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July 2006 Archives

July 7, 2006

Grit or Tory, Same Old Story?

Stephen Harper was elected in large measure to end Ottawa’s inbred culture of entitlement. Canadians are fed up with the cozy relationships that typify “business as usual” inside Parliament and the misuse of tax dollars. The Prime Minister’s Accountability Act will go someway to improve the government’s spending, lobbying, and oversight systems. Absent from this agenda is a commitment to end the double-dealing of MP pay and benefits.

A self-serving scheme was exposed recently when Parliament Hill freelance reporter Tim Naumetz revealed the amount MPs can spend on living costs in Ottawa jumped from $20,000 to $24,000 a year – a 20% increase. The change was made in secret; it was not subject to a House of Commons vote; and although approved on May 1st, it was only disclosed to the public at the end of June as MPs jetted off for a three-month summer recess.

Unfortunately for taxpayers there was more. A second Naumetz story discovered another trick used by MPs to fleece taxpayers: MPs with a house in Ottawa may direct a $75 daily meal allowance to pay down the mortgage. This per diem is in addition to a $25 accommodation allowance MPs receive 365 days a year if they own an Ottawa home. By spending only 4 days a week in Ottawa when Parliament is in session a legislator could milk over $17,000 each year from taxpayers for mortgage payments. This perk is in addition to the $24,000 allowance. Forget double-dipping, this is now triple-dipping.

Back in 2000, MPs were paid a salary of $68,000 and also provided a tax-free allowance worth approximately $26,000. When changes were made the following year, lawmakers included the allowance as part of their salary package and simultaneously granted themselves an additional 20% pay raise. The public was told the higher pay was intended to offset a reduced expense allowance. Overnight a base salary of $131,400 was established and a modest $10,000 expense allowance was implemented.

Five years later MPs have never had it so good. Salaries and allowance have increased dramatically. Pay stands at $147,700 a year – placing lawmakers in the top 2% of all Canadian income earners – and the annual expense allowance is now $24,000. This is to say nothing of the obscenely generous gold-plated pension plan for MPs.

But this isn’t how some MPs see it. Liberal MP Brent St. Denis likens these benefits to a family’s income. Mr. St. Denis admits he pays his Ottawa mortgage with his per diem lunch money, “It’s part of the money that comes in and you just juggle, like every family does, juggle your bills; you just throw it into the pot and pay your mortgage, and if you have a mortgage in the riding and in Ottawa you just make sure the bank is happy.” Mr. St. Denis doesn’t realize the money he is casually tossing around comes from cash-strapped and over-taxed families.

What, if anything, will be done to end this culture of entitlement? Politics is after all a game of perception. If the Conservatives are unwilling to end these sweetheart deals many voters will conclude the new band running Ottawa isn’t any more concerned with respecting taxpayers than the old one.

If the Conservatives wish to avoid being tarred with the same brush as the Liberals, Prime Minister Harper will need to overhaul the MP pay and benefits package. Ending the culture of entitlement is about more than lampooning the previous government for its many ethical lapses. It comes down to a change in behaviour, one that respects taxpayers.

Mr. Harper set a high standard for ethical and responsible financial conduct. And he was right to do so. However, riding into the capital on a promise to end Ottawa’s culture of entitlement means at some point getting off the horse and shoveling out the mess. Or have the Conservatives now found themselves comfortable at the public trough?

John Williamson
Federal Director
Canadian Taxpayers Federation

Posted by John Williamson, Canadian Taxpayers Federation [permalink]