By Franco Terrazzano,
Canadian Taxpayers Federation
(This column originally appeared in the Calgary Sun)
There’s no doubt elected officials are working hard to manage the COVID-19 crisis, but with many businesses closing their doors and families worrying about their next grocery bill, politicians need to show solidarity with the people they represent and reduce their own pay.
Between the coronavirus health pandemic, the global economic shutdown and the collapsing price of oil, this triple whammy may present one of the most challenging times Alberta has ever faced.
The effects have already been devastating for countless Alberta families and businesses. Once Canada’s economic engine, Calgary now has the highest unemployment rate of any major Canadian city. The rest of the province isn’t faring much better. In March alone, 117,100 Albertans joined the ranks of the unemployed.
While these numbers already feel like a punch to the gut, Premier Jason Kenney has warned that things could get worse before they get better.
“The end of the pandemic will not be the end of the economic downturn, the likes of which we have not seen since the 1930s,” said Kenney.
Government coffers are also being impacted.
“Alberta’s budget deficit this year may triple from $7 billion to almost $20 billion,” warned Kenney. “We will face a great fiscal reckoning in the future.”
With government budgets tanking, elected officials will have no choice but to make tough decisions in the months and years ahead. For Alberta’s elected officials to successfully implement these tough choices, they will first need to show leadership for the bureaucracy and solidarity with their citizens by making tough decisions with respect to their own financial well-being.
To the credit of Alberta’s United Conservative and New Democrat politicians, last summer every MLA took a five per cent cut while the premier took a 10 per cent cut.
But at $121,000 annually, Alberta’s rank-and-file MLAs still make significantly more than their counterparts in other provinces. Alberta’s recent budget outlines the importance of bringing government compensation in line with similar provinces. Now is the perfect time to institute this policy at the political level.
A move to the Ontario-West average (excluding Alberta) would see Alberta’s MLA pay drop to $105,120. Kenney already receives less than the Ontario-West average for premier pay. However, dropping the standard MLA pay would reduce Kenney’s pay to $170,364.
Local politicians must also show their citizens that they are willing to share in the tough times.
Prior to the last municipal election, Calgary’s independent citizen commission found that councillors in Edmonton and Calgary receive higher salaries than their counterparts in other major Canadian cities. With both cities shedding jobs by the thousands, bringing pay in line with other Canadian cities is an obvious first step elected officials could take to show they understand the hardships on the ground.
Councillors must also bring their benefits in line with the benefits available to their constituents.
Before the current economic crisis sunk its teeth into Alberta, the Fraser Institute found that an overwhelming four out of five Albertans working outside of government don’t have a workplace pension. Only six per cent of working Albertans outside of government receive a lucrative defined benefit pension plan.
Calgary councillors should take a page from their Edmonton colleagues’ pension-playbook and shift their lucrative defined benefit plan to an RRSP-style pension model. Calgary’s Mayor Naheed Nenshi should also scrap his second and completely taxpayer-funded pension that no other major Canadian city mayor receives.
Many politicians in Alberta deserve credit for working around the clock during this crisis. But politicians should never be receiving compensation that is distant from the realities facing the people they represent. It’s time for politicians to show solidarity with Albertans and make the tough, but right, decision to reduce their own pay.