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Author of pay report stands by raises for Alberta politicians

Retired Supreme Court of Canada Judge John Major in Ottawa June 17, 2010.

Chris Wattie/REUTERS

The man who recommended Alberta Premier Alison Redford receive a nearly 60 per cent pay increase over three years stood by his recommendation Thursday even after the premier said she wouldn't accept it.

"I was not asked to write a report that I thought the premier would accept," said retired Supreme Court justice John Major.

"I wrote a report on what I thought the premier's job was worth. If the premier doesn't see her job as being worth what I recommended, she's perfectly free to not accept it.

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"I didn't write this report with any eye on what the politicians thought of it."

Few seemed to think much of what Judge Major wrote.

Liberal Leader Raj Sherman and Wildrose justice critic Shane Saskiw denounced his suggestion for a defined-benefit pension as well as the continuation of a tax-free allowance for members of the legislative assembly. Mr. Sherman went further and insisted that Ms. Redford should roll back her salary to what it was before politicians voted themselves a 30 per cent increase in 2008.

Both men also criticized keeping a portion of MLA pay tax-free, a provision in the federal tax code that saves Albertans about $2 million a year in federal taxes their would go to Ottawa.

"We believe everyone should pay taxes," said Mr. Sherman. "It's a matter of principle."

Judge Major's report also recommended significant changes to how Alberta's politicians are paid.

He pointed out the premier earns less than a low-ranking judge and less than many senior civil servants. He also concluded that the so-called "transition payments" departing politicians have received since the early 1990s in lieu of a pension are too rich.

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In all, Judge Major said, regular MLAs should receive a base wage of $134,000 a year – about the same as the average pay and benefits in the other provinces and territories.

Adding pension payments and other benefits would bring Alberta's total pay packet to just under $160,000. That figure is about $17,000 less than the current amount.

But Judge Major concluded the premier should be earning a base salary of $335,000 by 2015 – just shy of a 60 per cent increase over her current pay package of $211,000, already the highest among provincial premiers.

Ms. Redford said Wednesday she wouldn't accept the increase.

Judge Major explained his recommendations aren't based on what politicians receive elsewhere in the country. Doing that only results in jurisdictions "feeding off one another," he said.

"I prefer to look at what the premier actually does."

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He said his recommendations are based on research by consultants with expertise in executive compensation.

Judge Major suggested problems began in 1993 when then-premier Ralph Klein abolished the old pay structure, including MLA pensions that were considered too generous.

Transition allowances for departing politicians were brought in instead, but became a target for heavy criticism. Former Speaker Ken Kowalski, who did not run again in the recent Alberta election, is set to walk away with $1.3 million. Close behind him will be former premier Ed Stelmach, who will take home an estimated $1 million.

Judge Major's review initially met indifference. At least two hearings were cancelled due to a lack of participants.

But interest grew after the Canadian Taxpayers Federation revealed that MLAs on an all-party legislative committee that hadn't met in more than three years were still being paid $1,000 a month.

The money-for-nothing committee eventually became a major headache for Ms. Redford during the campaign. She tried to put it to rest by ordering all the Tories on the committee to repay the money. She also announced that transitional allowances would be suspended going forward.

Scott Hennig of the Canadian Taxpayers Federation praised Judge Major for trying to get rid of the complicated spiderweb of separate pay for serving on committees.

But he said Judge Major's proposals for a defined-benefit plan should be scrapped because such plans "by their very nature" run unfunded liabilities.

He also criticized the suggestion that a portion of MLA pay continue to be tax-free. The transparency a fully taxable paycheque would bring would be well worth the extra $2 million Alberta MLAs would send to Ottawa, Mr. Hennig said.

He also said that Judge Major made a mistake in examining private-sector executive wages as a basis for setting MLA pay. Pay levels should be determined by a citizen's committee and ratified through referendum, he said.

Judge Major tried to add some perspective to the debate by pointing out that the total amount of all compensation paid to the province's MLAs equals about 0.0146 per cent of the Alberta budget.

His report now goes before Ms. Redford's cabinet, which must decide which parts of it to implement and which to modify or reject.

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