WARNING: newspaper article follows:

If it's good enough for Ottawa...
Raise RRSP limit to match MP's recent pay increase

Jonathan Chevreau
Financial Post
One of the side effects of MPs giving themselves a 20% raise was to almost double their ultimate pensions.

If the MPs applied the logic of their self-serving windfall to taxpayers constrained by the $13,500 contribution limit on registered retirement savings plans, they'd have to double the limit immediately, as well as the equivalent limit in registered pension plans.

Even then, Canada would still have lower tax-assisted retirement savings limits than the U.S.

One of the Liberals' arguments against increasing RRSP room is it is a measure that supposedly benefits "only the rich." A senior Department of Finance official says there is no official definition of "wealthy. " Until the last budget, it clearly considered annual incomes of $65,000 to be rich. That's when the top tax bracket and "high-income" surtaxes kicked in.

Of course, MPs never experienced the surtaxes themselves since they had a base salary of $69,000 and handed themselves an additional $23,000 tax-free. That's why their pre-raise salary was equivalent to $109,000.

But that backfired, since their pensions were based only on the taxable amount. By moving to a fully taxable $131,400, as they are proposing, they effectively double their pensions.

Conveniently, the 5% federal surtax was phased out in January so they never did feel the sting of that tax.

The government will point to lower pension accrual rates of 3.0% announced with the MP pay hike, compared to the previous 4%. That's more smoke and mirrors once you crunch the numbers, which Walter Robinson, federal director of the Canadian Taxpayers Federation (CTF) did on my behalf.

Note that for ordinary mortals, the accrual rate is 2% up to a limit of $86,000 a year of salary. Anything above that is considered a taxable benefit, so few employers can afford to do so -- except of course the government. Not only do the MPs still get a higher accrual (3.0% instead of 2%) rate, but it's not limited to $86,000: it applies to the full $131,400.

Note that 3.0% of $130,000 is $3,900 or 2.3 times the $1,722 a year that can be accrued in RPPs for the rest of us. Furthermore, the CTF points out, these generous pensions are indexed to inflation and MPs can collect them at the tender age of 55 after as little as six years of service.

Based on the MPs' logic, we taxpayers who make their paycheques possible should be given an immediate 100% increase in RRSP/RPP contribution room.

As an interim step, the RRSP limit should immediately rise to the $18,000 advocated by the Canadian Alliance in the last election, or the $20,000 the Tories are calling for.

The Liberals would argue that either figure -- let alone the doubling to $27,000 the Investment Funds Institute of Canada is calling for -- would cost us too much darn money in the form of "tax expenditures." The Finance official says every $1,000 increase in RRSP contribution room "costs" the government $250-million.

But those arguments are bogus, says Alliance Finance critic Jason Kenney. "First they point out most people can't max out [their RRSPs] and it's to the exclusive advantage of the wealthy, and then in their tax expenditure estimates they overestimate the number that will max out. The numbers are pretty ridiculous."

If it's true most people don't use up the current contribution room then it's only a minority who would "cost" the government immediate tax revenues. A minority which, except for the fact they're self-employed or senior managers in the private sector, likely resemble the elite minority of the MPs themselves.

Clearly, it's a case of "do as we say, not what we do." The notion that higher RRSP room will cost a lot in lost revenue seems to me a red herring. The real motivation is of course political -- the fear of losing the votes of the lower-income majority because of the optics of "favouring" the rich.

Kenney and Robinson also point out that the "lost" tax revenue is not lost forever, it's only deferred until an RRSP generates taxable revenue in retirement. As University of Waterloo professor Rob Brown has demonstrated, allowing investors to save more now will mean more tax revenue to pay for the rising health costs of the Baby Boom generation.

Scott Brison, Tory finance critic, says higher RRSP limits would help stem the brain drain. And by raising the foreign content of this increased room to 50%, Canadians would be able to get more international growth out of the little RRSP room they are permitted.

The whole appalling exercise is rife with hypocrisy. On the one hand, taxpayers making more than $86,000 are considered "rich" and can't increase their retirement savings limits till 2004.

On the other, MPs making $110,000 are not "rich" and desperately need an immediate 20% raise and 100% more pension room. And instead of waiting for three years to get it, they're ramming the legislation through in two weeks.

We think we'll uncork that vodka now. Cheers.

People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.
--George Orwell--

PUBLICATION The Ottawa Citizen
DATE Thu 07 Jun 2021
SECTION/CATEGORY News
PAGE NUMBER A5
BYLINE Kelly Cryderman

---------------------------------------------
Defence Department firefighters demand 2% pay boost: MPs are getting 20% more, they argue
---------------------------------------------
The day after federal MPs are expected to vote themselves a 20-per-cent pay raise, civilian Defence Department firefighters will be picketing in front of CFB Petawawa to show their anger and frustration over the fact they've received only a two-per-cent increase in the past seven years.

These are 38 government workers who have to put on flak jackets and helmets before they head into a forest fire, because they're working in an area used as a firing range, says Platoon Chief Jerry Rice. ``When we're fighting these fires, there's always the danger that a bomb or rocket or whatever will go off.''

The firefighters will be picketing at the entrances of CFB Petawawa starting at 6:30 a.m. tomorrow. Chief Rice says a firefighter in his department with four years experience is paid $40,456 a year -- about $10,000 less than a firefighter with the same experience working for a small municipality like Deep River or Pembroke. And he says it's work that's generally a lot more dangerous.

``Who wants to come to work when they don't feel appreciated or feel that they're being paid what they are worth?'' he says. ``We have people leaving and going to outside fire departments. It's just a mess.''

In terms of the MPs' likely raise to $131,400 a year -- legislation which will still have to go to the Senate if it is passed in the House of Commons today -- he says, ``it drives me nuts. They get 20 per cent and we're way more than 20-per-cent behind and they're offering us two. It's ridiculous, totally ridiculous.''

There is also a new physical fitness test the government is implementing. ``If you don't pass it, they're going to fire you,'' Chief Rice says.

The CFB Petawawa firefighters, like hundreds of other civilian firefighters at military bases across Canada, work for the Treasury Board and are members of the Union of National Defence Employees (UNDE) under the Public Service Alliance of Canada.

The Treasury Board has offered the firefighters two per cent per year for three years. After a six-year wage freeze, then a two-per-cent raise last year, the union's counter-offer is four per cent a year for three years. ``Everybody else is getting more, including the MPs. We're not looking at 20 per cent,'' UNDE executive vice-president Peter Cormier says, laughing. ``We want a little more this year because the government has told us they have so much money.''

(from the Sun)

Thursday, June 7, 2021
PM poised to get record pension
'The greatest parting gift a prime minister has ever given himself'

By MARK DUNN, OTTAWA BUREAU

OTTAWA -- Prime Minister Jean Chretien is poised to receive the largest pension in Canadian political history under a new pay package he's fast-tracking through Parliament.

Chretien's decision to make wage increases retroactive to Jan. 1, and not April 1 as recommended by a government-appointed commission, means the PM could leave office next year and receive a $175,325 annual pension.

The millionaire prime minister's pension was confirmed by government House Leader Don Boudria's office.

The pension is based on the PM collecting 66% of his new $262,988 salary -- the same salary as the country's top judge.

That works out to an 82% increase and compares to a pension of $96,066 the PM would receive under the current pay system, says the Canadian Taxpayers' Federation.

Chretien, at age 67, is entitled to his pension the day he hands in the keys to 24 Sussex Dr.

"In the history of Canada this is the greatest parting gift a prime minister has ever given himself," said CTF president Walter Robinson.

"Think about it. With this new retirement package he'll make more in retirement on a pension than he's making right now as the prime minister," Robinson said.

Chretien is one of two prime ministers who qualify for a PM pension.

MULRONEY ELIGIBLE IN 2004

Brian Mulroney is eligible for an $89,546 pension in March 2004 when he turns 65, says the federation.

Prime ministers need to serve four years in order to be eligible for a pension.

Canadian taxpayers can scan the salaries of all MPs when the annual public accounts are tabled in the Commons in September. The documents give every detail on House of Commons expenditures.

Chretien's pay bill that gives the PM a 42% raise and MPs and senators 20% increases, will easily pass in the Commons. MPs will make $131,400 while senators will see their wages boosted to $105,840.

The bill was debated in the Commons yesterday and dozens of opposition amendments were killed by the Liberal majority in the House.

Accordingly, why not pass similar legislation for the CF? (i.e. "... automatic annual increases equal to the yearly increase in the industrial wage index, plus about 1%. ")

It sure would be interesting if enough concerned Canadians contacted their Member of Parliament, or even wrote the Governor-General (since, after all, she is the CinC of the CF) ...

Here's where I got this idea (another article from the Sun):

Raises? You ain't seen nothin' yet
With today's vote, the PM guarantees himself an annual pay hike of $8,000, even if he never came off the golf course

By Greg Weston

OTTAWA -- It's payday in the nation's capital, and the Hill is soon to be alive with the sound of MPs and senators laughing all the way to the bank with the ridiculous salary and pension increases they are voting themselves today.

While the whopping 20% hike in pay and pensions -- 42% for Jean Chretien -- is enough to turn stomachs from sea to sea, the worst is yet to come.

Hang on to your wallets, dear readers -- our venerable politicians are about to put their personal bank accounts on auto-siphon.

Nicely buried in the parliamentary pay package, expected to be passed today in the Commons, annual indexing provisions could double the initial 20% pay hike to 40% or more by the time Canadians get a chance to throw some of these bandits out of office in the next election. (Sorry, the senators are with us forever.)

In one of the great political copouts in years, the legislation being passed today effectively gives MPs and senators the same annual percentage pay increases as judges.

(MPs claim this arrangement will relieve them of the unseemly task of having to vote themselves pay hikes. The truth is it will mainly relieve the politicians of future responsibility -- and public accountability -- for lining their pockets with more public money every year.)

Lucky for our underprivileged parliamentarians, the Canadian judiciary would appear to be only slightly less greedy than our federal politicians.

Judicial salaries are set every four years by a special three-person commission not unlike the outside panel which recently recommended the 20% windfall for MPs.

During last year's review by the latest judicial pay commission, the judges demanded an immediate pay increase of only 26%.

The government recommended a 5.7% increase until the commission suggested 11.2%, at which point the government apparently changed its mind and decided that doubling its initial recommendation was just dandy.

While the government was in a generous mood, it agreed judges should also get automatic annual increases equal to the yearly increase in the industrial wage index, plus about 1%.

Since the wage index for the past year was 2.3%, judges got an automatic raise of about 3.3% on April 1. With national wage settlements on the increase, those annual pay hikes could easily hit four or five per cent over the next few years.

That's a nice deal if you are Jean Chretien.

The legislation being rushed through the Commons today ties the prime minister's salary to that of the chief justice of the Supreme Court.

At his new $262,900 pay rate, Chretien is not only getting an immediate raise of 42%. Under the judges' indexing formula to which the PM's pay will be tied, he is virtually guaranteed an annual raise of more than $8,000, even if he never came off the golf course.

Similarly, at their new fattened wage of about $131,000, MPs will be getting an automatic annual raise under the judges' formula -- raises which are compounded annually; raises upon raises.

In 2004, a new three-person commission will recommend a whole new round of pay hikes for judges.

And MPs will cash in yet again, only next time it will be all automatic, without the need for so much as an apology in the Commons.

Pass the Tums.

Speaking of the judiciary, we have it on good authority that the justices of the Supreme Court have let it be known they won't be presiding over the official enactment of the parliamentary pay package.

The government's original plan was to pass the legislation in the Commons and the Senate today, and give it royal assent into law on Friday.

It is common for a member of the Supreme Court to stand in for the Governor General during these largely ceremonial proceedings in the Senate chamber.

But the judicial pay package is apparently in the same pile of bills as the parliamentary compensation legislation, all awaiting royal assent.

And the nation's top jurists (unlike MPs and senators) are having nothing to do with approving their own pay increases, ceremonial or otherwise.

Ergo, MPs will just have to go on salivating until Madam GG herself returns to the country next week.
- 30 -

P.S. (The snail mail address for the GG is:
Her Excellency the Right Honourable Adrienne Clarkson
Governor General of Canada
Rideau Hall
1 Sussex Drive
Ottawa, Ontario
K1A 0A1
(no postage necessary)

The correct salutation in any correspondence is:
"Excellency"

And, if anybody wants to e-mail the GG here's her e-mail address: [email protected]

Feel free to pass this info on to your friends and family).