Federal Politician Salaries – Higher Than You Think
When I ponder about politician salaries, I tend to think very middle of the road, middle class type wages. However, this is not the case as disclosed by a recent issue of MoneySense Magazine. It appears that even newly elected federal MPs garner a six figure salary which doesn’t include the reduced term gold plated defined benefit pension that they are offered. Their salaries are very generous and perhaps a slight conflict of interest when they can vote themselves a pay raise.
Here are some of the salaries of politicians at a federal level (via MoneySense) not including travel, housing, office allowances:
- Backbench Member of Parliament (MP): $157,731
- MP with odd job appointments (ie. caucus chair, commitee chairman etc): $163,415 – $196,910
- Leader of Federal Party: $211,425
- Junior Cabinet Minister (ie. ministers/secretaries of state): $214,368
- Senior Cabinet Minister/Opposition Leader/Speaker of the House: $233,247 + car allowances
- Prime Minister: $315,462 + large house budget + car allowances
As I mentioned before, the salaries indicated above do not include perhaps the most lucrative defined benefit pension available in Canada. Typically, a government worker (non political) needs to serve around 30 years before they qualify for the maximum benefits under a DBP. Not members of parliament however, they can start receiving a very generous pension after a short term which is then adjusted for inflation every year. Here are the stats from the MoneySense article:
To qualify for a pension, you have to serve as a member of Parliament for a mere six years. A backbencher with six years on the job who retired at the end of this year would receive an annual pension of $27,213 once he or she turns 55…
… If the MP sticks around for another four years, his or her pension hits $43,355 a year.
… For you and me to receive and equivalent payout in retirement we would have to put $80,000 into our RRSPs each year for 10 years.
..The average MP who is eligible to collect a parliamentary pension takes in a very comfortable $49,985 a year. In fact, there are 70 ex-MPs who collect more than $70,000 a year.
Looks like a career in federal politics can be fairly lucrative! What are your thoughts? It seems that if you include the lucrative pension and other benefits that MPs are offered, they are paid in the same salary range as Doctors!
37 Comments, Comment or Ping
1. Philip in North York
Does anyone know what happen to the MP’s pension if the MP works in another position after retirement? I remember that there must be 5 years of cooling period before getting new paycheques, but I know nothing else.
I don’t mind paying six figures to working MPs because they probably need more than their salary to hold their job in House of Commons anyway. Senate is a different story.
Oct 5th, 2009 @ 8:21 am
2. Scott
@ Philip: “I don’t mind paying six figures to working MPs because they probably need more than their salary to hold their job in House of Commons anyway.”
Excuse me? I ask that you define/explain your position. Thank-you.
Personally, I have a huge hate-on for politicians. Why? Because I work in close proximity with them. Perhaps it is because I live in B.C. where politicians are…let’s put it this way, only Quebec has had more political “scandals”. The stuff (said politely) that I witness/have witnessed is disgusting, vulgar, childish, greedy, inept, etc. — I guess all things politico.
I work for the government (aka public servant). The new B.C. budget came out and one of the points was that no public servant was going to get pay increases for a year. You know what happened? The very day BEFORE the budget came out, I got an almost 8% raise.
Thanks, but what a weasle-y move! And that is a mere one of a lengthy, lengthy list.
Do I think MP etc. should make this kind of money? Perhaps (with a very heavy leaning towards ‘no’). Do I think provincial politicians should make what they do? NO.
(I won’t even start on the B.C. union situation!)
A while ago I wrote (shamefully on some other blog!) a comparison of the PM’s salary/perks versus that of the US Prez’ salary/perks. Based purely on the size of each countries tax-payer base, our PM (and thus MPs) is grossly over-paid.
I can’t talk about this any more.
Good day.
Oct 5th, 2009 @ 10:30 am
3. guinness416
The salaries look fine to me, but added to the expenses and benefits, yeah, it’s awfully big bucks. Occasionally you read about ex-politicians having cars and bodyguards long after the fact and wonder what the total cost of all those random perqs are. Interestingly Canada always gets trotted out as an example in Irish media when speaking about the cost of politician’s salaries – here there is far less “politicians per capita” than back home in Ireland.
That said, as with many high-paying jobs, you couldn’t pay me enough to do it!
Oct 5th, 2009 @ 10:47 am
4. DividendMan
I think we’re looking at this the wrong way. The % of the total budget that is spent on the salaries of the people who make the most important decisions is almost zero.
We should pay them more – much more, in the millions I would say. At least this way we would attract top talent into the game instead of having this talent go to become CEOs/Lawyers/whatever else.
Ok – now give me the flak. :)
Oct 5th, 2009 @ 11:18 am
5. Observer
These figures are somewhat higher than what I remember seeing/hearing a few years ago, but it may have changed a bit.
I don’t think they’re outlandish. A back bencher MP gets about 50% more than a well established (and tenured) academic in a good professional department (yes, significantly more than in the humanities, I’m afraid) and comparable to starting salary at a top firm for an MBA. A minister / leader gets significantly less than a business leader or top lawyer who we would consider his peer.
The big change in pension for those MPs who essentially get elected to a 2nd term seems a bit of an excessive bit of pork, but pales compared to bonuses and options in the private sector. The expenses and living allowances I don’t count – people at this level in the private sector can easily spend more on reimbursed expenses than their salary.
Oct 5th, 2009 @ 11:29 am
6. Scott
@ DivMan: “Ok – now give me the flak. :)”
Okay. :)
“We should pay them more – much more, in the millions I would say. At least this way we would attract top talent into the game instead of having this talent go to become CEOs/Lawyers/whatever else.”
That argument has been used forever. It was used here (BC) last time all the big-wigs got their 25% raise. It’s rubbish. Why do you think politics and bureaucracy operate the way they do? It’s because the “top talent”/”best and brightest” are NOT attracted to “the game” of politics and are, obviously, NOT running things. People who are greedy for power and attention go into politics and STAY in politics (remember what a politicians TRUE job description is: to seek, gain, and maintain power. Period.).
Top talent, those who want to create and innovate, will, if they do happen into government, very soon depart. Why? Because the very nature of government does not allow “top talent” to flourish. Ergo, they either repudiate and leave back into the private sector or they succumb and conform. Either way, government does not attract, nor keep, “top talent” — no matter the pay cheque.
Cheerio.
Oct 5th, 2009 @ 11:36 am
7. Observer
Another point – being a politician raises your public profile in a way that may facilitate certain followon employment but makes other quite challenging. A firm I know passed on an excellent young ex-politician employment candidate just because of the baggage he would have brought to the position. Combined with the relative insecurity of the position (who knows if you’ll be reelected) some form of long-term pension as a future cushion does not seem out of line. If you want capable people to take this on, many of them (not all – I’m not trying to claim there aren’t oodles of tremendously capable people out there being paid far less than 6 figures!) will be giving up on a fairly lucrative existing career trajectory for something very different and risky.
Oct 5th, 2009 @ 11:37 am
8. Harv
Scott, you seem like another bitter public servant. I fully agree with paying our politicians well. They work hard for their money and it is almost always a thankless job. Downplaying our Prime Minister’s role in comparison to that of the US Presidency is insulting and quite frankly unpatriotic. His job is equally important regardless of the population of Canada. Maybe we should pay him based upon sq/km or litres of fresh water/per capita? In that case he would earn much more than Obama. It has been said a million times before – if you (Scott) think you can do a better job then we will look forward to your upcoming campaign. You might even get my vote (as long as you are a Liberal…lol).
Oct 5th, 2009 @ 11:45 am
9. DavidV
I don’t know anyone who has turned down being a politician because of money. I do know people who have turned down become a judge because they couldn’t afford the pay cut. I would assume that this happens a lot in politics.
David Miller, the Toronto mayor, appears to make $163,016.64 and he is in charge of an 8.7 billion dollar budget. I don’t think that the salary is out of line with the responsibility.
Oct 5th, 2009 @ 11:59 am
10. Steve
I think we can all agree that the MPs have a very good salary and a lot of perks. However, I’m not seeing anyone take into account the personal cost of getting there in the first place.
Politicians spend a LOT of personal money just to run, it’s not 100% funded by the party. Once reason that most MPs/MPPs are lawyers is because the cost to run is so immense that you need to be upper-class income in the first place just to afford to run.
Since these salaries seem high, but are WAY less than these individuals make in the private sector, we are already missing “top talent”. If we reduced the salaries even further, we’d probably get even more losers.
Keep in mind politics is a thankless job for the most part, at any time a good chunk of the country hates you.
Oct 5th, 2009 @ 12:08 pm
11. Will @ Cheap Date Ideas!
wow, that’s a lucrative career with the government – especially if you’re just a smalltime backbencher. “Iron Ricebowl” working for the government indeed…
Oct 5th, 2009 @ 12:16 pm
12. Deb
As per the Moneysense article, the champion of poor NDP Supremo Mr. Layton is drawing Pensions from Ryerson University, as former staff and Toronto City council, as former City Councilar, apart from his $200,000 plus Paycheque as NDP leader in Parliament. Chip in his wife’s Pay of another $150,000 as MP. More than a very decent income for a family, by any standard. Still they are renting their house to University students, as per the article. I don’t have any words for these cheapstakes.
Oct 5th, 2009 @ 12:24 pm
13. Chris
Don’t forget MPs have to maintain a residence in BOTH their riding AND Ottawa. The extra cash for backbenchers adjusts for this expense. I always love hearing people who don’t make a lot of money complain about people who do.
Oct 5th, 2009 @ 1:04 pm
14. FrugalTrader
Chris, I believe the moneysense article stated that MPs can expense their housing expenses in Ottawa, up to a certain amount of course.
Oct 5th, 2009 @ 1:15 pm
15. Tax Guy
@ Scott:
Hate for politicians aside, let me ask another question: Do you want an unqualified dufus running for political office? The old adage “you get what you pay for” applies here.
If politicians get crummy compensation we get crummy politicians because those who are qualified won’t touch it. The salaries of the CEO of Royal Bank and BCE are both over $1 million, do you think the leader of a country should be paid on pay?
I suspect that if we paid the PM $1 million and the other MP’s in the neighbourhood of $500,000 we would probably get much better government and a much leaner county.
Oct 5th, 2009 @ 1:36 pm
16. Neil
“I suspect that if we paid the PM $1 million and the other MP’s in the neighbourhood of $500,000 we would probably get much better government and a much leaner county.”
To play devil’s advocate, would that make politicians that much more likely to do anything to hang onto their jobs?
To me it looks like they are paid about right. Perhaps PM and senior cabinet should be paid more, given the decisions they are in charge of.
Oct 5th, 2009 @ 1:44 pm
17. David
I have no problem with these salaries. We want well-qualified individuals who would serve the public good to stand for public office. Being an MP requires long hours, often thankless service, has little security, and, for most MPs, long days away from family and loved ones. The remuneration ought to at least be attractive enough for qualified individuals of all political stripes to make the sacrifices necessary to make a run for Parliament.
Oct 5th, 2009 @ 1:54 pm
18. Deb
If better Governance is related to the remuniration, the government shouldn’t have cleared all the deficits back in ninties, when MPs were getting paid around $70k. The pay should be performance driven. One shouldn’t be coming to Public Service only to earn Money. The Pension benefits for MPs are well compansated and should take away their financial worries for the future, but still they keep on increasing their salaries. Please read John Bogle’s latest book “Enough” and someone make these people understand how to be happy with Enough without much greed.
Oct 5th, 2009 @ 2:20 pm
19. Finance_Addict
Obviously FrugalTrader has issue with MP’s salaries and their generous accelerated pension package as he wrote the article stating such. Funny considering your own wife is a government worker with one of those same gold plated pensions. My wife has one also. The key difference is the time it takes to get full pension. I get it. However it’s all relative and I’m not sure what message this post achieves other than to complain about what government workers get paid. Maybe a post showing the widening gap between what government versus private sector workers get paid\ benefits would be an eye opener for sure.
Oct 5th, 2009 @ 2:26 pm
20. FrugalTrader
Finance Addict, the post was meant to generate discussion on what readers thought of the high pay of federal politicians. I personally have no real issue with the high pay, it’s simply much higher than I expected.
Oct 5th, 2009 @ 2:53 pm
21. James
There is another consideration that hasn’t been mentioned. If Politician salaries are too low they are FAR more likely to accept kickbacks and bribes to make up for the low salary. I realize kickbacks and bribes are already happening but a lower salary would probably make the problem even worse.
As fof the pension, I believe the government kicks in approximately $2.5 – $3 for every $1 the member contributes to the plan. My plan contributes $1 for $1 at work. so it is a lucrative benefit for them, but I don’t think it is out of line with executive pension plans across the country(lets not forget they are the executives of the government of Canada).
Oct 5th, 2009 @ 3:24 pm
22. Peter W
My MP is also a secretary of State + a retired F16 pilot with 30 years service + anD he’s an ex- financial services representative.
+He gets to fly to Afghanistan whenever .
Spent the last few Christmases there.
Oct 5th, 2009 @ 3:46 pm
23. mojo30
” If Politician salaries are too low they are FAR more likely to accept kickbacks and bribes to make up for the low salary.”
LOL, why do you think corporations run countries not governments..for this exact same reason, these guys get payed off in so many ways, regardless of salary. It makes no difference. The kickbacks are the reason most politicians are in the biz, when big corporations throw money at you , you do what they tell you..hence why consumers are constantly gouged and nothing ever gets done about it.
Oct 5th, 2009 @ 4:25 pm
24. Philip in North York
Scott,
Thank you for giving us colourful descriptions about politicians. I do not like politicians, but I do not hate them as you. I view political power as a sewage treatment plant; it is a necessary evil, but those who work in there are stinky. That is why I distant myself from them, and low six-figure salary and $100,000+ /yr perks are acceptable to me. The politics is not a job for gentle people.
Back to the salary number, I have little knowledge about politics, but being a MP seems a financially poor decision. Advertising, operating office, and some research activities wouldn’t be cheap. The cost will be covered by reimbursement, and donation but it would not be completely free. I never heard any politician became rich without kickbacks, bribe, and pension.
For comparing Canada and U.S., how can we judge whether Canadian politicians overpaid or not? Maybe, U.S. politicians are grossly underpaid financially for their posts.
Philip
Oct 5th, 2009 @ 5:43 pm
25. Thicken My Wallet
I read the article and I can’t recall whether they mentioned the size of budgets and departments that a jr. cabinet minister would over-see.
If they didn’t tell you, the figure really has no context. Senior level civil servants pull down a good salary but many of them supervise much larger departments and budgets than their private sector counterparts.
As for the pensions, the better way to address the issue is pay more salary and offer a very small pension and impose term limits. That way, at least politicans know this is not a life-long job and they are acting as trustee for the public for short periods of time. The issue with large pensions is that it institutionalizes being a politician as a life-long job and your mandate no one is to serve the public but to get re-elected again. All institutions require fresh blood and new insight.
Oct 5th, 2009 @ 6:44 pm
26. Ms Save Money
Hope this doesn’t offend anyone – but I think the survey forgot to include the bribe money.
Oct 5th, 2009 @ 9:17 pm
27. Good
politicians only stand in our way. ?????
Oct 5th, 2009 @ 9:25 pm
28. Briefcases
These salaries do seem rather excessive. These jobs are not so demanding that they deserve that. On the flipside, if they don’t make this much, qualified people may go work in business management or other careers instead. So there has to be some incentive for the most qualified people to become politicians. It becomes a bit of a bidding war between government and businesses.
Oct 6th, 2009 @ 7:22 pm
29. Canada Deals
Whoa that’s a lot of clams. I guess I don’t mind… as long as they’re EARNING it. How many of these politicians are actually giving us value for our money?
Oct 7th, 2009 @ 2:53 pm
30. Lior
No surprise here but it’s like that in virtually every democracy. Bear in mind that some individuals who successfully run for office would have to take a pay cut compared to what they’ll get paid in a private sector job. However, the vast majority of politicians are “jobnicks”; few are doctors or lawyers or bankers who would earn a very lucrative salary in the private sector. Most of them are career bullshiters who only want to get elected for the pay and perks. Our political system as a whole is flawed and plagued with conflicts of interest.
Lior
Oct 8th, 2009 @ 1:20 pm
31. cannon_fodder
I don’t think the salaries are outlandish at all, but I don’t like the size of the pensions and how little time in office it takes to ‘earn’ such a lucrative pension.
I believe it would have been helpful if there was an indication as to how long each MP had held public office before landing a job in parliament. I would guess it takes quite a long time for most politicians to work there way up the ladder (starting perhaps with school boards, municipal politician, maybe even provincial politician).
Backbenchers earn too much, but other than that, it seems quite reasonable considering the responsibilities involved.
I personally don’t know any politicians so I could venture a guess as to how many deliver real value but it appears that, just as in the private sector, there are people who deliver more value than they are paid – and there are others on the opposite side of the spectrum.
Oct 18th, 2009 @ 11:52 pm
32. Scott
Apologies for the lag time, I’ve been working…and still working so it’ll be quick (and left unfinished)…
15. Tax Guy @ Scott:
“Hate for politicians aside, let me ask another question: Do you want an unqualified dufus running for political office? The old adage “you get what you pay for” applies here.”
Really?
Hmmm…let’s see…my MLA has a BA = Bachelor of ARTS degree.
I repeat — ARTS.
How does that qualify him for anything, let alone a $98,000/yr job?
The 2006 Stats Can report, states the average earning for a B.C. resident with a B.A. degree is $46,000/yr; degrees above a B.A. earn $60,000/yr.
Huh?!? How does Mr. Politician manage to earn 213% MORE than an equally educated person? Oh right, he’s overpaid by the government…I mean, YOUR tax dollars!
Let’s see YOU try and finagle an almost-$100,000/yr private sector salary (plus perks) with a mere bachelor of ARTS degree. Good luck.
Is he the best person for the job? Probably not.
Is he the best POLITICIAN for the job? The most popular, for sure.
Yes, he is an “unqualified duffus” that ran for office and won — twice. But then again, so did Bush Jr., the guy who couldn’t make money with an oil well!
The weak theory of “you get what you pay for” is so grossly over-used by the government to justify their pay.
Incomplete argument, but I shall return!
Oct 27th, 2009 @ 10:44 am
33. Ben
Scott, your theory that one’s abilities should be measured by the wording on a diploma is very outdated. One’s education level is little more than a door opener when interviewing for a new position and has nothing to do with one’s true abilities. Many of the people that I went to graduate school with can barely feed themselves. And most of Canada’s richest entrepreneurs do not even have a high school diploma. It is 2009…not 1972.
Oct 27th, 2009 @ 10:52 am
34. Scott
@ Ben:
1) How many non-degreed entrepreneurs work for the government?
My guess is an absolute zero. I’m not talking about private citizens on contract, but a Mon-Fri 35-hour work week stooge. Government simply does not provide a livable environment for the entrepreneurial spirit.
2) During the last round of B.C. provinicial gov’t top-tier raises, good ol’ preimier Gordo hired an “indiependent” firm to write a public report to support the raises. First off, the idea is just so wrong. Secondly, the report stated that “comparable” wages were seen in the private sector. Again, the example of my MLA, earning 213% more than someone in the private sector with “comparable” pedigree. Basically the joke of a report was just more waste of tax dollars.
3) As Tax Guy posted (#15): “If politicians get crummy compensation we get crummy politicians because those who are qualified won’t touch it. The salaries of the CEO of Royal Bank and BCE are both over $1 million, do you think the leader of a country should be paid on pay?”
Think the CEO of RBC or BCE have ONLY a Bachelor of Art degree? I doubt it. Try to get into RBC or BCE management with “not even a high school diploma”. Good luck. As well, those are private sector companies, their entire goal is to make as much money as possible. The perceived role of a politician is quite different. I’m not sure how you correlate the two.
In the end, it really is a futile and moot argument. Government has been a corrupt, self-serving entity ever since its birth. We might as well face the fact that an incredibly small (and most likely shrinking) degree of society enters into politics with the sole purpose of serving without ulterior motives (money, power, etc.).
Oct 27th, 2009 @ 9:42 pm
35. Ben
Scott I think that you are missing the point and examining this on a micro level. The bigger picture tells us that politics is a thankless job and therefore a premium must be paid to all politicians.
Your first point is completely off topic. We are not discussing public servants but rather elected officials. Many of Canada’s elected officials are self made millionaires who enter politics for reasons other than money. Perhaps power is one reason but in today’s political climate there is very little power to be had. Again, I’ll remind you that this is 2009 and all politicians are subject to new world media scrutiny (www, blogs, 24/7 TV, etc). So yes there is still power that comes with the job…but the abuse of power that was once a huge perk has gone the way of the VCR.
Your second point sounds like sour grapes. Would you prefer that an internal firm did the study? $98K is a very good salary but it is not going to make you rich. In fact at $98K the very government that pays you this salary gets most of it back through various forms of taxation
And your last point…comparing someone with a B.A. in the private sector to a politician with a B.A. is like comparing a college professor with a PhD in English literature to a MD with PhD in neuroscience. Obviously they would not be paid the same simply because they hold the same ‘level’ of education.
The good news is that we rehire our politicians every 4 years so if you think that you could do better without being attached by the generous salary or the lure of power then I look very much forward to your campaign. Until then, I will continue to support our politicians and will save bashing them for times when they actually deserve it. Earning a decent wage is not one of those things.
Oct 28th, 2009 @ 8:00 pm
36. Scott
Ben, obviously this is an issue that will always be contested, and without resolution. I respect Frugal Trader and his website too much to turn this into a slap fight, of sorts. We shall continue to agree to disagree.
(Feel free to e-mail me if you wish to debate further!)
Oct 28th, 2009 @ 9:45 pm
37. Scott
Here’s a little update from a recent article (Source: Parliament of Canada):
Prime Minister
2010 Total take-home pay: $315,462
2000 Total take-home pay: $142,300
ANNUAL INCREASE: 8.3%
Senior Cabinet Minister
2010 Total take-home pay: $233,247
2000 Total take-home pay: $117,500
ANNUAL INCREASE: 7.1%
Junior Minister
2010 Total take-home pay: $214,368
2000 Total take-home pay: $$105,175
ANNUAL INCREASE: 7.4%
Speaker of the Senate
2010 Total take-home pay: $187,500
2000 Total take-home pay: $38,100
ANNUAL INCREASE: 17.3%
Leader of the Government in the Senate
2010 Total take-home pay: $207,800
2000 Total take-home pay: $68,200
ANNUAL INCREASE: 11.8%
Backbench MPs
2010 Total take-home pay: $157,731
2000 Total take-home pay: $68,200
ANNUAL INCREASE: 8.75%
Senators
2010 Total take-home pay: $132,300
2000 Total take-home pay: $68,200
ANNUAL INCREASE: 6.85%
Average Annual Pay Increase: +9.6%
Have the duties of ANY of the positions above changed so drastically that they require a MINIMUM 7% annual pay raise — PER YEAR?
How well does your ‘REAL WAGE’ pay cheque compare?
From Stats Can:
(*just for the sake of a quick-n-dirty argument; **latest stats)
2000 Married couple, one earner*: $47, 500
2007 Married couple, one earner**: $60, 300
ANNUAL INCREASE: 3.5%
2000 Unattached male earner*: $36,100
2007 Unattached male earner**: $43,600
ANNUAL INCREASE: 2.75%
Perhaps we should start using politician pay raises as the true measure of inflation. Just an idea.
(As an aside, CPI ‘00-’10 is +2.07% annually. But much more, of course, if you actually include all the stuff you use: fruit, vegetables, gasoline, fuel oil, natural gas, mortgage interest, inter-city transportation, and taxes.)
Mar 6th, 2010 @ 12:42 pm
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