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moneysense.ca, 10/07/06
Feeding Your MP’s Mortgage
While a certain former Deputy Prime Minister goes around advising us that (more) taxes (for the plebeians) will set us free, elected MPs have given themselves a Canada Day gift: they can now apply their per-diem meal expenses to their mortgages they take out on a second home in Ottawa.
Members of Parliament already earn an average salary of $150,000 (more than three times the median household income in Canada) and are allowed a yearly allowance of up to $24,000 when they are travelling more than 100 kilometres from their principal residence. Also, they are allowed to claim a $75 per diem for meals when Parliament is in session and $25 per day for accommodation for every day of the year. They are now allowed to apply their meal allowance towards their mortgage payments. The Toronto Star reports that both the allowances amount to more than $17,000 a year. It must be very nice to have the option of buying a second home subsidized by taxpayers, in addition to a very generous salary, tax-free allowances and gold-plated pension plans.
Related Links:
- Hats off to Tory MP Garth Turner for highlighting this issue on his blog (here, here and here).
- Outrage from the Canadian Taxpayers Federation.
moneysense.ca, 10/07/06
Hi CC,
At first read, I was quite outraged by this one, as most I imagine are as well. However, after a second read, I don’t think the issue is whether or not its ethical/unethical for MPs to apply their per diems to mortages, but rather to evaluate the amount of the per diem.
In the private sector, an employee is provided a per diem (rather than an reimbursed expense with receipts) when it is in the interest of the company to offer it – i.e. the per diem process spares the company the administration of expense/receipt management and its actuaries have calculated a per diem that is equal to (or slightly less than) the actual average expense. Once granted, an employee is free to use their per diem as they wish. If I elect to eat at Subway for 3 meals a day and pocket $40 of my $60 per diem, its my choice. Conversely, if I like steak for dinner with a nice chiante, I may have to kick in an extra $20. Again, this is my choice. Should I take the frugal route (accepting its not in the spirit of the per diem) whatever I spend the extra cash on – be it new furniture, movie tickets, some dividend ETFs OR extra mortgage prepayments – is irrelevent.
As a result, I think the emphasis on the ‘meals for mrtgages’ aspect of the issue (in part lead by Garth Turner) is actually somewhat distracting, and the real issue would appear to be a per diem that is so excessive (particularly in light of other allowances as noted) it tempts such behaviour.
I think the issue highlighted in your opening sentence is far more important all ’round than the issue of our MPs salary and benefits.
No to create a false dichotemy but would you prefer your MP to worry about how he’s going to make his mortgage payments or how you, as a constituent are going to make your mortgage payments?
If MPs are spending their time managing their own personal finances that is time taken away from tackling issues of national importance.
True, there is a litany of examples of MPs abusing this privilege of office. However many MPs simply don’t have the tiem to spend that kind of cash on food – airport foodcourts are a frequent eatery for a lot of our MPs.
Also, if the job of being an MP were not financially incented then we’d deter people who have a lifestyle to maintain who could make money elsewhere. I’m sure know that the lawyers in office would make more money as lawyers than they would as MPs.
Also, removing the decent salary encourages those people who are independently wealthy to enter office, and these people in general rarely represent the constituency that elects them by default.
Living in comfort and being free from the distractions of fulfilling necessities is the cornerstone of effective decision making.
I would agree with Jeremy on this point. We want effective MP’s in Ottawa, and to encourage good people to run there must be a monetary incentive. Having said that MP’s are already among the highest paid people in Canada. Their base salary puts them in the top 3% of wage earners in the country, add in cabinet member top up, rental home allowance, constituancy allowances, committee allowances etc etc etc and they really move into the class of wealthy citizens. I for one don’t begrudge MP’s their salary, I only hate how sneakily raises and top ups are quietly added on to base salaries without what I consider full transparancy to the tax payers. I say publish the salaries, the benefits, the perks, the pension plan etc and let the tax payers have a good look. Our MP’s deserve to be paid as well as executives of companies do, but those executives are required to disclose all salaries and benefits as our MPs should also. Then we as citizens have to hold them to account when things go wrong, and reward them when they go right.
Conservatives, Liberals, same shit different pile. Canadian Income Tax was meant to fund the world war, then be removed. It didn’t happen. Now we have politicians using it as their own personnal piggy bank, as it were, and as long as Canadians remain complacant about it, it’ll get worse before it gets better. It’s not about making this a better country anymore: It’s about who will get to use the piggy bank to line their pockets with. Canadians need to wake-up and realize we live in a quasi-totalitarianist government disguised as a democracy. We need to realize we have more then just two choices when it comes to election day: perhaps we need to further explore our options.
Income tax was instituted as a war measure but it was never stated that it would be removed after the war. The finance minister of the day instituted the tax with a stipulation that it be reviewed upon completion of the war. It was reviewed and the minister(s) of the day continued it.
The thieves salaries are listed here:
http://www.taxpayer.com/main/content.php?content_id=6
Thanks everyone for your thoughtful comments. While I agree that MPs should be well compensated, there should also be an element of public service in an MP’s job. Just the salary for an MP (we are talking here about a MP and not cabinet ministers or the PM) is very generous in my opinion. And it is outrageous that they are awarding themselves a 25% hike in the allowance and now the mortgage into meals program. The MPs already get a $24,000 yearly allowance. Why the per diems on top of that at all?
That’s a very good question regarding why hte per diems are necessary. I think that’s more of a political question than anything else – if they were simply going to give themselves the equivalent value in a straight-up raise there would be a knee-jerk reaction by the media and constituents about our corrupt politicans luxuriating in the piles of cash that come out of our pocketbooks.
This way it takes care of keeping the position viable, which given the extreme level of work involved for the typical MP takes some serious doing, and keeps people from throwing hairy fits.
In response to JC, I would contend that everyone is well aware there are more than two choices and that is more than plain in the results of the past election. The NDP and the Bloc Quebecqois (which both have a consistent history of supporting salary and benefit increases for MPs) did very well.
To place this in perspective, the average annual income for an MP is lower than that of a Governor (an position with ostensibly lower responsibility) in the US. In the US the incentive of money doesn’t come from government salary it comes from lobbyist donations and hand-outs to officials who are willing to support their cause – this to me is actus reus if I ever saw it.
To say that our MPs are the richest or even close to the richest people in Canada is specious. In 1999 there were about 56,218 people who make significantly more than our MPs in the province of BC alone – none of these people were publically accountable and I’m willing to asser their job security was better than a Canadian politician’s.
In all, the issue our MPs pay is, at the moment anyways, a pretty low priority in a nation rife with policy conundrums. Until I see them regularly doing interviews with the press while golfing on their new ranch, or collecting Rolls-Royces instead of what I usually see of interviews on parliament hill with our MP caked in makeup still looking haggered and underslept. I don’t pity them, but I don’t envy them either.