The Cost of Democracy

With all the signals saying that the spending spree is all but over and the austerity program is about to commence I thought it appropriate that I take a look at some of the costs of running our parliamentary system. I have extracted the main figures from a number of sources and have provided a link to each of them, I no doubt have missed some stuff and its hard to know what to include in such a synopsis. Building maintenance, ministerial assistants and high level civil servants etc etc? Nor is it clear if such cost as the PMO (does the taxpayer pick that up?), advertising telling us what a great job they are doing, and other such expenses unrelated to directly administering a specific program should be included.

That said here is what I have come up with for your interest……..

Pensions

In looking into exactly what sort of pension our parliamentarians receive I was struck mostly by the ratio of how much they contribute to the “plans” and how much we (the taxpayer) contribute to the fund. I note that there are two funds, the “retirement compensation” fund and the “retiring allowances” fund, it appears one funds the “allowance” that an MP (or Senator) get if he ceases to be a member after less than 6 years and the other funds the retirement pension available (at age 55, or before if they served prior to 1995) to those who have served more than 6 years.
The “contributions” by MPs and Senators to the pension plan is in the order of 10% but the following figures tell how much we contribute by comparison.

2007 / 08 (figured rounded)
Members contribution to RC fund $1.6 M
Members contribution to RA fund $2.5 M

Total member contributions $4.1 M

Government contribution to RC fund $16.5 M
Government contribution to RA fund $5.6 M

Total Government contributions $22.1 M

I do not begrudge these folk a decent pension but that we pay for 90% of it is a bit much given that their salaries whilst in office start at $130,000 (senator) to $160,000 (MP) and can go as high as $180,000 to over $200,000 depending upon their position. Given the economic realities faced by “ordinary” Canadians is it to much to ask for them to contribute say 50%? They currently receive 3% of their annual compensation per year of service to a maximum of 75%. i.e. starting at around $26,000 after just 6 years of service, more if they have served longer or held a ministerial position. Our current PM for instance would receive over $150,000 per year if he retired today!

The source for the above information is the “Report on the Administration of the Members of Parliament Retiring Allowances Act for the Fiscal Year Ended March 31, 2008” where you will also find historical comparisons.

For more information see MPs Salaries, Remuneration, Pensions and Entitlements and this older article from retired MP David Kilgore

Senate Operations (figured rounded)

Senators salaries, pensions, travel & staff $36.7 M
Chamber operations, salaries etc $6.3M
Committees’ expenditures and support etc $8.6 M
Administrative support services etc $25 M

Total about $76 M



MembersExpenses (PDF)

Individual members expenses vary considerably, for the purposes of this article we will just look at the totals for 08 / 09

Members Office (figures rounded)
Office staffing etc $73 M
Other office expense $12.5 M

Services provided by the House
Travel $27.5 M
Printing $10 M
Other $6.5 M




The bottom line

The cost of running the HoC can be found in the Report to Canadians 2009:

Program expenditures: (figures rounded)

Members and House Officers $125 M
(includes salaries & pension contributions)
Office of the Clerk and Secretariat $1.9 M
Office of the Law Clerk $2.7 M
Various Services provided $147.4 M

Members and House Officers (S) $113 M
Employee benefit plans $34 M


Total $425 M

Members expense not included $85.5 M
Members travel expense (not inc?) $27.5 M

Total $543 M

That’s abt $39 per vote cast, or if you prefer abt $23 per eligible voter, put that way this does not seem that bad but remember this does not include the cost of Provincial and Municipal governance, nor the cost of administering the various programs provided by government. It also makes that $1.95 per vote to assist smaller partys with election expenses look very reasonable.

For a comparison of various compensation between the provincial legislatures and the federal legislature see Remuneration-Comparisons.pdf from here. I was unable to find an overall cost of running Provincial Legislatures which no doubt is available individually from each provincial parliamentary web site. However the average BASIC compensation and allowances for an MPP/MLA seems to be about $88,000

Just for interest statscan says there are 3.4 M “public sector workers” in Canada (20% of the workforce) earning an average of slightly over $1000 a week ($50,000 year)
See Average weekly earnings and Employment industry .

Seems to me those folks who are struggling in these hard times might have some difficulty with any austerity program cutting support services whilst such a large portion of our tax dollars goes to politicians and government employees. There would seem to be room for some “efficiencies” here but as in the private sector I doubt whether any reduction in expenditures will start at the top!

The cost of democracy is high but are we getting value for money or simply being scammed? Support Democracy - Recommend this Post at Progressive Bloggers