Family versus finances: the calculus for MPs when deciding whether to run

OTTAWA – Nearly 60 members of the just-ended 41st Parliament have decided against running again this fall.

Some moved on to provincial politics, like Conservatives Patrick Brown and Brian Jean, now leading conservative parties in Ontario and Alberta.

Others, like the NDP’s Alexandrine Latendresse, who was among the young MPs from Quebec who were swept onto Parliament Hill in 2011, say the cut-and-thrust of the House of Commons has lost its appeal.

Still others say they want to spend more time with family, like Justice Minister Peter MacKay and Industry Minister James Moore, who just announced on Friday he won’t run again.

Whatever their stated reasons, many political observers wonder whether money is also among them.

Departing MPs are eligible for severance and pension payments that can top six figures; recent changes to how pensions will be paid have fuelled speculation that many are getting out while the getting is good.

“I try not to be cynical; people give me a good reason and looking at MacKay and Moore in particular, that they’ve got young kids seems to me like a reasonable reason,” said Aaron Wudrick, the federal director of the Canadian Taxpayers Federation.

“But objectively speaking, there’s no question that anybody who leaves now … they will be objectively better off. “

Severance

MPs who serve out their terms and don’t run again are entitled to severance worth 50 per cent of their salary.

That’s a minimum payout of $83,700 for those earning the base MP salary of $167,400. Cabinet ministers like Moore and MacKay make $244,500 a year, which means severance of $122,250.

The same goes for those who run again and lose.

Severance payouts after the 2011 election totalled $4.3 million, the Canadian Taxpayers Federation calculated.

“You could argue you’ve run for office, you intend to continue working but you’re defeated, so then maybe severance is reasonable because you’re looking for work when you were not planning to,” Wudrick said.

“But we do kind of raise our eyebrow at the idea that a member of Parliament can get severance with a pre-planned departure.”

MPs like former foreign affairs minister John Baird, who quit mid-session and vacated his seat almost immediately, don’t receive severance, but still have access to a pension at age 55.

Pension

To be eligible for a pension, an MP must have served six years.

In 2013-2014, the average annual allowance for former MPs was $59,974, according to a Treasury Board report.

Current MPs who are eligible for a pension right now and who aren’t running again — or who run again and lose — can collect a pension beginning at age 55.

But changes made to the plan three years ago come into effect at the end of this year, and include increasing the age an MP can start collecting their pension to 65 from 55.

That’s only for those elected for the first time this fall. It gets more complicated for those who win re-election.

Their pension payments will be calculated on the number of years they served both before and after Dec. 31, 2015. The portion owing on service up to 2015 is available once they turn 55, the rest at 65.

They can start collecting that portion at 55 too, but will pay a one per cent penalty each year until they turn 65.

Meanwhile, the six-year-service rule remains in effect.

There are 133 current MPs who wouldn’t qualify for a pension until after the October vote at the earliest. But Wudrick said it’s unclear how much of a financial calculation any MP is making in deciding whether to run.

The number not running is about the same as before two other landmark campaigns in recent history — 1993 and 2004, he noted.

“So maybe it’s question of people reassessing their political prospects rather than how much money can I get.”

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