Saturday, July 23, 2011

MLAs get thousands for 22 minutes work on committee

MLAs Norm Letnick and Rob Fleming got an awful lot of extra money for almost no work last year.

Letnick, a Liberal from Kelowna-Lake Country, was paid $13,353 - on top of MLAs' base pay of $101,859 - to chair a legislative committee that met once, for 22 minutes. Fleming, a New Democrat from Victoria-Swan Lake, was paid $8,903 as deputy chair.

The two led the grandly named Select Standing Commitee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills.

The committee met once in the last fiscal year, rubber stamping two housecleaning bills for non-profits. It took less than half an hour.

Letnick and Fleming didn't set the pay. All MLAs approved the pay rates after a 2007 report on MLAs compensation. They took the money though.

They weren't alone. New Democrat Jenny Kwan was paid $4,437 as deputy chair of the legislative initiatives committee, which met twice, for three hours, to discuss the HST petition.

The legislative committee on children and youth met four times in the fiscal year. Chair Joan McIntyre was paid $13,353 for the work; deputy chair Maurine Karagianis, $8,206.

That was a more serious committee. There was work between meetings and a five-and-a-half hour session on poverty in Vancouver. But the chair was still paid more than $3,000 per meeting.

On one hand, you can't fault the MLAs. The pay scale was put in place by the legislature. Their parties backed them for the positions.

Letnick notes he had the second lowest travel expenses among Interior and Northern MLAs and worked long and diligently. "I work really hard to make sure I can defend everything that I have control over," he said.

Still, $13,353 is a lot of money for presiding over one meeting.

The pay didn't used to be so grand. Until 2007, MLAs got $6,000 for chairing a committee and $3,000 for serving as vice-chair.

The committee set up to review MLAs' compensation and expense allowances decided that wasn't enough.

The three-member panel's recommendation of a 29-per-cent increase in base pay, from $76,100 to $98,000, got most of the attention. But it also recommended big increases in the wide range of extra pay that sees just over half the MLAs in the legislature get a salary top-up. (The actual average pay rate is over $120,000.)

Compensation for committee chairs, for example, more than doubled, from $6,000 to $14,700; vice-chairs got an even larger increase, from $3,000 to $9,800. The committee didn't explain why the compensation should be tripled.

Parliamentary secretaries - helpers for ministers - were receiving an extra $6,000 a year. Now they are paid an extra $15,000. Caucus chairs got $6,000. Now they are paid more than $20,000.

And of course the extra pay for being premier doubled, from $45,000 to more than $90,000.

The increases, including a much more generous pension plan, were all recommended by an independent panel.

But the government picked the panelists - two senior lawyers and a business professor. Their average income, I'd wager, was well over $200,000. Their perspective on compensation would inevitably be skewed by their own experiences. Unlike past compensation committees, there was no one earning the average B.C. wage of abut $40,000.

The money, in the grand scheme of things, is small. MLAs work long hours and, in my experience, mostly seek office out of a real desire to improve life in their communities.

But the huge increases show a disconnect between the lives of British Columbians who are also working hard, taking on extra tasks and count themselves fortunate to get any pay raises. The $13,353 Letnick got for chairing one 20-minute meeting is 23 per cent more than a disabled person on assistance gets to live on for an entire year.

MLAs deserve fair pay. But it is troubling that a sense of entitlement seems to have taken hold, one that distances them from the realities of life for most British Columbians.

Footnote: For more than 20 years, the Washington state has had a 16-person salary commission to deal with pay for elected officials. One member is selected at random from the voters' list in each of nine geographical areas. The politicians appoint five members - one each from universities, business, personnel management, the law and organized labour. The state's HR department and universities get to name one person each. Other states have taken similar approaches.

Thursday, July 21, 2011

Corporate sponsors and special access to the premiers

An editorial today in the Times Colonist:

The unseemly premiers

Convention organizers often seek sponsors willing to pay to curry favour with attendees.

But the country's premiers shouldn't be asking corporations to subsidize their meetings.

When provincial and territorial premiers meet in Vancouver this week, the events will be subsidized by business donors, commentator David Schreck notes.

The Insurance Brokers Association of Canada, lobby group for that industry, is the platinum sponsor. Amgen, campaigning for public funding for an expensive cancer drug, is a gold sponsor, along with CN and the major beer companies.

Encana, a major player in Alberta and B.C. gas fields, and a beneficiary from government decisions on royalty rates, is a silver sponsor. So is the lobby group for research-based pharmaceutical companies and Borealis Infrastructure, a player in public-private partnerships.

Licia Corbella, in a column on this page on similar sponsorships for a federal-provincial energy ministers' conference in Alberta, notes the damage done.

The companies are spending money in the interests of shareholders. They must feel they will gain special access to the premiers, or favourable consideration in future. Even if they don't, the perception will exist.

Corporations who choose not to pay up will wonder if that will be held against them, by the politicians or the conference organizers.

And ordinary citizens, or businesses that can't pay, must worry that their concerns will come second to the interests of the corporations that donated.

Tuesday, July 19, 2011

HST a cash cow, and other news from the Public Accounts

The HST as cash cow, the incredible shrinking deficit and three other interesting things from the Public Accounts, the final report on the province's financial performance in the last fiscal year.
First, the Public Accounts reveal that, government claims to the contrary, the HST represents a significant tax increases targeted at individuals and families.
The HST was in effect for the final nine months of the last fiscal year, which ended March 31. It pulled in $4.2 billion, or about $467 million a month.
In the previous year, the PST take was about $392 million a month.
So the HST provides government with an extra 19 per cent - roughly $900 million more a year than the PST, or about $210 per man, woman and child in the province. (That's slightly overstated - about $100 million of the increase is due to economic growth, based on the government's budget assumptions.)
That's on top of the HST impact of shifting some $2 billion in taxes off corporations and businesses and onto individuals and families.
Second, the government continues to introduce budgets - except for the 2009 election budget - with huge cushions. The budget forecast a deficit of $1.7 billion. The actual deficit, according to the public accounts, was $309 million. As recently as February, the government was still forecasting a $1.3-billion deficit.
Tax revenues were $780 million higher than expected, in large part because the government underestimated HST revenues in the budget. Crown corporations revenues were $181 million over budget, mainly because the government took $180 million more from B.C. Hydro revenues than it expected.
And spending was reined in. Overall, spending increased $903 million, or 2.3 per cent over the previous year. But that largely reflects health spending, up 4.1 per cent. Education spending - K to 12 and postsecondary - was up about one per cent. Other spending was effectively frozen, despite the huge pressures in areas like Community Living B.C.'s support for people with developmental disabilities.
Prudence is a virtue, of course; better to err on the side of caution and all that. And some room for unexpected occurrences has to be built into a $30-billion-plus budget.
But consistently coming in under budget by huge amounts cheats MLAs and the public.
A more accurate budget forecast might have resulted in different choices by the legislature. Perhaps, had MLAs known the deficit was to be $309 million, not $1.7 billion, they would have voted to spend more on support for schools or additional surgeries.
Or they might have decided there would be room for substantial across-the-board income tax cuts, given the relatively small deficit.
Those options were removed because of the inaccurate budget presented to the legislature.
Third, the Public Accounts report that the B.C. economy grew by four per cent in 2010, third strongest among the province. That's obviously good news and the increased economic activity played a role in the increased government revenues. But the report warns growth is expected to slow to two per cent this year.
And it noted the recovery didn't ease the unemployment rate. Full-time employment increased 1.1 per cent, and the number of people working full-time is still below 2007 and 2008 levels. Unemployment improved slightly, to 7.6 per cent - the highest level since 2003.
Finally, the accounts reported the province's total debt, despite recent deficits and infrastructure spending, increased by $3.3 billion, to $45.2 billion. Taxpayer-supported debt equals 15.7 per cent of GDP, a manageable level.
The NDP did highlight a big jump in long-term commitments that will bind future governments - and taxpayers - well into the future. The contracts, for everything from payments to private companies building hospitals to highway maintenance, increased from $53 billion to $80 billion in one year. More than half the commitments - $45 billion - bind B.C. Hydro to buy expensive electricity from private power companies.
Footnote: The Public Accounts - available online at - also reports on MLA pay and expense claims.
The base pay for the fiscal year was $102,000. But 44 of the 85 MLAs qualified for additional payments because they were in cabinet, chaired committees or played various other roles.
The actual average pay for an MLA was a record $120,198.

Monday, July 18, 2011

So who's managing the government's HST sales job? It's a secret

Sean Holman filed an FOI to find out who was working in the government's HST sales office and managing the multimillion ad campaign to convince people to vote to keep the tax.
But the government wouldn't reveal the names of anyone, including a "special adviser" from outside government.
See his piece here.