity. I think all the committees, you’re given for housing. There’s only the one – isn’t there? – in the standing policy committees, were meeting regularly. your case, your cost of living in Edmonton. Now, understand, sir, there are standing policy committees – there are four or five of them, I believe – and then there are other Mr. Taylor: There are two in a sense. It’s two parts of the same committees such as the Members’ Services Committee that I allowance. The housing allowance consists of the capital residence described, the standing committee on privileges, elections, printing, allowance when we are not in session. and some other thing, which hardly every meets – I mean, it goes years without meeting; it’s legendary in its ability to exist without Justice Major: Is that Calgary? M304 | Appendices appendix 305 M t r on -55 MLA Appendices | Appendices | it’s actually actually it’s I’ll start with: with: start I’ll May 2012 Repo be responsible as a citizen and speak of at 11 years ago I was a founding member of of member founding a was ago I years 11 at does for a living and deal with such issues as an an as issues such with deal and living a for does eas we’re not specifically getting paid for some some for paid getting specifically not we’re eas Thank you. Thank Calgary : ested in raising my issue in any form, such as a as such form, any in issue my raising in ested No. Just a thank you again for the opportunity to to opportunity the for you again thank a Just No. Thank you, Justice Major, for this opportunity to to opportunity this for Major, Justice you, Thank : o through my pieces here, my numbers. my here, pieces my o through the work that they do,” I think we would be serving the the serving be would we think I do,” they that work the : e. and deal with such things as committee pay, which is very very is which pay, committee as things such with deal and Major , your guidance,the guidance you’ve received from the – Taylor onable amount. onable Marks rilyn Marks rilyn I wanted to take the opportunity to tell you this since you gave gave you since this you tell to opportunity the take to wanted I system compensation the make can you if that opinion my is It you. Thank I’ll just g just I’ll th say also might I 30 a themselves voted Conservatives that is point second My committee pay for extra receive MLAs that third point is My MLAs date. to $18,000 approximately of total a to mpensation, or on three sit can Conservatives that is point last and fourth My Mr. Justice Ma present here. Some of what I’ve said perhaps is the opportunity to to opportunity the is perhaps said I’ve what of Some here. present and fair be to tried I’ve door. the out way on my things some say thing. a such is there if opinions my in at least somewha objective t into get to going even not I’m this. to speak to opportunity the me your up to that leave I’ll MLA. an paying be to ought you what wisdom that. with luck Good forth. so and on so and experts, clearer, more transparent, it make lineup more with what it is that an actually MLA more and clearer things making be would We that. doing in public and clarity of direction the in moving that think seldom I open. thing. bad a is transparency Private Citizen Private Ms speak. I felt it was dutymy as a regular citizen of Alberta and Calgary, that I needed to future. the in help might it that hope the in experiences my when MLAmy is paid a yearly salary torepresent her it is how case, my is which not, does but concerns constituents’ she salary when this yearly receive to entitled is she that justified inter not was or any motion, a raising petitions, our tabling statement, member’s left This addressed? issue our get maybe could we that way other feelingme abandoned and unvalued as her constituent. up to going been have I so Association, Grandparents Alberta the the Legislature quite often over these years and have presented in that add I’d thought just I on. so and committee justice the of front piec little per cent increase salary but later agreed it was too much. The last be should this feel I it. changing about nothing did Premier more a be to adjusted and Premier present the by addressed reas an example, an For meet. don’t committees the when even work which on Education, Committee Standing on the sits who MLA in month per $1,000 receives a year, over for met not has co committee. on a sitting while done not work for paid be not should Should the MLAs’ yearly salary and theirother benefits not cover sitting for paid be extra should they Why work? committee all these committees? more committees and are paid for being on each committee. They expense allowance that is no longer for expenses – salary do on actually we work of amount the to relative generous committees wher other task that we might perform, if you it can clearer make or just I what is “This Albertans, to period review your of end the at say per paid be should they is what this is worth; MLA an believe for annum a a – d with d with es, you are right. es, If are you MLA Compensation and Benefits Review – Review Benefits and Compensation MLA , for instance, you don’t get get don’t you instance, for , t this way spring. I’ve seen other years get the $1,890 on top of the $189 per diem. diem. $189 per the of top on $1,890 the get in Edmonton but was staying in a furnished a furnished in staying was but Edmonton in e or something like that in the spring session. spring the in that like or something e r the capital allowance? Does the per diem only relate to those people that that people those to relate only diem per the Does Well, Mr. Taylor, anything else? anything Mr. Taylor, Well, Edmonton. that? of out rent your pay You : : : : No. The per diem relates when we are in session to to session in are we when relates diem per The No. No, no. That’s for Edmonton. for That’s no. No, Yeah. Yeah. : : : : Major Major Major Major again, I would have to check the standing orders on this this on orders standing the check to have would I again, Taylor Taylor Taylor Taylor tice Here’s the thing if I may. I’m sure you wouldn’t be putting up up putting be wouldn’t you sure I’m may. I if thing the Here’s cy weeks,cy as we call them, when constituen our schedule We a have we that so out to work seems always it event, any In That’s for all MLAs except those who live within, I believe – believe I within, live who those MLAs all except for That’s When we are not in session, we have if property a orlease a in payment monthly a from switches that session, in are we When diem per the that is course, of diem, per the behind theory The I’m not sure what the term is there: a residence, a lease, or REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | to bill $189 for a sitting day because it’s presumed that you’re you’re that presumed it’s because day sitting a for $189 bill to eating you’re and residence, principal to your home going event. any in buying be would you groceries Mr. I sorry. I’m allowance. capital the for qualify who people those more live who those of terms In question. your misunderstood y the Legislature, from than kilometres 60 -Centre Edmonton for MLA the you’re Jus All you have to do is sit 10 working days in a month and be off for for off be and a month in days 10 working sit do is to have you All money. your doubled just you’ve and more or days 10 working Justice have qualified fo mortgage or deed – deed or mortgage to designed is diem per The that. like something or hotel a or suite in stay your of cost the paying towards way long a go to or pay associate meals the and night particular that for Edmonton dry some have, might you that cost incidental other any and that thing. of sort that and cleaning with some of these theatrics from ifme we were in a courtroom, ng. are thi the Whenwe inhere’s session, but sir, there is a little Legislature the if that says that orders in standing the clause capital the then is, it believe I days, eight than more for adjourns residence allowance in effect kicks back in. 6:40 basis. off week one on, weeks three roughly a on session in we’re we until apparently, will It way. that out work always doesn’t It be, will that whenever spring, this writ the of dropping to the get tha much pretty out work where we’ve come into session, we’ve been in session for two then four, for back we’re then week, one for off we’re then weeks, and one, for off we’re five, for back we’re then two, for off we’re we come back for on 10 days, 10 to up adds actually which break week constituency that what know you and sitting, we’re while not sitting we’re days means.It means we Mr. February 2, 2012 2, February Mr. Justice Justice and, Legislature. the of radius 60-kilometre that’s believe I that. for month a $1,890 paid are we Edmonton, but it will very modestly, year fiscal next the in up go to scheduled go uplittle. a hasbeen It frozen for thelast three I years, believe. bill can we session, in we’re that day Every $189. of diem per a to $189. for Mr. residence temporary a have not does who MLA any to applies also – REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-56 MLA Compensation and Benefits Review – Calgary February 2, 2012 can be on as many committees as they wish. I feel that my MLA, superintendent after 30 years of service. During my 30-year career as a Conservative, has made sitting on committees her priority, not I was employed in the commercial crime field for 17 years, four of representing me as her constituent. Now, I speak to that because which were at the national level. During that time I oversaw all the when she was running for re-election, many times I would go to criminal investigations of politicians across Canada conducted by her forums and she would speak extensively about the wonderful the RCMP. I have witnessed professional people, including work she was doing on these many, many committees, but at the lawyers, doctors, accountants, businessmen, and politicians from same time she would not take up our cause or, you know, all parties, engaged in criminal activity. No one is above the law, represent me in any way. Opposition members can sit on up to nor is anyone not susceptible to breaking the law when an three committees. Being a Conservative, she can go on as many as opportunity presents itself. One of the overriding fundamental she is able to choose to go on. I’m wondering: why is there a factors in most cases is the lack of transparency and discrepancy here, when a Conservative member can go on as accountability. many committees as she chooses, but the opposition parties can After I retired from the RCMP, I was employed by a major only sit on up to three? international oil and gas company and travelled extensively to a That’s basically what I came to speak to as a regular citizen of number of countries that rank very high on the list of the most Calgary and Alberta trying to be responsible but also as a corrupt countries in the world. I have seen first-hand the founding member of an organization which has tried to change the corruption that exists in those countries that do not have high Family Law Statutes Amendment Act and, previous to that, the standards of transparency and accountability. Family Law Act because there are inadequacies in that act. It The present system in Alberta allows the Premier to be paid treats some grandparents differently than other grandparents, from both the general revenue fund and the provincial party which depending on what situation their grandchild lives in. As I say, my she or he represents. All MLAs are paid a base salary and then are MLA would not entertain representing my issues, so I had to go on a commission-based system, where they are remunerated for shopping for other MLAs who’d be willing to help me, and that the number of meetings or the committees that they attend and left me feeling pretty not valued by my own MLA. other ways in which to raise their level of pay, including providing Before I came here, I went to interview an MLA who is leaving, MLAs with a tax-free portion of their salary. I did hear your who is not going back, and he told to me say: when you are comments and the exchange that you had earlier on. making your recommendations to the Assembly, sir, we would Also included in this type of top-up are the benefits accrued to request that you use your own personal experience and discretion, the MLAs when they leave office. The first speaker tonight did not anyone else’s, when deciding on what compensation and not address that point. The present golden handshake is well benefits are justifiable and deserved. beyond what the average Albertan receives in their employment Thank you. and must be changed. Additionally, the tax-free portion, something no other Albertan 6:50 receives, should be terminated. This approach lacks transparency Justice Major: Thank you for coming. and credibility with Albertans and gives rise to the potential for abuse. Ms Marks: You’re welcome. I would suggest that the average person in Alberta would not know how much any MLA is actually paid even though they’re on Robert Kells the public payroll. What I can say is that where there is a lack of Private Citizen transparency and a lack of accountability, there sometimes is the Justice Major: I got your submission, so I’m partway there. perception of corruption, whether it is real or simply perceived. The hallmarks of a corrupt society are often the lack of Mr. Kells: Well, thank you very much, Your Honour. transparency and accountability. The present system in Alberta does just that. It gives the taxpayer, the person who is footing the Justice Major: You’re here as a right. bill, the uneasy feeling that politicians have something to hide when they pay themselves in this type of convoluted manner. I Mr. Kells: It’s nice to be here and nice to hear what others have to realize there is a reporting of sorts on the amount of money that say. I have this presentation. I will go through this, and if there are they are receiving, however not to the degree or the manner that any questions at any time, of course you can stop and ask me. should be demanded or required by the taxpayer. Some of what you are going to hear tonight you’ve already heard During the last number of years the Premier has been paid by from Mr. Taylor. Nevertheless, I would like to address you today the taxpayer both through a salary process as well as a top-up with respect to the process through which MLAs are being from the party in power. The present system often begs the compensated and offer an approach which I think will better serve question: why does the Premier not want to divulge what he or she the MLAs and the Alberta taxpayer. is receiving from the provincial party? For what reason is the party I’m not going to address the amount of remuneration each MLA funding her expenses or salary? Is the Premier working for the should receive other than to say that their remuneration should be party or for the citizens of Alberta? What is he or she providing in commensurate with the compensation of others in Alberta and the return for these payments? While we do not know the answers, rest of Canada who have similar responsibilities in federal, there are many scenarios one can speculate on. provincial, and municipal governments. I know there are more How much and for what reason the remuneration is given is not qualified people than I to be able to address the issue of the actual known. What is known is that the time is ripe to dispense with this dollar amounts. What I am most interested in is seeing that the type of process. The taxpayer is footing the bill in both instances. process is one that is independent of the elected representatives Either it is through the direct taxation process, a salary from the and is both transparent and accountable to Alberta taxpayers, general revenue fund, or indirectly through tax credits given to neither of which is the case today. those who fund political parties. It matters not how the funding is I’d like to begin by stating that I’m a former member of the received; the taxpayer is still paying the salary and/or the Royal Canadian Mounted Police, having retired at the rank of expenses. M306 | Appendices appendix 307 M t r -57 MLA Appendices | Appendices | romgeneral revenue. May 2012 Repo last paragraph you that say a total ieve there’s anything wrong with that as that with anything wrong there’s ieve sector universe. What do you mean by by mean do you What universe. -sector rent things that keep the parties active, there you’re referring to referring comparators. you’re On the political side, when politicians go to to go politicians when side, On political the I’m not familiar with how the final cheque is cheque final the how with notI’m familiar You raised a number of points, but I’d like your your like I’d but points, of number a raised You Her responsibilities as Premier, leaving aside the There’s one other point, Mr. Kells, and this is just just is this and Kells, Mr. point, other one There’s At the moment how is she paid? she is how moment the At So Okay. Thank you very much. very you Thank Okay. Calgary : : : : : : : : I don’t know. I’m only assuming that she gets paid paid gets she that assuming only I’m know. don’t I No, I don’t bel don’t I No, Right. That’s my understanding. my That’s Well, I guess if I go back to my former occupation as a That’s right. That’s Versus? : : : : : : : where Alberta can show great leadership by redefining redefining by leadership great show can Alberta where Major Major Major Major Major Major Major Major ells Kells Kells K Kells Kells Kells Kells ybe someybe larger municipal governments and define the Alberta has led the country in many respects, and this is another another is this and respects, in many country the led has Alberta Those, Mr. Major, are the points that I wanted to cover. to wanted I that points the are Major, Mr. Those, approach is currently in place in the city of Calgary for for Calgary of city the in place in currently is approach mayor. the and councillors city for compensation determining example the process for MLA compensation. MLA for process the Justice opinion on the value of having salaries paid f paid salaries having of value on the opinion Mr. Justice written, but I see that you say that the Premier should be paid from from paid be should Premier the that say you that see I but written, general revenue. Mr. Justice Mr. from the general revenue fund and that part of it comes from the the from comes it of part that and fund revenue general the from do we reason what for and amount the power, in party provincial know. not Justice politics for a moment: to your understanding that portion comes comes portion that understanding your to moment: a for politics from general revenue? Mr. Justice conventions and diffe and conventions are expenses involved in that, which, I presume, the Premier is a it’s but that, know don’t I party. the by for compensated that? with wrong anything there Is assumption. reasonable Mr. long as it is transparent and accountable. So that would have to be be to have would that So accountable. and transparent is it as long Premier the that know to ought people The number. published a provincial the from compensation in dollars of X number received party. Justice - second your In clarification. for developed be should methodology benchmark compensation public a includes which that? Mr. police officer, the salary was looked at for a number of different policedepartments across Canada, and collectively they RCMP. the of a member for be would salary the what determined be to want not did they but place, first in be to want not did They in eighth place.believe I thatthat at there time were eight in the could They here. happen could thing similar a think I universe. take a number of salaries basedon theother provinces as well as ma to. It salaries towas their trying compare they that were universe on something based be should salary the that understand to easy air. the of out number a pulling somebody than other Justice Mr. Justice This prohibiting prohibiting ch throughout the the throughout ch s case there couldbe d I see two types of of types two see d I perception of a hidden hidden a of perception MLA Compensation and Benefits Review – Review Benefits and Compensation MLA -sector universe from other and accountable. Firstly, including the MLAs, all Firstly, and accountable. The salaries, of course, should be set at appropriate an -read format. -to plemented without political interference. I believe a similar similar a believe I interference. political plemented without For far too long there has not been the openness and and openness the been not has there long too far For is level provincial the in at Alberta to missing be appears What Thirdly, to discourage an MLA from receiving any type of of type any receiving from MLA an discourage to Thirdly, Secondly, at the end of the fiscal year an annual report should should report annual an year fiscal the of end the at Secondly, A total compensation benchmark methodology should also should be methodology benchmark compensation total A Now, sir, I wish to be very clear that I am not suggesting that that suggesting not am I that clear very be to wish I sir, Now, be would I difference? a make will that solution the is what So REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | this type of action, with an administrative penalty to be paid by the the by to paid be penalty administrative an with action, of this type In received. money of amount the twice of offender receiving should office constituency the and/or party provincial the addition, be penalized an equal amount. In this regar and, MLA an to paid is amount illegal an where one, penalties: the where Even payment. a such report to failure the two, the of expenses the for pays office constituency or party provincial thi In reportable. be should amount this MLA, be would $100 than greater amount any as: such limit base a all to is keep It reporting. the is essential is What reportable. payments transparent and accountable. including ensation, comp total their on based be should philosophy responsibilities increased for amounts additional salary, base the and leaders, opposition and Premier, the ministers, cabinet as such entitlements. and pension benefits their all many In compensation. MLA of transparency process of the instances it takes a request for access to information for this to a be should There necessary. be not should This known. become the all, After information. this of reporting public for requirement taxpayerknow. has to the right absolute of principles the outlines that philosophy compensation clear a how elected representatives are to be compensated. level to ensure that all MLAs are paid appropriately thefor paid appropriately MLAs all that are to ensure level should Albertans however, perform; to have they responsibilities know the remuneration that each is receiving in a clear, precise, and easy agenda, a perceived conflict, orperceived corruption. constituency parties, provincial their of any from remuneration passed be should regulations sources, other or offices, all to whichever, newspaper, daily a in published or provided be Albertans, indicating the salaries paid to each of the MLAs paid to ea of expenses the list a with together year. Perhaps there should also be a reporting of the different different the of reporting a be also should there Perhaps year. meetings held and the attendance of the MLAs at those meetings. I transparency the both addressing to way long a go will this believe any remove and issues accountability and Premier, should be paid their entire remuneration from the general general the from remuneration entire their paid be should Premier, constituency party, provincial a should time no At fund. revenue these of one any funding be source other any or association, individuals. 7:00 public a includes that developed addition, in and, governments municipal and provincial, federal, of similar in terms in Alberta realities economic the reflects private the and public the both in opportunities employment public, made be should universe this of composition The sectors. annual the determine then would universe the to comparison a and increases for elected representatives. The process needs to be at arm’s length elected from representatives and the results im ofany thePremiers or any of the MLAs have received any money in a corrupt manner. However, the present process does leave the personal and observations my From happen. to that for open door experience, once there is a loophole, itbe can taken advantage of. workable, is believe, I which, solution a provide not did I if remiss transparent, February 2, 2012 2, February REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-58 MLA Compensation and Benefits Review – Calgary February 2, 2012 Mr. Kells: I’d just make one other comment, sir, because of what think Alberta seniors feel about this review, especially those who I’ve already said. are held to fixed incomes and very low inflation increases? Believe me, they have very little faith in the system. In fact, many Justice Major: Go ahead. Albertans appear very skeptical even about this process. Mr. Kells: It just happened by coincidence, obviously, that I 7:10 picked up the latest edition of Maclean’s magazine, dated I would be inclined to suggest to you that in order to set a fair February 6, 2012, and I see that the former leader of the Bloc base for compensation and benefits, you may want to go back to Québécois, Mr. Duceppe, is under investigation for using the year 2008, when former Premier Stelmach awarded MLAs the parliamentary funds to pay his director general, which was most generous and very irregular and, yes, the highest ever inappropriate. The reason I want to just bring that up is that it compensation and benefits package, a package that was so happens to everyone; nobody is above the law. I’ve seen this thing attractive that even opposition leaders accepted it very gracefully time and time again while I was in the police force. and without the normal opposition comments that one would Justice Major: Wasn’t the same person, Duceppe, also in trouble expect from those leaders and their party MLAs. That’s how good for writing a book out of his office in the Commons? it was. Having established a 2008 base, you could add more reasonable and acceptable inflation increases from 2008 to date, to Mr. Kells: Well, it mentions that in here. 2012. That change alone may allow Alberta citizens to buy into this compensation and benefits review process. Justice Major: Not that it matters much. I take your point. I’ve talked about the huge MLA pay raises and increased benefits in 2008. As far as the benefits are concerned – and, of Mr. Kells: No. That’s right. He was paying the spouse of his chief course, that becomes part of the salary as well – as was the of staff and allowing her to use parliamentary resources as she practice prior to 2008, I strongly suggest that MLAs serve on produced a book commemorating the Bloc’s 20 years in Ottawa, committees without extra pay. Having served city council for 18 again using taxpayers’ funds inappropriately. years, I served on many city standing committees and many other Justice Major: I take your point. Thank you. committees, always without extra pay. The only exception was when I served on the hospital board or the Calgary Regional Mr. Kells: Okay. Thank you. Planning Commission. In that case I would receive an honorarium. I understand that cheques are issued and payments accepted by Justice Major: Mr. Schmal, you’ve turned grey since I saw you MLAs for attending meetings but that payments are also accepted last. even if they do not attend these meetings. Members of the public Mr. Schmal: Well, I notice that you have a few less hairs than want to know if such handouts are really ethical, and many also when I saw you last. I think it was in the late ’70s, when we wonder if honesty may be in question. I’d like to say to you that worked together on a civic matter that was very important to many even if I was sitting there as an MLA and received that pay for a citizens in this city. so-called meeting and in my heart I knew that I wasn’t there, that I didn’t attend that meeting, I’d have every option to return the Justice Major: And they never did build that agricultural centre. cheque. As a politician if I felt strongly about it, I think I would return that cheque. I don’t see them doing that, not even the Mr. Schmal: No, they didn’t. members of the opposition, and that really surprises me. Then we get down to the matter of inflation increases. For 2012 John Schmal Alberta seniors – and I think you probably know this because Private Citizen you’d be a recipient – will receive . . . Mr. Schmal: Your Honour, I’m very happy to be here before you Justice Major: Do I look that old? to give you a couple of my comments. You might be aware that I was a member of city council for 18 years. I retired in October of Mr. Schmal: No, you don’t, but I think you’re with me on that. 2004. Our mutual friend Milt Harradence wasn’t there, obviously, I’m there. but his articling friend Alain Hepner did come. I was very pleased We’re going to be receiving a 2.8 per cent increase in the to have him there. I just thought I’d mention that. Brings back Canada pension plan payment, CPP, while MLAs received a 5.35 some real memories. per cent increase, almost double, tied directly to annual In any event, coming back to the issue of the reviews, the adjustments in average weekly earnings for Alberta workers. independent reviews of compensation and benefits almost – and I Robert Remington, a writer for the Calgary Herald, has made it say almost – never seem to recommend reductions in com- very clear that using the annual adjustments in average weekly pensation and benefits packages. Instead, the beneficiaries, in this earnings for Alberta workers, which has an inflation rate case the MLAs, likely anticipate that your recommendations of established by Stats Canada, is not appropriate. If senior citizens this review will produce an overall increase in the compensation are tied to a Stats Canada inflation increase of 2.8 per cent, so and benefits; in other words, a positive outcome for them. Similar should politicians, and that includes city council here in Calgary. reviews by consulting firms for CEOs and upper management of public services and also private-sector ones never seem to Justice Major: Does that 2.8 per cent track the rate of inflation, recommend reductions in compensation and benefits packages. If or is that just an arbitrary number? they did, they would likely not be in business very long. In your case, Mr. Chairman, you likely would not have to worry about Mr. Schmal: Well, it’s a way of determining what has gone up that. and what goes down. I’m really here on behalf of seniors. I’m an advocate for seniors, and I’ve been working with them ever since I retired. How do you Justice Major: But do they look at the cost of living? M308 | Appendices appendix 309 M t r -59 MLA Appendices | Appendices | cellphones, comment; that’s that’s comment; ing not only MLA noting only ase stop at any me c Income Guarantee r presenters. Since 2008 May 2012 Repo pay. I’mpay. Kelly Ernst. I’m been printed yet, but it hits the same same the hits it but yet, printed been . Yeah. That’s fine. I just want to get my copy. Give it to us, and we’ll put it up on the web ahead ahead web up on the it put and we’ll us, to it Give Good evening. Did you file a paper? a file you Did evening. Good This lady right here. right lady This Well, it’s good see to you again, Mr.Schmal. I thought I saw yours. saw I thought I Well, thanks for coming. for thanks Well, Calgary : : : : : : : Thank you once again for listening to me. It was a was It me. to listening for again once you Thank I’d like to present you with a copy. In fact, I’d also also I’d fact, In copy. a with you present to like I’d Okay. Whom could I give this to? this give I could Whom Okay. First of all, let me begin by thanking this thanking you for let by all, me begin of First : : : : Good evening, Mr. Major. Mr. evening, Good : : I did. : I : I’ll go through the paper. the through go : I’ll : Major Major Major Major Major Major Major -chair of the North American Basi Ernst Ernst Ernst Ernst Schmal Schmal Schmal I’d like to begin by giving a little bit of context about why I’m why about context of bit little a giving by begin to I’d like My recommendations will really be concern With today’s technology, that includes computers, includes that technology, today’s With That’s my presentation to you. to presentation my That’s 7:20 Justice Justice Mr. pleasure seeing you. Justice Mr. Calgary Herald Calgary the of Mr. Justice Mr. Justice Mr. Justice Thank you. Thank Kelly Ernst Citizen Private Mr. pay but focusing in on the fairness of that pay and giving giving and pay that of fairness the on in focusing but pay base to how particular in comparators, around recommendations actually I’ll presenters, previous your of couple a Unlike pay. that to ple as well offer I particular. in that target your answer to happy than more I’m questions. for point questions. it’s because manner this in it doing I’m why and this doing othe your than think, I different, slightly opportunity to speak about MLA about speak to opportunity to you for fair it’s think I but person, private a as today presenting my in and volunteerism with involved been I’ve that know professional role on committees such as Basic Income Canada. I am co the and income on studies of number a led I’ve Congress. on people with consulted have and Alberta in downturn economic this basing I’m experience this Through well. as subject the presentation. population of 1.2 million people, is served by 14 aldermen versus versus 14 aldermen by served is people, million 1.2 of population looking now We’re election. next the in 26 MLAs and 23 MLAs double. almost It’s 26. 14 versus at MLAs so minutes, within contacted be can constituents faxes, more substantially and areas larger on much take to able be should not is this that aware I’m Albertans. representing in population a that make I’d thought just I review. the of part all. Justice Mr. to Calgary the Herald wrote I letter a of copy a you to give like hasn’t It recently. just very area. il ans . . . -elected. Based on MLA Compensation and Benefits Review – Review Benefits and Compensation MLA -do people be may expected dollar severance packages for - -to aking advantage of maximum -well The question is: why should there be be there should why is: question The -old bread because that’s the type of -so -living increase. xample is that the city of Calgary, a with Calgary, of city the that is xample -of it may be appropriate for me to mention that that mention to me for appropriate be may it Well, that’s what caused some of the furor It determines what they’ll allow, and that’s why why and allow, that’s they’ll what determines It You’re not saying whether that’s right or wrong. or wrong. right that’s whether saying not You’re Is there limit any on council? city They give you Regardless of how many years? : : : : : I’m just simply saying that you have some way of way some have you that saying simply just I’m It doesn’t twofor how Ityears. many say just says: That is correct. wances towards mortgage payments on homes they they on homes payments mortgage towards wances The cost That’s correct. That’s correct. I’m not saying that that’s that notI’m saying correct. That’s ey hadey received three months for every year they : : : : : : l Major Major Major Major Major Schmal Schmal Schmal Schmal Schma Schmal You know, there’s a saying that we all buy the same loaf of of loaf same the buy all we that saying a there’s know, You In regard to severance packages andother benefits Albert In summary, it is time that governments cut back on their own own on their back cut governments that time is it summary, In I wanted to that say get Edmonton of outside live who MLAs many Also, REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Mr. February 2, 2012 2, February Justice the 2.8 per cent? per 2.8 the Mr. will be purchasing multigrain purchasing be multigrain will politicians that it appears but bread, not and seniors while bread two inflation rates, one for seniors and other people and another another and people other and seniors for one rates, inflation two a much at them benefit obviously would That politicians? for per 2.8 versus on $100,000 cent per 5.35 apply To income. higher difference. the quite is $6,000 on cent resent the handouts of multimillion handouts the of resent re get do not who MLAs or MLAs retired be should and sweet too are packages the outcry, public or policy counc City example. an you give could I substantially. back cut provincial the with year; per months two gives Calgary in here government it’s three monthsperyear. Justice serve? you year every for year per months two Mr. Mr. months for every year. Justice Justice increases that they will be receiving. to consume discounted, day discounted, consume to served, and in cases where they served for 15or20 it years, true same the Is money. of amount substantial very a to amounted 20 get you 10 years, for there you’re if that council, city of months? Mr. recently, when for the MLAs that were retiring, it became public th that news Justice good start is for government representatives like like representatives government for expenses, is and start good a own their in back cut to Parliament of Members the and MLAs backyards. Some other provinces have far fewer MLAs per capita reducing be should we MLAs, adding of Instead Alberta. than e good A numbers. those I’m not asking you. I just wanted to be clear. be to wanted just I you. asking not I’m Mr. comparing. and pension -plated gold to applies outcry public same the severance packages given toMembers of Parliament, the same of type some have contributions RRSP that understand I problem. t when and formula, matching government living allowances, and understand I these MLAs can use those allo That Edmonton. in home a second up end with many so purchase, benefit. good very a obviously, is, it and asset, considerable a is allow to funds reasonable accumulate should that contributions, for decent a very retirement for MLAs. REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-60 MLA Compensation and Benefits Review – Calgary February 2, 2012 and the economic downturn considerable debate has been sparked everybody’s income and dividing it by the total number of people about how Alberta has fared economically. For many of us in in that group, but the problem with average income is that average Alberta there was no impact, for many it was quite substantial, and income can actually increase while the upper income people do many people did well. There is no one particular way that you can really well and everybody else does not or even the lower income say that the impact since 2008 has been in one direction, but in people do poorer. retrospect, when you actually look at the stats and you actually go beyond the economic downturn, one thing that you can say for Justice Major: I understand average, and I understand median. sure is that over the past few decades and the last decade in particular there have been particular groups that have not fared Mr. Ernst: Median is the same way. Median income can also do well, that have not gone through the booms that Alberta has gone the same thing, so again I wouldn’t suggest that. through and done particularly well. Many of us just have not kept Where my presentation actually goes is to look at the bottom- pace. rung people, the people in the lower fifth cohort. It’s those people, In fact, the economic difficulties that we are having now simply I think, that are a group that we can pay particular attention to. accentuate the people that are living with difficulty in the lowest From a statistical standpoint when the lower groups in our society levels of income in Alberta and the difficulties that they’re having. do better, typically all of us do better, not only in terms of our For them, the economic advantage of being in Alberta simply has income, but also there’s a whole level of costs of poverty to our not crystallized whereas in other cohorts that isn’t true. In the society that we also should take into consideration. I didn’t put upper incomes, of course, the advantaged have done very well. many of those types of costs into this report. I may later in the They’ve done very well. Others in the middle may have done a final submission. But when we attach MLA pay to these lower little bit better, but I think we have to take into account that we levels, I think that is a particular type of policy that might have saw the cost of living also increase, so any gains that many of the actual promise. middle-income people have seen have not crystallized either. So 7:30 there’s been this growing disparity in Alberta. Justice Major: Have you done any figures on that? The media story in Alberta that we’re all doing very well in this province really is not substantiated by the data. The statistics on Mr. Ernst: Yes. I’m going to get to that now. income growth for each of the cohorts doesn’t back up that myth What I’m not suggesting is that any MLA be paid minimum that Alberta has equally benefited. It’s simply not true. Economic wage. I think it is fair also for MLAs to be paid well for the level disparity in our province is growing. and responsibility of the work that they do. I have no problem Justice Major: I accept that, but I’d like you to tie that in to the with that. What I would suggest is to take a look at the lower level MLAs. There’s no doubt in my mind that what you’re saying is cohort, the lower one-fifth, and look at the ways in which that true. group is compensated or the way in which you can compare MLAs to that particular group. Mr. Ernst: What I’m going to be forwarding is an idea about: Two ways come to mind. One is minimum wage; the other is what comparators do you use to ensure that MLA pay and the low-income cut-off. When you actually take a look at minimum policy around MLA pay are not done in such a way that it wage and you calculate out what minimum wage is annually – it’s accentuates the economic difficulties that people are having and about $18,500 per year – it’s very similar to the low-income cut- reinforces politicians for making policy decisions to accentuate off, slightly less but a little bit lower. When you compare that to that pay? the MLA wage, so you take just the indemnity and the tax-free The recommendations I would like to forward really do talk allowance, that’s slightly four times greater than minimum wage. about these comparators. One of the comparators that keeps The Premier’s pay, for example, is 12 times that rate. When you coming up is a comparator to other provinces. I would suggest that take into account the average MLA, according to the Canadian MLAs here in Alberta are not competing for positions in politics Taxpayers Federation it’s seven times approximately. So if you in New Brunswick, Ontario, Quebec, or any other province, nor were to tie the MLA wage to minimum wage through a factor, you are they competing for political positions outside of Canada. I’ve could also say: well, MLAs get paid always seven times the rate of seen people saying: well, we should compare it to, you know, minimum wage, and the Premier, if you keep it constant to now, places like New Zealand, states in the United States, or 12 times, and then the various levels of deputies and ministers and somewhere in Europe. I think those types of comparisons are so on could be paid in between, again, as factors to minimum incorrect. Politicians in Alberta, as you know, are only able to wage. work here. They’re only qualified to work here. It’s the workers of Part of the reason I’m also suggesting this is that I’m also Alberta, really, that politicians are competing with, and that is the forwarding the principle that MLAs should really be paid no comparison that we should be making. differently than other Albertans. There shouldn’t be one way or Ideally, also, political representatives act for the entire public, method of paying MLAs and then another method for just Joe from every walk of life, every type of position, so another type of Average in our society. We need to be compensated fairly and comparator that I think is completely valid is to again look at equally in terms of the method that we get compensated as well. Martha and Henry Alberta and not necessarily pick one particular I would agree with some of your earlier speakers on a number profession such as an administrator, a professional role – doctor, of other points with respect to how MLAs are compensated; for lawyer – and so on. I think that is also in many ways quite example, the tax-free income. Albertans have to pay taxes. When I inappropriate. or you or anybody else in Alberta earns money, we have to file Another comparator that often gets used when you take a look taxes and pay taxes on that income. at Albertans as a whole are three different ways of looking at the different cohorts. One of those ways is looking at average income. Justice Major: You’ve been here, and you’ve heard the I would actually suggest that average income is also an incorrect discussion about the fact that it’s income tax exempt by the federal way of looking at it. As you know, average income is taking government. M310 | Appendices appendix 311 M t t r -61 MLA Appendices | Appendices | mple for for mple -free allowance, it’syes, May 2012 Repo really going on there. I would would I there. on going really fifth. If you look over time, there’s there’s time, over look you If -fifth. do understand the that fact we have a he MLAs should be paid a multiple of that, have have that, of multiple a paid be should MLAs he Do you think seven is too much? Have you you Have much? too is seven think you Do To be fair to Mr. Speaker, you know, he was an was he know, you Speaker, Mr. to fair be To I understand what you’re saying. I just wanted to to Iwanted just saying. you’re what understand I Okay. Well, take the whole thing. whole the take Well, Calgary : : : : : Well, no. I would not consider anecdotal evidence evidence anecdotal consider not would I no. Well, Yeah. certain I’m of that. However, the risk is that I think the current level of pay should not exceed or or exceed not should pay of level current the think I or The final point I would like to address has to do with do with to has address to like would I point final The Well, it depends on what you include in that particular that in include you what on depends it Well, It would be seven. It’s more around seven. around more It’s seven. be would It . : : : : : : . . Major Major Major Major Maj Ernst Ernst Ernst Ernst Ernst Ernst fifth and the highest one highest the and -fifth The figure of seven is interesting because in some research tha research some in because interesting is seven of figure The I think people in Alberta think people I If you go to the Alberta Treasury website at the moment and and moment the at website Treasury Alberta the to go you If by one salaries MLA list does website Treasury the Although Let me back up a little bit. When you speak of the lowest lowest the of speak you When bit. little up a back me Let 7:40 Mr. politician who’s giving great public service to the province and and province the to service public great giving who’s politician average an what than degree higher a to reimbursed be should who paid. get might person go beyond what MLAs are getting now. If it starts to go beyond beyond go to it starts If now. getting are MLAs what beyond go that particular level, then thinkpeople I start to that feel there’s an unfairness. or an done being injustice or cohort of sort lowest the between figure common a is figure one this figure of seven that often divides those cohorts. So that’s not a a not that’s So cohorts. those divides often that seven of figure this honest. quite be to use, to figure bad Justice Mr. how the general public is informed about compensation. I would would I compensation. about informed is public general the how and transparent be should compensation that idea the forward also si very be should It disclosed. proactively routinely understand. to Albertans and MLAs of list the and compensated are people how at look you for complex too far it’s that say would I compensation, their of all is what grasp to people most transparent more it is paidget so that MLAs that the way simplify and compensation total The citizens. all to understandable and be to needs think I as well expenses receipted for reimbursement clarified. There needs tobe much greater detail aboutthatbecause think I side, expense receipted the on put gets detail little too when are politicians how about cynicism and questions invites simply it reimbursed. being be to needs there think I expenses, receipted the of some and one far greater simplification with respect to their general or salary Mr. necessarily something to fall back on. Justice MLAfor 20 years. It’s hardly anecdotal. It’spretty real. Mr. when you go into politics, you know that going in. going that know you politics, into go you when Justice be clear. t that and income think I be? should multiple the what mind own your in settled you it think do you What times. four presently it’s that said you’ve be? should Mr. reimbursement. For the indemnity tax and indemnity the For reimbursement. to pay of pieces other the then, include, you if but times, four actually Justice Mr. Justice formed an opinion on what the multiplier should be, not what it is is it what not be, should multiplier the what on opinion an formed be? should it think you what but , MLA Compensation and Benefits Review – Review Benefits and Compensation MLA ave receiptedave expenses in you think it would be preferable to to preferable be would it think you day work, then I have no problem with with no problem have I then work, -day uld be treated similarly. treated be uld -to effect,n in mind my politicians are very l, if you at look Mr.Speaker’s evidence, he Well, except we have heard evidence that the Wel it that take I Well, what about money they actually expend? actually they money about what Well, : : : : hing I’d like you to consider with respect to the the to respect with to consider you like I’d hing Yes.have presentation thatI my in as well. they If I would poke holes a bit in that evidence, and I’d like like I’d and evidence, that in bit a holes poke I would Yes. Yes. : : : : dipping. I’m not in favour as well for committee work work committee for well as favour in not I’m -dipping. Major Major Major Major dipping, and I think that doesn’t serve Alberta well in in well Alberta serve doesn’t that think I and -dipping, Ernst Ernst Ernst Ernst Another piece of the payment, of course, is the expense expense the is course, of payment, the of piece Another The other piece of this is sort of dual compensation for the role role the for compensation of dual sort is this of piece other The The idea of excessive compensation has also come up. up. come also has compensation excessive of idea The t other The at seems to occur at the moment. However, that being said, I REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Mr. February 2, 2012 2, February Mr. forgo that tax advantage and let theprovince the pay difference? Justice allowance. Most Albertans certainly don’t have an expense allowance, so MLAs sho Justice Mr. that, including giving invoices for the number of miles that they they that miles of number the for invoices giving including that, of types Those vehicles. personal their in driven have may nd that, beyo where there Anything fine. are think I expenses doesn’tneed tobe a receipted expense or there’s no receipt being inappropriate. is think I submitted, double or to be reimbursed separately from the core of an salary MLA or the is there that public the to appears simply It compensation. core double put we when system democratic whole our in confidence of terms period, set a for in going They’re worker. a contract like much no there’s but period, particular that for reimbursed getting have to going they’re that ended has period that after guarantee contract the any renewed.dropped, is basically the writ After that if only contract new a into we’re now and done, is contract allowances. transition be not should there So renewed. gets contract going that politician, the including knowledge, everybody’s in It’s that risk. take le ro you a such into Justice have receipted expenses, I have no problem with that, and I think think I and that, with no problem have I expenses, receipted have h if Albertans most Again, fair. is that day their of course the in else no one that payment of a method having as MLAs forward Alberta seems to get. Whenever politicians become millionaires any by type of cynicism raises it simply getting, they’re that compensation of conduct ethical and integrity the about questions and doubts, public the undermines think, us I of all for That, politicians. I So system. democratic entire our in have we that confidence scheme pension the abolishing of favour complete in be would th allowance pension a matching say, is, reasonable is what think such as the RRSP allowance that currently occurs in MLA that. beyond not but get, Albertans other many as compensation, transition the abolish would I that is allowance transition allowance completely as well. When MLAs or any politician and public the Politicians a it’s set for term. office, for stands I in. going that know transition from an MLA back into normal society is more difficult. is more society into normal back MLA an from transition Mr. to see more of that. Justice went into some detail on that, and you can see that on the web. I I web. the on that see can you and that, on detail some into went but not, or correct that’s whether of knowledge personal no have you’re what to exception an be that would is, it that assuming saying? REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-62 MLA Compensation and Benefits Review – Calgary February 2, 2012 compensation and far greater detail with respect to the receipts, fantastic career as a trauma physician and businessman and take and it should be all in one spot. The principle I’m forwarding is such a big pay cut. They couldn’t understand. You know, friends routine proactive disclosure for you. would say: hey, why are you going to earn $79,000 a year? The final thought I’d really like to leave you with is not in here, After having been elected, I have to say that it’s the best, the but it’s more one about fairness. People don’t forget when they’re toughest, the hardest working job, and the most fulfilling. In fact, treated unfairly. They don’t like to feel that they’re in the middle it’s not a job; it’s a labour of love. That’s what it is. I’ve been of an injustice. MLA pay and setting that MLA pay and how you honoured and humbled to have had the opportunity to face the compare it to the rest of Alberta I think is a really important challenges and opportunities to improve and elevate the level of question that needs to be decided because if it’s not done conversation and debate. correctly, then people will feel a great injustice. The challenges that I had were when we first got elected. The Deutsche Bank yesterday came out and said that we’re in for Premier and cabinet voted themselves a 34 per cent pay raise. I another social explosion if we don’t pay attention to economic felt that in an economic downturn as public servants our job is to disparity around the world. It’s little things like MLA pay that be the moral compass, to set an example for society, having had really add to the basket of injustice if we don’t pay attention and parents who struggled and worked hard and laboured each and do a good job of ensuring that that is fair and attends to the every day. My father worked in a mill, and my mother cleaned constituents that MLAs need to represent. hotel rooms. I’ll tell you: they worked hard. My dad worked overtime in the mill. My mother worked evenings and weekends Justice Major: Thank you very much. seven days a week. Mr. Ernst: Thank you. As a public servant your job is to be a role model for hardworking people, to give them hope when there isn’t any hope. Justice Major: Is there nobody here? We’ll adjourn for 10 They need to know that their leaders understand the pain and minutes and see if the others show up. suffering they go through. This should not be a job, and it should You’re all welcome to stay, but I won’t feel hurt if you leave. not be the best or highest paying job that you’ve ever had. I [The meeting adjourned from 7:45 p.m. to 7:56 p.m.] realized the income of MLAs was more than I was led to believe it was. It was $79,000, and then I came to realize that there was this Dr. Raj Sherman, MLA, Edmonton-Meadowlark tax-free allowance. My feeling is that there should be no tax-free Leader of the Official Opposition allowance. We should get our income, a T4 like any Albertan, and pay tax on our full income. Dr. Sherman: Justice Major, first of all, I’d like to thank you for the opportunity to present on what is a very important issue, I Justice Major: I’ve asked others about this, and I’m interested in believe, in a democracy. Thank you for taking time out of your your view. There has been the expression by a number of people life to help us make a very important decision. that the tax-free allowance should be discontinued. The consequence of doing that is that to keep the MLAs at the same Justice Major: One of the things I want to ask you, Dr. Sherman, pay, you would have to increase their pay sufficiently so that they is that there seems to be some confusion on the extent to which could pay the income tax. this commission was advertised. We followed the same format as There is a specific exemption in the Income Tax Act, that you that for Electoral Boundaries, which had quite a sizable turnout. are probably aware of, section 81, that permits MLAs a tax- To be more specific, there were 125 newspapers advised, some of exempt status. It’s a subsidy, if you like, from the federal course weeklies on weekends, and two notices were run in eight of government that permits no tax on the $25,000, or 50 per cent of the major newspapers in the province. There were 67 articles your income. In order to eliminate that and to keep the MLAs written about it. The weekly papers: the Morinville Free Press, I whole, you would have to increase their pay by a sufficient don’t expect many people read, but the province was virtually amount so that they could pay. Suppose it’s $100,000. You would blanketed with some notice. So I hope that puts your mind at rest have to increase it to $125,000 so they could pay income tax on if you were in any doubt about people being advised of this. My what the federal government at the moment has said we don’t feelings were getting hurt. collect tax on. It would be the province of Alberta that would pay somewhere around a million dollars collectively by the members Dr. Sherman: If it’s any consolation, people usually know when if you took away the tax-free allowance. On an economic basis it’s elections are. Despite all the work and effort we put in to difficult to see why the province, given the scrimmages we’ve had encourage people to vote, only 40 per cent voted. Nevertheless, I with Ottawa, would want to send them a million dollars. thank you and everyone here for taking the time and putting in The other side of the coin as presented by others is that it’s your effort. When I first ran for public service, I ran for two reasons. One worth that amount to demonstrate transparency to the citizens that was to give back to a province that has given me and my family so they don’t get from seeing an expense-free allowance. The net much. I didn’t come with much when I came to Alberta as a gainers of eliminating it would be the federal government. Now, student in 1984, just one box full of clothes. For the opportunities some people say it’s worth it. Other provinces have done it, and that were given to me by the people who built this province and by they’ve said: “We prefer to look pure, to be upfront, to be the education I received, I felt it my moral duty to give back. The transparent. We’re prepared to forgo that subsidy.” Do you have other reason I ran was that as somebody who worked in the front any thoughts about that? lines of society in an inner-city emergency room department, I 8:05 saw many problems and learned many things and felt it was also Dr. Sherman: You raise points that others have raised. There are my duty to contribute to the conversation. only 87 of us out of a province of 3.7 million. If the average hard- It was against the advice of many of my colleagues and family, working Albertan doesn’t get a tax-free allowance, nor should who questioned why I would be willing to take a break from a their elected leaders. M312 | Appendices appendix 313 M t r -63 in the MLA Appendices | Appendices | ernmental . . ow that past many . May 2012 Repo is the of the pay Premier and cabinet.I it’s under your purview under under purview your under it’s if know don’t I t being bu interrupting, for me Excuse No. On that point the difficulty that seems to be be to seems that difficulty the point that On well, the chambers of commerce, but that’s not I don’t want to pursue this too long, but would, would, but long, too this pursue to want don’t I “The public” is too general, doctor. I don’t expect expect don’t I doctor. too general, is public” “The Calgary Absolutely. For me personally it’s not as big an an big as not it’s personally me For Absolutely. I believe the government definitely shouldn’t be be shouldn’t definitely government the believe I It should be of political free interference. It needs I would still have to spend time to spend have still would I : : : : : : : : fine, but who’s on the committee, and who appoints appoints who and committee, on the who’s but fine, Major Major Major Major Sherman Sherman Sherman Sherman hey ask them to do. How would you suggest that a committee a committee that suggest you would How do. to them ask hey I suggest that there should be a maximum cap. I don’t know know don’t I cap. maximum a be should there that suggest I – issue other The esent is who. They speak of a committee, an independent independent an committee, of a speak They who. is esent r. r. r. r. D Justice medically trained, you could look to a future. You may have to do do to have may You future. a to look could you trained, medically be would prospects your but ready, get and retraining some reasonable. D issue, but for many others who work in the nongov the in work who others many for but issue, you as afterwards, employment finding problem big a is it sector, mentioned. In fact, it’s even more acuteproblem a if you’re not a Liberal the for run you if even know, you as member, government kn I unelected. you’re and province this in Party Liberal members have had difficulty finding employment for for employment finding difficulty had have members Liberal there’s side, government on the if you’re that do know I but years, government of form the in guaranteed almost employment relations work or contracts. a challenge It is for opposition many members. a be shouldn’t definitely it but be, should number that what $600,000 or $700,000 or $800,000 or $900,000 or dollars million perhaps cap, maximum a be should There $500,000. or per months two or one perhaps or $250,000 of neighbourhood year of service for a maximum of eight years. I don’t think it’s of worth years’ three pay, months’ 90 60, 50, 40, paid be to right allowance. transition – compensation MLA own their setting be should cabinet and Premier the believe don’t independently. set be should It pay. Justice pr committee. How is the committee chosen? Let’s assume you have a government that’s less than open. they If set the committee, if do will that committee the can pick they heart, in is their larceny as t it would where or committee, the on be would Who formed? be come from? D the one setting that committee. That I do know. Elected members members Elected do know. I That committee. that setting one the on the voice one have Maybe committee. on that be not should in be not should members government definitely but committee, the majority on that committee. Perhaps a committee of community leaders. Justice say, the ofmayor a city be a member of a committee, or do you chambers the to go we Should completely? politics of out it want of commerce, for instance? It’sa question interested I’m in. The is committee the committee? D to have the trust of the public. the of trust the have to Justice always going to be satisfactory. be to going always you to have the answer off the top of your head, but forming a forming but head, your of top the off answer the have to you desirable, is which government, of independent that’s committee committee? on the Who’s to? go do you it? Who form do you how say, could You a ttees didn’t ttees MLA Compensation and Benefits Review – Review Benefits and Compensation MLA tee pay. Having been in doors committees and have the taxpayer - Do you think there should be any transition transition any be should there think Do you So your is, view as others have expressed, that My point is that all the Albertans, you know, you Albertans, the all that is point My Okay. You would have no difficulty. have You would The other issue is commit is issue other The If it was a question of having to raise the salaries to salaries the to raise question having a of it was If Yes. Absolutely. I doI agree transition a It’swith having the allowance. LAs. Then the issues would go to caucus, and then then and caucus, to go would issues the Then LAs. : : : : : : : : On the government side they have an opportunity to to opportunity an have they side government the On it’s unlikely after eight or 12 years of public service that I that service of public 12 or eight years after unlikely it’s Major Major Major the after day the job a get can person a When right. that’s Major Major ould be held in the open and in public. in and open the in held be ould -free allowance. e s commonly called a parachute, something that gives them a them gives that something parachute, a called commonly s Sherman Sherman Sherman : Sherman The other issue is the transition allowance. We all make a great Many of the committees for the government members in the REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Justice February 2, 2012 2, February modest amount, would pay the federal government to eliminate eliminate to government federal the pay would amount, modest the tax Dr. allow for that, so be it. This is more about being the moral moral the being about more is This it. be so that, for allow compass and setting an example. Justic you would eliminate it, pay whatever comes from the tax but tax the from comes whatever it, pay eliminate would you themake amount transparent so that it clear? was Dr. Dr. Justice Justice Dr. pay. If those committees are to be held andpeople are to be paid, they sh allowance? We heard evidence that MLAs seeking employment they’re When time. difficult a very have frequently they leave when but depression, a into go say I wouldn’t sometimes they defeated, MLA an been having that evidence heard into lull We’ve go . a they sector. private the in job a for finding recommendation a not great is So a case is being made that they need some time to adjust, similar are given who sector private in the employment leaving people to what’ MLA? an with that for place any there Is landing. soft in fact, I don’t believe we changed any policy when I was in in I was when policy any changed we believe don’t I fact, in government. Priorities, and Agenda through cabinet, through process the vet through Treasury Board. These cabinet policy committees were of multitude the for project creation job a as mind, my in created, government M right it’s feel don’t I Legislature. the of floor the to go would they -closed behind have to sacrifice from our personal lives and businesses and careers, from they that do understand I from. come we’ve that lives previous the the in province only the are we and plan, pension the of rid got the to respect with Now, plan. pension a have doesn’t that country transition allowance some of the transition allowances have been don’t I $800,000. $700,000, dollars, a million of upwards obscene, believe $800,000. of allowance transition a need don’t they election, government, an independent member, and now Leader of the the of Leader now and member, independent an government, the On month. a $1,000 of pay committee a is there Opposition, average most members are on three committees, plus or minus. Now, the challenge I had was that ofmany the commi meet frequently. In fact, some met once ortwice a year. To be I met, hadn’t that committee a for salary month a $1,000 granted of pay the in adjustment an to be had there If right. is think don’t the that MLA, be may a more reasonable approach. doors. closed behind met of a member was I that government These meetings weren’t opentothe public. rarely We changed – amount that concerns me. Even myself as a highly trained trauma trauma trained a highly as myself Even me. concerns that amount physician can go back to the same emergency department. Justice REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-64 MLA Compensation and Benefits Review – Calgary February 2, 2012 Dr. Sherman: I don’t have all the answers to this, but what I do cent pay raise and then have said no to the public. For us it’s about know is that it should not be the process that we have had. That I leadership and setting the moral bar. Moving forward, we do need do know. to be the moral compass of society. I believe changing how MLAs are paid must be done in an open, honest, accountable way. It Justice Major: I gathered that. should be free of any political interference. Dr. Sherman: Perhaps there are many wiser people, wiser than I, We are the best province in the best country in the world. This who can give you that answer. world is struggling. It’s looking to be led by leaders willing to serve the public. There must be no perception that we are serving Justice Major: Well, they haven’t shown up. ourselves and not the people. We must remove all fingerprints of self-service. I understand as a leader how difficult it is to recruit Dr. Sherman: MLA pay needs to be simplified so the public and candidates to run. I’ve met many fantastic candidates who are the MLAs themselves understand what the pay structure is. I don’t willing to make the same sacrifice that many others before me believe there’s a full understanding of what MLAs do and what have made. they get paid and how they are compensated. These are answers that we will look to you to provide after you listen to all the Justice Major: I think you expressed a standard that we all aspire presenters, but I can certainly say that a committee made of to. It’s getting there that’s the problem. elected members should not be making these decisions. It’s like the fox guarding the henhouse. Dr. Sherman: As an emergency doctor I spent my life making decisions, good decisions. Most of those times, in fact almost all 8:15 of those times, those decisions were made in collaboration with a Justice Major: I get the point, but let me move back to team. We always together as a team decided what was the right committees. I take it from what has come before you that some thing to do. We always pretended that if the shoe was on the other committees are necessary. There is some skepticism expressed foot, how should we measure ourselves? That’s how, I believe, that it’s necessary to have so many committees, particularly these decisions should be made, not through the eyes of committees that don’t meet. It seems pretty obvious that they’re politicians, who do work very hard, and public servants but not contributing much. But is there a role, in your opinion, for all- through the eyes of somebody cleaning your hotel room, party committees? You said earlier that they should be public, but somebody working hard in a mill every day, somebody working in there are some things, perhaps, that government can’t discuss in a gas station. committee in public but could make a recommendation on. Do you agree with any of that? Justice Major: What you say, of course, is true, and you earlier made mention of the dilemma, that the compensation can’t be so Dr. Sherman: For me personally in public office I believe all low that you attract no one, nor can it be so high that you attract decisions for which we are paid other than caucus positions should many that are attracted only by the money. What is the balance? I be public decisions. I believe the all-party public committees are a mean, that’s what we’re all searching for. What’s reasonable very good thing. In fact, it’s an opportunity to work in a bipartisan considering what’s expected of an MLA? How do you put a manner and debate bills that are contentious and get the input in a monetary value on it? committee where we actually show respect for one another and may change our positions. I do not believe in these cabinet policy Dr. Sherman: Well, that balance is a decision that you will make committees for which government members are getting paid, and I after you’ve listened to all our submissions. myself was a recipient of that pay. I believe the public deserves to get better value and more openness and more accountability from Justice Major: Thanks very much. their elected officials. One of our major issues is to set the moral compass. Yes, public Dr. Sherman: As I said, what I do know is that the process that service is a lot of work, and if you’re a good public servant, it’s 16 we have had is not right. hours a day, seven days a week sometimes. Many times you’re missing your own family’s birthday parties while you’re going to Justice Major: I gathered that. I took that from what you said. society’s birthday parties, but it’s a choice that we make. It’s a Dr. Sherman: And it’s not the fact that MLAs are paid; it’s how conscious choice we make. It’s finding a balance. If the pay is too the decisions are made. That’s what is not right. I support this low, you only have those who are wealthy and affluent running, process. It must be free of political interference. It must be fully and if it’s too high, it should not be the best job you’ve ever had, independent. It must be simplified. A million dollar golden and it should not become a career. parachute should not be there. There should be no tax-free I have a different point of view, being a physician. I’ll tell you, I allowances, and behind-the-scenes committee pay should not took a very big pay cut. I compare myself to my brothers and to exist. In addition, the wages for MLAs on the government side are other members of the community in which I was raised, and they typically higher than the MLAs of all the other parties on the all work just as hard. My father worked way harder than I do as an MLA, and he didn’t have the perks and benefits that I have. My opposition side, and the workload is much more for the MLAs on older brother works harder than I do. I believe we need to be a the opposition sides. moral compass. At a time when we have economic uncertainty in That’s why I felt it was important for me to make this the world, we make difficult decisions. We are saying no to hard- submission. I thank you for taking on this arduous task. working employees who earn $15 an hour caring for seniors and Justice Major: It’s made easier when people come and testify, so no to cleaning staff who clean the hallways of our hospitals and I’m grateful that you found the time to do that. our schools. It was very difficult for me as a public servant in the Dr. Sherman: Thank you, and I wish you the best in preparing government for our government to have voted themselves a 34 per your final report. M314 | Appendices appendix 315 M t r -65 mate? mate? ourage ourage interest - Citizens Citizens MLA Appendices | Appendices | of it’s part of - off periods for periods off ter standard for - provinces or not? not? or provinces exhibit 5 on the the on 5 exhibit bertans need full, full, need bertans fairness, in our view. view. our in fairness, -party committees be and Al and May 2012 Repo ct,other parliamentary democracies ut also supports cooling supports also ut be applauded as a positive transparency transparency positive a as be applauded er comes next. I’d like to respectfully disagree disagree to respectfully like I’d next. comes er arties in the Legislative Assembly, and we and we Assembly, Legislative the in arties Calgary Albertans to determine the total amount an MLA makes, makes, MLA an amount total the determine to Albertans -party committee pays, the government committees. In Then the questions are: is the transition allowance serving those those serving allowance transition the is are: questions the Then My next point relates to separating the party and the the and party the separating to relates point next My to allowance. transition the The thirdOur relates point The next point relates to transparency of the package. How easy easy How package. the of transparency to relates point next The I want to consider specifically the member indemnity and politicians, which are an essential component of conflict of component essential an are which politicians, prevention. purposes effectively? Is it fair? Is it generally viewed as legiti The comparatively high transition allowances have been criticized for committee the by reviewed be should and I pensions? bolster to in used practice allowance transition the Is complete, and easily accessible information to fulfill this this to fulfill information accessible and easily complete, commissioner the encouraging strongly we’re Here responsibility. easily figures, compensation complete and full forward put to understood and accessible, and that will set a bet province. the in transparency to other Alberta essential to it’s compare While government. provinces andterritories as well as to the federal government, we specific context our here. After consider to 40 need years ofalso rule the by same political party lines between the party and the is Alberta in this of example An blurred. become can government one the fa in and, provinces other and party the for policy setting considered is this world the around clearly be should this that think We taxpayer. the by funded not is is traditionally which government, the for policy from delineated p set by multiple one for pay that recommend strongly abolished. of government publishes Alberta levels allowance transition for all to is which members, to intended is allowance transition the it, understand we As measure. to find resigns or retires, election, lost has who MLA an enable meaningful employment afterthey leave office andto a make totransition whatev on the noticed we’ve which submissions other the of some with be should allowance transition the contend which website, only not allowance transition the that think We eliminated. reintegration b facilitates commissioner such as yourself reviews compensa and tion levels on government the congratulate we and recommendations, makes other in with line more brings Alberta This this step. taking B.C., and Ontario, Scotia, Nova Manitoba, as such provinces enc strongly We reviews. external conduct routinely which Alberta to legislate an external review of compensation rates to exists that conflict of perception as well as conflict real the avoid pay. own their determine MLAs when it is for including all salary, allowances, committee pay, and associated know to deserve Albertans important. incredibly is This benefits? the full compensation levels of their representatives. Lack of be may costs some that perception public even transpare or ncy run, long the in democracy damages and cynicism to leads hidden previously. heard you’ve sure I’m which in provided comparisons allowance expense website. I had concerns some about Alberta them. representatives an this Is Canada. in compensated worst the among be to appear accurate picture? How are committee rates calculated elsewhere? other in compensation the in included they Are $40,000, as much as add can compensation committee Alberta In pay. MLA to $60,000 than more sometimes or $50,000, – account to officials elected their hold to supposed are – process democratic the in role our and and - same time, st be responsive to to responsive be st c service, from running running from service, c MLA Compensation and Benefits Review – Review Benefits and Compensation MLA page summary of our key talking points, points, talking key our of summary -page ing its criteria and decisions. In our view the the view our In decisions. and criteria its ing t the principles for setting pay matter. MLAs matter. pay setting for principles t the He had a lot of admirable qualities, but he he but qualities, admirable of lot a had He It’s a pleasure to be here, and representing I am Was he?Was It’s been for a privilege to for me work Oh, my gosh. my Oh, Thank you very much. very you Thank So I hear. Ms MacIntosh, you’re last but not least, as that that as least, not but last you’re MacIntosh, Ms Time will tell. Time will mine. of partner a was Chumir Sheldon He never threw away a newspaper. : : : : : Thank you. Have a good night. good a Have you. Thank : : : : : : sses are significant not only for them but also for the the for also but them for only not significant are sses day I sent a one a sent I day Major Major Major Major Major -sector market comparisons and mu Sherman MacIntosh MacIntosh MacIntosh MacIntosh MacIntosh Albertans benefit from highly qualified and competent competent and qualified highly from benefit Albertans From an ethical leadership perspective we think that the process of conflict basic a is there points, specific few a on to Moving Political service is a privilege, as has been noted, and I wanted to focus first on principles for setting compensation compensation setting for on principles first focus to wanted I Yester REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | Heather MacIntosh Sheldon Chumir Foundation for Ethics in Leadership similar to what we heard from the past speaker, we feel that salary such categories professional in those discourage unduly not should as doctors,lawyers, and engineers, for example, who are generally publi or private the in compensated higher for elected office. the all, Above backgrounds. diverse from representatives public in judgment prudent demonstrate must commission private public concern, anticipating what levels are likely to be accepted as legitimate. for setting compensation levels matters greatly in a democracy and health of theLegislature. the about much says their MLAs pay. The situationset own is when interest ameliorated somewhat when an external committee or an external must be fairly compensated to reflect the incredibly important role role important incredibly the reflect to compensated be fairly must the so is fair, on what agree will everyone Not do play. they in transparent and courageous both be to needs commission justify and explaining of notion public’s the to responsive be to needs commission fairness, also not to easy determine. the At perspective. that reflect should compensation Ms wanted I Leadership. in Ethics for Foundation Chumir Sheldon the role important incredibly an do play MLAs that saying by start to using and level, what at compensated, are they How Alberta. in proce which public service, for taxpayers, andfor all Albertans. levels. are notWe recommending a specific compensation level, tha do think we but the foundation and learn a little bit about his life, his political role, role, his political his life, about bit little a learn and foundation the liberties. civil and rights human in and law in role his Ms Justice Ms Justice 8:25 Ms that. of copy a have do you that sure make to wanted just I and right. all That’s Okay. No? Justice Justice February 2, 2012 2, February couldn’t keep his clean. office Ms Dr. Justice goes. expression old REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA-66 MLA Compensation and Benefits Review – Calgary February 2, 2012 notice that’s something that the Canadian Taxpayers Federation has Justice Major: Do you know any province where a committee asked. If so, then perhaps a pension review is warranted. We believe sets the pay? that any component of compensation should serve the purpose for which it is intended. Is the transition allowance of reasonable length, Ms MacIntosh: I believe that’s the case in B.C. or is it excessive? That also has been questioned. Should there be a maximum period? Do we, in fact, need additional transition support Justice Major: That was true of Vancouver, but is it true of the such as retraining or counselling options? These are all questions Legislature? Do you know? that we encourage the commission to explore. Ms MacIntosh: They did a 2007 review, and I noticed that they Transition allowance and pay for members of government-only had an external committee presenting a paper. committees have been contentious issues in MLA compensation. The public needs grounds for greater confidence in these two Justice Major: But do you know how the committee was formed? components, we would argue. We encourage the commission to deal with the transition allowance particularly carefully with a view Ms MacIntosh: No, I don’t. I do know that, for example, with to ensuring a reasonable and justifiable rate and that it is used only electoral boundaries legislation we have details in there about how to meet the intended purpose. the committee is formed, and that’s legislated. They want to have Thank you so much for the work that you’re doing and the someone who doesn’t have a direct political affiliation. Sometimes opportunity to present. that’s specified. Sometimes we look specifically for a judge or a legislative officer to head a committee, that sort of thing. Justice Major: Thank you. On the question of setting MLAs’ pay, you encourage a regular process but by a third person or party or Justice Major: Well, it’s something to puzzle. Thank you. committee. What is it that you would suggest? A committee sounds Is there anything else? fine until you try to think of who’s on the committee and who appoints the committee. Ms MacIntosh: No. Thank you. Ms MacIntosh: Right. Different provinces have dealt with that in Justice Major: Thank you. different ways. I think it’s useful to take a look at how that’s been I hate to disappoint you all, but we’re now adjourned. handled elsewhere. [The meeting adjourned at 8:35 p.m.] M316 | Appendices appendix 317 M t r Appendices | Appendices | May 2012 Repo of the Legislative Assembly of Alberta of Assembly Legislative the of Published under the Authority of the Speaker the of Authority the under Published REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report N Member total compensation comparisons and proposed Alberta salary and pension (FULLY TAXABLE) 318 | Appendices 319 appendix N t r Appendices | Appendices | amount taxable equivalent to up ‐ grossed is amount Allowance Free Tax ** pay Chair Deputy and Chair excluding Government) and (Legislative sources all from pay Committee Average * May 2012 Repo $65,344.00 6,4.0$3340 3,7.05.%$96,016.00 50.0% $32,672.00 $63,344.00 $65,344.00 $89,300.00 8,0.0$9300 9830 10 $99,123.00 11.0% $9,823.00 $89,300.00 $89,300.00 Island Edward Prince $85,564.00 8,6.0$5540 2,0.02.%$105,672.00 23.5% $20,108.00 $85,564.00 $85,564.00 Saskatchewan $85,000.00 8,0.0$5500 3,4.03.%$117,545.00 37.7% $32,045.00 $85,500.00 $85,000.00 Manitoba $86,619.00 8,1.0$6690 3,9.04.%$126,117.00 45.6% $39,498.00 $86,619.00 $86,619.00 Brunswick New $116,550.00 16500 16500 1,5.01.%$128,205.00 10.0% $11,655.00 $116,550.00 $116,550.00 Scotia Nova $95,357.00 9,5.0$5370 3,4.04.%$133,500.00 40.0% $38,143.00 $95,357.00 $95,357.00 Ontario $101,859.00 11890 11890 4,5.04.%$143,316.00 40.7% $41,457.00 $101,859.00 $101,859.00 Newfoundland/Labrador 6,3.0$13,371.00 $69,531.00 8,0.0$9300 6,3.07.%$156,757 75.5% $67,437.00 $89,320.00 $82,902.00 .00 Columbia British $90,396.00 9,9.0$0360 6,4.07.%$158,645.00 75.5% $68,249.00 $90,396.00 $90,396.00 Yukon $134,000.00 14000 14000 2,0.02.%$161,202.00 20.3% $27,202.00 $134,000.00 $134,000.00 Nunavut 8,3.0$15,538.00 $85,338.00 10860 18440 5,1.05.%$166,5 53.6% $58,115.00 $108,424.00 $100,876.00 39.00 Alberta 9,1.0$6,962.00 $96,615.00 13570 16990 6,9.05.%$168,71 57.8% $61,799.00 $106,919.00 $103,577.00 8.00 Quebec 9,1.0$13,924.00 $96,615.00 10590 17230 6,5.05.%$184,9 57.8% $67,755.00 $117,223.00 $110,539.00 78.00 (1) NWT distance commuting within 12300 12300 5,4.04.%$191,041.00 44.4% $58,741.00 $132,300.00 $132,300.00 $132,300.00 (2) NWT distance commuting beyond $157,731.00 17710 17710 $70,033.00 $157,731.00 $157,731.00 $227,764.00 Senate Commons of House 44.4% Jurisdiction Indemnity Allowance loac TOTAL Allowance Pay TOTAL Pension Salary Compensation Expense RRSP Committee * up Grossed ** to Contribution of % TOTAL Free Tax Employer $134,000 SALARY ALBERTA PROPOSED SALARY AND PENSION ( MEMBER TOTAL COMPENSATION COMPARISONS information on based 2012) 1, March of as available APPENDIX N REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report O Member total compensation comparisons and proposed Alberta salary and pension (w/ TAX-FREE ALLOWANCE) 320 | Appendices 321 appendix O t r Appendices | Appendices | amount taxable equivalent to up ‐ grossed is amount Allowance Free Tax ** y pa Chair Deputy and Chair excluding Government) and (Legislative sources all from pay Committee Average * May 2012 Repo $65,344.00 6,4.0$3340 3,7.05.%$96,016.00 50.0% $32,672.00 $63,344.00 $65,344.00 $89,300.00 8,0.0$9300 9830 10 $99,123.00 11.0% $9,823.00 $89,300.00 $89,300.00 Island Edward Prince $85,564.00 8,6.0$5540 2,0.02.%$105,672.00 23.5% $20,108.00 $85,564.00 $85,564.00 Saskatchewan $85,000.00 8,0.0$5500 3,4.03.%$117,545.00 37.7% $32,045.00 $85,500.00 $85,000.00 Manitoba $86,619.00 8,1.0$6690 3,9.04.%$126,117.00 45.6% $39,498.00 $86,619.00 $86,619.00 Brunswick New $116,550.00 16500 16500 1,5.01.%$128,205.00 10.0% $11,655.00 $116,550.00 $116,550.00 Scotia Nova $95,357.00 9,5.0$5370 3,4.04.%$133,500.00 40.0% $38,143.00 $95,357.00 $95,357.00 Ontario $101,859.00 11890 11890 4,5.04.%$143,316.00 40.7% $41,457.00 $101,859.00 $101,859.00 r Newfoundland/Labrado 6,3.0$13,371.00 $69,531.00 8,0.0$9300 6,3.07.%$156,757 75.5% $67,437.00 $89,320.00 $82,902.00 .00 Columbia British $90,396.00 9,9.0$0360 6,4.07.%$158,645.00 75.5% $68,249.00 $90,396.00 $90,396.00 Yukon 7,0.0$37,500.00 $75,000.00 12500 14000 2,1.02.%$159,3 22.5% $25,313.00 $134,000.00 $112,500.00 13.00 Nunavut 8,3.0$15,538.00 $85,338.00 10860 18440 5,1.05.%$166,5 53.6% $58,115.00 $108,424.00 $100,876.00 39.00 Alberta 9,1.0$6,962.00 $96,615.00 13570 16990 6,9.05.%$168,71 57.8% $61,799.00 $106,919.00 $103,577.00 8.00 Quebec 9,1.0$13,924.00 $96,615.00 10590 17230 6,5.05.%$184,9 57.8% $67,755.00 $117,223.00 $110,539.00 78.00 (1) NWT distance commuting within $132,300.00 12300 12300 5,4.04.%$191,041.00 44.4% $58,741.00 $132,300.00 $132,300.00 (2) NWT distance commuting beyond 17710 17710 $70,033.00 $157,731.00 $157,731.00 $157,731.00 $227,764.00 Senate Commons of House 44.4% Compensation Salary Pension loac TOTAL Allowance Pay Allowance TOTAL up Jurisdiction Indemnity TOTAL of % to Contribution RRSP Committee * Expense Grossed ** Employer Free Tax $75,000; TFA $37,500 ($134,000 Taxable Equivalent) ALBERTA PROPOSED SALARY AND PENSION ( MEMBER TOTAL COMPENSATION COMPARISONS 2012) 1, March of as available information on based APPENDIX O REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report P Cabinet Minister total compensation comparisons and present Alberta Cabinet salary 322 | Appendices 323 appendix P t r Appendices | Appendices | May 2012 Repo REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report Q Cabinet Minister total compensation comparisons and proposed Alberta Cabinet salary (FULLY TAXABLE) 324 | Appendices 325 appendix Q t r Appendices | Appendices | * Tax Free Allowance amount is grossed-up to equivalent taxable amount taxable equivalent to grossed-up is amount Allowance Free Tax * May 2012 Repo Senate $132,300.00 Saskatchewan $151,002.00 11.0% $14,964.00 $136,038.00 $136,038.00 $46,738.00 $89,300.00 Manitoba $151,823.00 23.5% $28,889.00 $122,934.00 $122,934.00 $37,370.00 $85,564.00 Prince Edward Island Edward Prince $166,548.00 50.0% $55,516.00 $111,032.00 $111,032.00 $45,688.00 $65,344.00 Ontario $182,435.00 10.0% $16,584.00 $165,851.00 $165,851.00 $49,301.00 $116,550.00 New Brunswick New $189,494.00 37.7% $51,880.00 $137,614.00 $137,614.00 $52,614.00 $85,000.00 Nova Scotia Nova $195,436.00 45.6% $61,208.00 $134,228.00 $134,228.00 $47,609.00 $86,619.00 Newfoundland/Labrador $209,201.00 40.0% $59,772.00 $149,429.00 $149,429.00 $54,072.00 $95,357.00 British Columbia British $214,974.00 40.7% $62,185.00 $152,789.00 $152,789.00 $50,930.00 $101,859.00 Yukon $224,040.00 75.5% $96,382.00 $127,658.00 $121,290.00 $38,388.00 $13,371.00 $69,531.00 Alberta $241,803.00 20.3% $40,803.00 $201,000.00 $201,000.00 $67,000.00 $134,000.00 Quebec $264,768.00 53.6% $92,393.00 $172,375.00 $164,917.00 $64,041.00 $15,538.00 $85,338.00 Nunavut $281,686.00 75.5% $121,181.00 $160,505.00 $160,505.00 $70,109.00 $90,396.00 NWT (1) (1) NWT within commuting distance commuting within $295,659.00 57.8% $108,296.00 $187,363.00 $184,021.00 $73,482.00 $6,962.00 $96,615.00 NWT (2) (2) NWT beyond commuting distance commuting beyond $300,929.00 57.8% $110,224.00 $190,705.00 $184,021.00 $73,482.00 $13,924.00 $96,615.00 44.4% House of Commons of House $157,731.00 $103,606.00 $233,347.00 $233,247.00 $75,516.00 $336,953.00 Jurisdiction TOTAL TOTAL Pay Cabinet Allowance Indemnity Compensation Salary Pension to * Grossed up up Grossed * Expense TOTAL TOTAL of % Contribution Tax Free Free Tax Employer Employer $134,000 Salary Salary $134,000 ALBERTA PROPOSED SALARY AND PENSION PENSION AND SALARY PROPOSED ALBERTA (based on information available as of March 1, 2012) 2012) 1, March of as available information on (based CABINET TOTAL COMPENSATION COMPARISONS COMPARISONS COMPENSATION TOTAL CABINET APPENDIX Q APPENDIX REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report R Cabinet Minister total compensation comparisons and proposed Alberta Cabinet salary (w/ TAX-FREE ALLOWANCE) 326 | Appendices 327 appendix R t r Appendices | Appendices | May 2012 Repo amount taxable equivalent to grossed-up is amount Allowance Free Tax * Senate $132,300.00 Saskatchewan $151,002.00 11.0% $14,964.00 $136,038.00 $136,038.00 $46,738.00 $89,300.00 Manitoba $151,823.00 23.5% $28,889.00 $122,934.00 $122,934.00 $37,370.00 $85,564.00 Prince Edward Island Edward Prince $166,548.00 50.0% $55,516.00 $111,032.00 $111,032.00 $45,688.00 $65,344.00 Ontario $182,435.00 10.0% $16,584.00 $165,851.00 $165,851.00 $49,301.00 $116,550.00 New Brunswick New $189,494.00 37.7% $51,880.00 $137,614.00 $137,614.00 $52,614.00 $85,000.00 Nova Scotia Nova $195,436.00 45.6% $61,208.00 $134,228.00 $134,228.00 $47,609.00 $86,619.00 Newfoundland/Labrador $209,201.00 40.0% $59,772.00 $149,429.00 $149,429.00 $54,072.00 $95,357.00 British Columbia British $214,974.00 40.7% $62,185.00 $152,789.00 $152,789.00 $50,930.00 $101,859.00 Yukon $224,040.00 75.5% $96,382.00 $127,658.00 $121,290.00 $38,388.00 $13,371.00 $69,531.00 Alberta $241,388.00 22.5% $40,388.00 $201,000.00 $179,500.00 $67,000.00 $37,500.00 $75,000.00 Quebec $264,768.00 53.6% $92,393.00 $172,375.00 $164,917.00 $64,041.00 $15,538.00 $85,338.00 Nunavut $281,686.00 75.5% $121,181.00 $160,505.00 $160,505.00 $70,109.00 $90,396.00 NWT (1) (1) NWT within commuting distance commuting within $295,659.00 57.8% $108,296.00 $187,363.00 $184,021.00 $73,482.00 $6,962.00 $96,615.00 NWT (2) (2) NWT beyond commuting distance commuting beyond $300,929.00 57.8% $110,224.00 $190,705.00 $184,021.00 $73,482.00 $13,924.00 $96,615.00 House of Commons of House 44.4% $157,731.00 $336,953.00 $103,606.00 $233,347.00 $233,247.00 $75,516.00 Compensation Salary Pension Jurisdiction * Grossed up TOTAL up Grossed * TOTAL Pay Cabinet Allowance Indemnity TOTAL TOTAL of % to Contribution Tax Free Expense Expense Free Tax Employer Employer $75,000 Salary and a $37,500 TFA ($134,000 Taxable Equivalent) Taxable ($134,000 TFA $37,500 a and Salary $75,000 ALBERTA PROPOSED SALARY AND PENSION AND SALARY PROPOSED ALBERTA (based on information available as of March 1, 2012 2012 1, March of as available information on (based CABINET TOTAL COMPENSATION COMPARISONS COMPARISONS COMPENSATION TOTAL CABINET APPENDIX R APPENDIX REVIEW OF COMPENSATION OF MEMBERS OFTHE LEGISLATIVE ASSEMBLY OF ALBERTA | REVIEW OF COMPENSATION OF MEMBERS OF THE LEGISLATIVE ASSEMBLY OF ALBERTA | May 2012 Report MLA Compensation Review – Alberta | May 2012 Report 330 | 3.9 Implications of Recommendations