ARCHIVED - Expenditure Review of Federal Public Sector - Volume Two - Compensation Snapshop and Historical Perspective, 1990 to 2003

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12. Other Groups—Judges, Parliamentarians, Employees of Parliament, Ministerial Staff and Students

This final section summarizes compensation arrangements for the following groups:

• Federally appointed judges—judges of the Supreme Court of Canada, the Federal Court, the Federal Court of Appeal, the Tax Court, and the superior trial and appellate courts of the provinces and territories
• Members of the House of Commons and the Senate
• Employees of the House of Commons, the Senate and the Library of Parliament
• Minister's staff who are exempt from the application of the Public Service Employment Act
• Students who are not employed as part of the regular public service but rather under special programs designed to give students work experience during breaks in their university and college studies

Each of these groups constitutes a world apart. While we have been able to determine reasonably accurate totals for the big items of salaries and pension contributions for these groups, many of the remaining elements are incomplete. The full total compensation amount for these groups was almost certainly at least $725 million in 2002–03.

As will be described shortly, the pay of puisne judges of provincial superior courts, as well as the Federal and Tax courts is set on the recommendation of an independent Quadrennial Commission. Generally, these Commissions support alignment with the DM 3 pay range. Higher judges are paid increments from this basic judicial rate.

From this followed the pay of parliamentarians in 2002–03. The Prime Minister was paid the same as the Chief Justice of the Supreme Court. Members of Parliament (MPs) earned 50% of that amount. Ministers and the Speaker earned 74% of what the Prime Minister earned. Other positions in the House of Commons hierarchy were paid various fixed proportions of the Chief Justice/Prime Minister salary. Senators, and those with special roles such as Speaker or Whip in the Senate, earned the corresponding House of Commons amount, minus $25, 000.^[135]

Finally the salaries of agents of Parliament are also tied into this scheme. The Auditor General earns the same as a puisne judge of the Supreme Court, and other agents such as the Chief Electoral Officer earn the same amount as regular judges of the Federal Court.

As described more fully in Volume One, the whole structure (setting aside the pay of Crown corporation CEOs) depended on two decisions: the EX 1 salary, as recommended by the Stephenson Committee; and the regular provincial superior/Federal Court judge's salary, set based on the work of the Quadrennial Commission, which itself tends to tie into the DM 3 salary.

The statutory linking of parliamentary remuneration to judicial salaries meant that nearly all salaries for senior federal officials were interconnected and based ultimately on an assessment at the EX 1 level of comparable compensation in the private and the broader public sectors. The main exception was the salaries of Crown Corporation Chief Executive Officers (CEOs). These, however, followed a similar approach in two ways: first, the salary structure was built on comparability to the private sector (25^th percentile in 2002–03) at the first level; second, the rate of salary increase was usually the same or very close to that recommended forexecutives.

Remuneration for federally appointed judges

In 2002–03, there were just over 1,000 federally appointed judges in Canada. Their numbers and salaries are established in the Judges Act, as amended from time to time. Most judges were paid the standard amount of $210,200 in that year. Higher amounts were paid for the Chief Justice of the Supreme Court of Canada ($270,200 or 1.285 times the regular judges' salary), for the eight regular judges of the Supreme Court ($250,200 or 1.19 times the regular judges' salary), and for the 34 Chief Justices or Associate Chief Justices of the other various courts ($230,400 or 1.096 times the regular salary).

Judges who reach the age of 65, with 15 years on the bench, or age 70, with 10 years on the bench, may elect to become a supernumerary judge. Such judges receive the regular salary of a judge, but work only part time as directed by their Chief Justice.

The annual value of salaries paid for federally appointed judges in March 2003 was about $218.2 million.

Judges received an annual allowance of up to $5,000 for reasonable incidental expenditures. Chief justices, Associate Chief Justices, and judges of the Supreme Court receive representational allowances ranging from $10,000 to $18,750. These allowances were estimated to total about $5.6 million in 2002–03. These amounts are accountable, but not taxable.

The pension plan established under the Judges Act pays federally appointed judges an immediate annuity on retirement, provided the sum of age and years of service (minimum of 15 years) is at least 80. The mandatory retirement age is 75. The annuity is equal to two thirds of the judicial salary at retirement, indexed in the same way as for the regular public service pension. In the case of permanent disability, a judge becomes entitled to an immediate annuity. Surviving spouses and eligible children may also receive annuities on the death of a judge. The spousal amount is one third of a judge's salary, or one half of the judge's annuity if he or she is retired. Benefit payments under the plan totalled $61.9 million in 2002–03. Judges' annuities are not integrated with the Canada and Quebec Pension Plans, so there is no reduction at age 65, as under the other federal pension plans.

Judges contributed 7% of their salary, of which 1% was recorded in the Supplementary Retirement Benefits (SRB) Account and the remainder as a reduction of the Government's expense. The Government records an equivalent amount as contribution under the SRB Account and records the expenditure for the judges' pension benefits at the time of payment. No funds are set aside to meet future benefits payments. Given these two mechanisms, both parts of the Plan are unfunded. Since our analysis focuses on a current expenditure approach, we have used these benefit payments as an approximation of the Government's current costs and showed them under the heading of contributions. Under this assumption, the total value of contributions for judges' pensions in 2002–03 was about $61.9 million. Since judges contribute about $10 million, the net cost for the Government was about $51.9 million (around 84%).

In accordance with the Judges Act, federally appointed judges and their dependants are eligible for life insurance under the Public Service Management Insurance Plan, as well as participation in the Public Service Health Care Plan and the Public Service Dental Care Plan on the same basis as Executives in the core public service. The related premiums and contributions are fully paid by the Government. Retired judges and their dependants are also eligible for benefits on the same basis as for retired public service executives. These are taxable benefits that are relatively high for judges, given that they are much older on average than executives in the regular public service. Judges do not participate in the Supplementary Death Benefit Plan, since they are not covered by the Superannuation Act. Judges do not receive severance pay.

Judges normally receive eight weeks of leave annually, sick leave as necessary, and the usual statutory holidays. Leaving sick leave out of consideration, judicial leave is equivalent to about 20% of the work year; thus time not worked has an approximate minimum value of $43 million.  Judges who are temporarily unable to perform their judicial duties due to ill health may receive sick leave of up to six months from their Chief Justice, or for a longer period with the approval of the Governor-in-Council.

Retrospective—Compensation for federally appointed judges

The number of federally appointed judges increased by 185 from 1990 when there were 850 judges, to January 2003 when the number was 1,035. This growth equals nearly 22%.

The vast majority of federally appointed judges are paid the same salary. Table 2102 provides the salary level for regular Superior Court Judges (this also applies to Federal and Tax Court Judges, and to the various provincial and federal appeal courts). Because the mid-point of the salary range for Deputy Ministers level 3 has historically been used as a prime comparator for federally appointed judges, Table 2102 also reports the DM 3 salary mid-point.

It is considered a fundamental constitutional principle that judges should be independent of both the Executive and Parliament, so they can rule on sensitive cases "without fear or favour." Accordingly, the setting of judicial salaries and benefits is a sensitive matter. In practical terms, judges' salaries are set by Parliament through the Judges Act, as noted above. The Minister of Justice proposes amendments to that Act. In order to depoliticize the process, thereby maintaining judicial independence, Parliament established in 1982 the first Triennial Commission charged with presenting theMinister of Justice with objective and fair recommendations. The composition of the Commission followed a classic arbitration model, with the two parties (the federal judges and the Minister of Justice) each naming a Commissioner, and these two deciding on a Chairperson. In 1999, the Commission became a Quadrennial Commission.

Table 2102 History of salary levels for regular Superior Court Judges in comparison with the mid-point of the DM 3 salary range, 1980 to 2002
Year	Superior Court Judges	DM 3 – Mid-Point
1980	$ 70,000	$ 77,300
1981 (April)	$ 74,900	$ 86,750
1981 (November)	$74,900	$ 91,750
1982	$ 80,100	$ 97,250
1983	$ 84,900	$102,105
1984	$ 89,100	$105,675
1985	$105,000	$110,950
1986	$115,000	$110,950
1987	$121,300	$126,500
1988	$127,700	$134,550
1989	$133,800	$144,650
1990	$140,400	$150,750
1991	$147,800	$150,750
1992	$155,800	$155,300
1993	$155,800	$155,300
1994	$155,800	$155,300
1995	$155,800	$155,300
1996	$155,800	$155,300
1997	$165,500	$155,300
1998	$175,800	$188,250
1999	$178,100	$188,250
2000	$198,000	$188,250
2001	$204,600	$209,650
2002	$210,200	$214,600

Since 1981, the Judges Act has provided for automatic indexation of judicial salaries each April according to the Industrial Aggregate Index.^[136] This index is a measure of change in wages in the general economy, and generally is higher than the Consumer Price Index, which tracks changes in the cost of living. This approach was aimed to avoid negotiation and politicization in maintaining the value of judicial salaries.

The question of whether larger salary or benefit increases would be warranted was to be considered by successive Triennial (now Quadrennial) Commissions. Between 1987 and 1993, Commission recommendations on judicial salaries and benefits were generally not accepted. The Public Sector Compensation Restraint Act suspended annual statutory salary indexing for five years (from 1992 to 1996), and no other judicial salary adjustments occurred. In 1997, annual indexing resumed. In 1998, pursuant to recommendations of the last Triennial Commission, increases of 4.1% (for 1997) and a further 4.1% (for 1998) were approved. Based on recommendations in the 2000 Report of the first Quadrennial Commission, judicial salaries were raised to $198,000 (including statutory indexing) for 2000, and by an additional $2,000 plus statutory indexing in each of 2001, 2002 and 2003. The proposal to provide higher salaries for Appeal Court Judges was not supported by the Commission, and the existing ratios for the higher salaries of Chief and Associate Chief Justices, and for the Supreme Court of Canada were maintained.

Taking all of this into account, federally appointed Superior Court Judges saw their salary grow from $140,400 in 1990–91 to $210,200 in 2002–03. This is an increase of about 50% in current dollars. In constant 2002–03 dollars, the increase is around 18%. Looking specifically at the post-freeze period between 1997–98 and 2002–03, as we have done with salaries in the other domains, the standard federal judicial salary rose from $155,800 (in March 1997) to $210,200. This equals growth of 35% in current dollars, or 21% in constant 2002–03 dollars.

The total value of federal judicial salaries paid was in the range^[137] of $120 million in 1990–91, and $160 million in 1997–98. The actual amount was $218.2 million in 2002–03.

The annual judges' allowance for reasonable incidental expenditures was increased as of April 2000 from $2,500 to $5,000. Representational allowances provided to Chief Justices, Associate Chief Justices and judges of the Supreme Court increased from a range of between $5,000 and $10,000 annually, to a range of from $10,000 to $18,750.

Members of the judiciary are the only group entitled to a pension by virtue of the Constitution Act, 1867. The basic entitlement since Confederation has been an annuity equal to two thirds of their salary after 15 years on the bench. In 1971, the concept of supernumerary judge was introduced, whereby at age 70 with 10 years experience a judge could elect to work part time, but with full salary. In 1973, eligibility was extended to age 65 with at least 15 years of service. In 1992, judges were included in the limits on contributions to Registered Retirement Savings Plans, effectively cutting off this area of tax-sheltered savings for judges. In 1998, voluntary retirement with an annuity of two thirds of salary was authorized for judges whose combination of age and a minimum of 15 years of service equalled 80.

Finally, pursuant to recommendations of the 2000 Quadrennial Commission, there were several further changes to the judges' pension plan:

• Judges eligible for an immediate annuity had their contribution rate reduced from 7% to 1%.
• An early retirement option with prorated benefits was introduced for judges with at least 10 years' service.
• Judges could now elect a higher survivor benefit up to 75% of the judge's pension, with a commensurate actuarial reduction in his or her own pension.

Prior to 1975, judges' pensions were non-contributory. The financing arrangements for the judges' pension plan established at that time are unique, reflecting sensitivities about judicial independence. Since no funds are set aside to meet future benefit payments, the judges' Plan is unfunded. All payments of benefits are made directly from the Consolidated Revenue Fund^[138] and charged to expenditure at the time of payment. Nonetheless, irrespective of this accounting, the Government also records pension costs and liabilities for this plan on a full accrual basis of accounting. As of March 2003, the value of this liability in the Public Accounts approximated $1 billion. Judges contribute 1% of their salary to the Supplementary Retirement Benefits Account (to cover the cost of indexation to the cost-of-living), and the Government records an equivalent amount as contribution. 

Table 2103 summarizes the amounts contributed by the judges and the Government towards the judges' pension plan since 1990. The judges' contributions have increased with the level of their salaries, and the reduction in the number of judges who had been appointed before February 1975. Since 2000, there has been some reduction in the total judges' contribution, as a result of the decision to reduce to 1% the contribution of serving judges eligible for an immediate annuity. The share of pension costs contributed by the judges was 25% in 1990–91, and 16% in 2002–03. The ratio of Government to judges' contributions increased from 3.05:1 in 1990–91 to 5.41:1 in 2002–03.

Table 2103 Government and judges' contributions to the judges' pension plan, 1990 to 2002
Year	Benefit Payment ($M)		Judges' Contribution ($M)					Net Government Contributions ($M)
			Pension	Supplementary Retirement Benefits Account	Total	% of Payment		Pension	SRBA	Total	% of Payment
1990–91	23.1	5.0		0.9	5.9	24.8	17.1		0.9	18.0		75.2
1991–92	26.0	5.6		1.0	6.6	24.6	19.3		1.0	20.4		75.4
1992–93	28.8	6.3		1.2	7.4	24.8	21.4		1.2	22.6		75.2
1993–94	30.8	6.6		1.2	7.8	24.4	23.0		1.2	24.2		75.6
1994–95	33.7	6.7		1.3	8.0	22.8	25.8		1.3	27.0		77.2
1995–96	36.6	7.0		1.3	8.3	22.0	28.3		1.3	29.7		78.0
1996–97	39.6	7.2		1.4	8.6	20.9	31.0		1.4	32.4		79.1
1997–98	42.6	7.3		1.4	8.8	19.9	33.8		1.4	35.2		80.1
1998–99	44.3	8.6		1.7	10.3	22.4	34.0		1.7	35.7		77.6
1999–00	48.3	8.7		1.7	10.3	20.7	38.0		1.7	39.7		79.3
2000–01	52.3	8.8		1.7	10.5	19.5	41.8		1.7	43.5		80.5
2001–02	57.7	7.3		1.3	8.6	14.6	49.1		1.3	50.4		85.4
2002–03	61.8	7.8		2.2	10.0	15.6	51.9		2.2	54.1		84.4

Since 1990, there have been improvements in the benefits available for judges, both serving and retired, and their dependants. In summary, the Government has largely brought judges' benefits into alignment with what is available to Executives in the public service. For example, as a result of the 2000 Quadrennial Commission, retired judges and their dependants obtained premium-free coverage under the Public Service Health Care Plan (PSHCP). Improvements were also made to life insurance coverage. A special sub-line for Judges was created within the Public Service Management Insurance Plan (PSMIP) in 2001 so there would be no cross-subsidization.^[139] Premiums for all lines of coverage have totalled around $5 million per year since then. So far the plan enjoys a surplus. Following a recommendation from the Quadrennial Commission, retired judges and their dependants were covered in the new Pensioners' Dental Services Plan. Leave arrangements for judges have remained throughout the period as described in for 2002–03.

Parliamentarians' compensation

Parliamentarians include the 300+ Members of Parliament (MPs) elected to serve in the House of Commons, and the up to 105 Senators (there were 98 Senators in March 2003) appointed to serve in the Senate. In 2002–03, the basic MP salary was $135,000. As noted earlier, this was equivalent to 50% of the salary of the Chief Justice of the Supreme Court. The basic salary of a Senator was $110,000, which was equal to $25,000 less than an MP's salary. MPs or Senators who serve as a Cabinet Minister or hold particular positions in Parliament such as Speaker, Committee Chair, Parliamentary Secretary, Whip, or in various other roles, received additional salaries or allowances. A Minister, for example, received total pay of $199,800 in 2002–03. The total of salaries paid in 2002–03 to Members of the House of Commons and Senators was about $52.5 million.

The pension planfor Members of Parliament (both MPs and senators) is fairly complex, since its terms were changed effective in 1981, 1992, 1995 and 2001. In general, Members accrue benefits for each year that they serve. For those years during which Members have extra salaries relating to being a Minister, House Leader or another parliamentary leadership role, they may accumulate benefits relating to that income as well as their basic MP or Senator salary. Benefits accumulate in two accounts: the Members of Parliament Retiring Allowances Account(covering income up to the Income Tax Act limit for registered pension plans, which was $99,000 in 2002), and theMembers of Parliament Retirement Compensation Arrangements (RCA) Account(covering income above that limit).

The rate of benefit accrual per year has evolved through the various changes to the plan. Since January 2001, the rate for MPs has been 3% per year of pensionable service. For service between July 1995 and December 2000, it was 4% per year; for service prior to that date, it was 5%. A maximum pension would provide 75% of the average salary of a Member's best five years. For Senators, the accrual rate has always been 3%.

Members are eligible for a retirement allowance if they contribute to the plan for at least six years. For service up to July 1995, they may receive an immediate annual allowance. For later service, they must wait until age 55. There is annual indexing beginning when a Member reaches age 60, corresponding to the increase in the Consumer Price Index. Once indexing begins, however, payments reflect the cumulative CPI increase since the Member left Parliament. Under the Public Service Management Insurance Plan, long‑term disability benefits are also payable in cases of disability, and life insurance is payable in the case of death.

Benefits are suspended if a Member returns to Parliament. If he or she receives remuneration from the federal government above $5,000 in a year, the allowance is reduced dollar for dollar by the amount of that remuneration. If a Member serves less than six years, he or she is entitled to a withdrawal allowance consisting of a return of their contributions plus interest compounded annually at 4%.

Member contributions for current service in 2002–03 (equal to 7% of their pensionable salaries) amounted to about $3.9 million. Government contributions totalled about $20.3 million, the amount required (after taking account of members' contributions) to cover the future benefits Members earned during the year. The Government's share of costs was about 84% of the total. Benefits paid during the year amounted to about $18.1 million. The regular Member of Parliament pension account is in an excess position when compared to the actuarial liability; the RCA account is in a deficit position that is currently being made up by payments of $9.8 million per year.

Members of the House of Commons and the Senate, their spouses and eligible dependants participate in the Public Service Management Insurance Plan (PSMIP), the Public Service Health Care Plan (PSHCP), and the Public Service Dental Care Plan (PSDCP) on the same basis as Executives in the regular public service. Premiums and contributions are fully paid by the House of Commons or the Senate Administration. The premiums are a taxable benefit. The Supplementary Death Benefit Plan does not cover members of Parliament. Retired MPs and Senators and their spouses and eligible dependants continue to participate in the PSMIP, PSHCP, and the Pensioners Dental Services Plan (PDSP).

Under the Parliament of Canada Act, Members of Parliament are eligible for a severance allowance when he or she is not re-elected, or becomes unable to continue as a member because of a permanent illness or infirmity. The allowance is a lump sum generally equal to half of the total annual salaries the MP or Senator was receiving prior to the election, or becoming incapacitated. The Act also provides for disabled Members at least 65 years old to receive a disability allowance equal to 70% of their salary at the time of becoming disabled.

Retrospective—Parliamentarians' salaries

During the period from 1990 to 2003, the number of House of Commons seats increased from 295 to 301. The number of Senate seats increased from 104 to 105 when the territory of Nunavut was created (except during the period 1990–91 when extraordinarily the number was raised to 112).

At the beginning of the period under review (1991), Members of Parliament (MPs) and Senators earned an annual sessional indemnity of $64,400. MPs received a non-taxable expense allowance of $21,300 (with the rate varying by the Members' electoral district), and Senators received $10,100 for this purpose. MPs also benefited from an additional expense allowance of $6,000.

The Prime Minister earned an additional salary of $73,600; Ministers, the Leader of the Opposition and the Speaker received an additional $49,100. Additional salaries ranging from $10,100 to $29,500 were paid for other positions such as House Leader, Other Parties, and Leader, Other Parties. The Speaker of the Senate earned an additional $31,000, with various lesser amounts for other recognized parliamentary leadership roles.

This basic structure remained in place through the 1990s. For 1991, parliamentary salaries and allowances had been increased by 3.78%.^[140] For 1992, MPs' and Senators' compensation was frozen. The supplementary salaries for the Prime Minister and Ministers were reduced by 5% to $69,920 and $46,645 respectively. All forms of compensation were then frozen from 1993 through 1997.

For the next three years, 1998 through 2000, salaries and allowances were increased by 2% per year, and in 2001 by about 1.3%. By 2001, the sessional indemnity for MPs and Senators was $69,100; the MPs' non-taxable expense allowance was $22,800, and for Senators $10,800. According to the Commission to Review Allowances of Parliamentarians in 2001 the equivalent taxable basic salary was $109,500 for MPs and $88,200 for Senators. Salaries for additional House of Commons responsibilities were $75,100 for the Prime Minister, and Ministers received $50,000. Additional salaries for the Speaker and the Leader of the Opposition had been increased more than for Ministers, to $52,700.

Following the Commission's recommendations, parliamentary pay was restructured and increased. Most notably, the tax-free expense allowance was abolished and a unified fully taxable salary rate was established. The rate for MPs was increased by 20% from the equivalent amount cited above for 2001, yielding an MP salary of $131,400. For Senators, the new salary was $106,400. The amounts for extra parliamentary duties were increased in a similar fashion. The extra salary for the Prime Minister was set (at $131,450) so that his total salary would equal that of the Chief Justice of the Supreme Court. The additional salary for Ministers was set at $63,100, and that for the Leader of the Opposition and the Speaker was brought back into alignment with that of Ministers.

Finally, the Commission recommended, and Parliament so enacted, that in future salary increases for parliamentarians would remain tied to those of the federal judiciary. The Prime Minister's salary would equal that of the Chief Justice of the Supreme Court, and other parliamentary salaries and allowances would increase by the same percentage as the Prime Minister's. On this basis, the 2002 MP salary was $135,000 and the Senator salary was $110,000.

Using the same factor (1.77) to convert the previous non-taxable allowance to taxable income as was used in the 2001 Commission report, we can say that MPs' salary increased from about $102,100 in 1991–92 to $135,000 in 2002–03. This increase of $32,900 is 32.2% in current dollars, and about 8.7% in 2002–03 constant dollars. If we focus only on the period from 1997–98 to 2002–03, the current dollar increase is the same, but the equivalent increase in constant 2002–03 dollars was about 19.6%. The increase in Senator salaries was about $27,000, roughly the same increase in percentage terms as for MPs.

The total paid in parliamentary salaries (i.e. for MPs and Senators) in 1991–92 was about $26.5 million; the tax-free allowance amounted to about $7.4 million. Converting the latter to its taxable equivalent, total parliamentary salaries were about $39.6 million in that year. For 1998–99, the totals for the same items were $27.3 million, $7.7 million, and $40.9 million respectively. For 2002–03, with the new salary approach fully implemented, the total of salaries paid to Members of the House of Commons and Senators was around $52.5 million.

Retrospective—Parliamentary pensions

The Members of Parliament Pension Plan (covering both MPs and Senators) underwent substantive changes in 1992, 1995 and 2001. The main features of these revisions may be summarized as follows.

For context, we note that the rate at which Members of Parliament accrued pension entitlements was set at 5% per year for MPs and 3% for Senators in August 1981. In both cases, the maximum accrual was 75% of the average of the best six years. Thus MPs required 15 years and Senators 25 years to achieve a maximum pension entitlement. The Plan covers the basic MP or Senator salary, plus any further salary relating to additional parliamentary duties. The contribution rate for MPs was 11%, for Senators 7%, and 7% on the Prime Minister's salary.

In 1992, the Members of Parliament Retiring Allowances Act (MPRAA) was amended, much in the way other public service pension legislation was revised, to accomplish the following:

• The MPRAA was brought into alignment with the Income Tax Act. To accomplish this, the plan was divided into two parts. The first part, respecting the limits for registered pension plans, limited annual accrual of entitlement to 2%. The second part, a Retirement Compensation Arrangement Account, provided for benefits above that accrual rate, or relating to salary amounts above the limit set in the Income Tax Act.
• At the same time, the Supplementary Retirement Benefits Account (which provided for the cost of indexing benefits to the cost of living) was merged with the main account under the MPRAA.

Further amendments to the MPRAA came into force in July 1995, providing the following:

• The annual entitlement accrual rate for MPs was reduced from 5% to 4% on service after that date.
• The MP contribution rate was reduced from 11% to 9%.
• A requirement was introduced that members be at least 55 before they can collect pensions relating to service after July 1995.
• A double-dipping provision required that a member's pension be reduced by any amount beyond $5,000 earned from a federal government source.
• Existing MPs were permitted to decide whether to participate in the MPRAA pension plan.

Finally, amendments to the Act in 2000 and 2001 made these changes:

• Effective September 2000, all MPs must participate in the MPRAA.
• Effective January 2001, the benefit accrual rate for MPs was reduced to 3% for future service, and the contribution rate to 7%.
• Benefits would henceforth be calculated based on the best five, instead of the best six consecutive years of paid earnings as a member.
• Disability allowances were made payable to members over 65.
• MPs or Senators serving prior to June 2001 could opt to remain under the previous provisions of the MPRAA.

As set out in Table 2104, compared with the other federal public sector plans, the MPRAA Plan has had a volatile history since 1990, as a consequence of changes to the accrual and contribution rates, and changes in the salary level. As with the other plans, MPs and Senators contribute a specific proportion of their income, with the Government assuming responsibility for whatever additional amount is needed to cover the actuarially projected cost of the pension entitlements earned during the year. For members, the reduction in the contribution rate from 11% to 9% in 1995 explains the mid-1990s reduction in member contributions. The increase after 2001 results from the salary increase implemented in that year.

For the government, the reduction in the benefit accrual rate from 5% annually to 4% in 1995, combined with the multi-year freeze in salaries and allowances led to reduced costs in the mid-1990s. Again, the salary increases after 2001 largely explain the increase in the Government's share, along with less favourable economic assumptions.

Table 2104 Government and Member current service contributions to the Members of Parliament Retiring Allowances Act Pension Plan, 1990–91 to 2002–03
Year	Government Share ($M)				Member Share ($M)				Total Contribution ($M)
	MPRAA	RCA	Total	%	MPRAA	RCA	Total	%
1990–91	2.2	N/A	2.2	50%	2.2	N/a	2.2	50%	4.4
1991–92	2.2	2.8	5.0	68%	1.9	0.4	2.3	32%	7.3
1992–93	2.1	11.0	13.1	84%	0.9	1.5	2.4	16%	15.5
1993–94	2.1	10.4	12.5	83%	0.9	1.6	2.5	17%	15.0
1994–95	1.9	9.1	11.0	81%	1.0	1.6	2.6	19%	13.6
1995–96	1.7	6.0	7.7	79%	0.9	1.2	2.1	21%	9.8
1996–97	1.6	4.9	6.5	77%	0.8	1.1	1.9	23%	8.4
1997–98	1.7	5.4	7.1	62%	0.8	1.1	1.9	38%	9.0
1998–99	2.3	6.9	9.2	80%	1.0	1.3	2.3	20%	11.5
1999–00	2.7	7.4	10.1	82%	1.0	1.2	2.2	18%	12.3
2000–01	2.9	7.8	10.7	79%	1.0	1.8	2.8	21%	13.5
2001–02	3.8	15.3	19.1	84%	1.3	2.4	3.7	16%	22.8
2002–03	4.4	15.9	20.3	84%	1.3	2.6	3.9	16%	24.2

The ratio of government to member total pension contributions relating to the MPRAA Plan rose from:

• 1.0:1 in 1990–91 to
• 5.45:1 in 1992–93,
• 3.42:1 in 1996–97,
• 3.82:1 in 2000–01, and
• 5.21:1 in 2002–03.

For context, pension benefits paid to former members and their survivors in relation to the MPRA Account and the RCA Account combined amounted to about $6.4 million in 1990–91, $22.1 million in 1994–95 and in 1998–99, and $30.3 million in 2002–03.

Members of the House of Commons and the Senate, as well as their spouses and eligible dependants participate in the Public Service Management Insurance Plan (PSMIP), the Public Service Health Care Plan (PSHCP), and the Public Service Dental Care Plan (PSDCP) on the same basis as Executives in the regular public service. Premiums and contributions are fully paid by the House of Commons or the Senate Administration, except for optional levels two and three hospital insurance for which members may opt to contribute (though the Senate Administration pays the full amount for level three hospital insurance). Retired MPs and Senators, their spouses and eligible dependants continue to participate in the PSHCP, and can apply for coverage under the Pensioners' Dental Services Plan (PDSP).

Severance benefits for Members of Parliament who are not re-elected, or who become unable to continue as members because of permanent illness or infirmity have not changed since 1995.

Compensation for employees of Parliament

Employees in several categories serve the following employers:

• Individual Members of the House of Commons;
• The House of Commons itself under the Board of Internal Economy;
• Individual Senators;
• The Senate itself; and
• The Library of Parliament.

In 2002–03, there were about 1,400 political and administrative employees working directly for MPs. Maximum pay is governed by the by-laws established by the Board of Internal Economy. In 2002–03, this maximum was $68,400. As set out in the Parliament of Canada Act, the Speaker of the House of Commons chairs the Board, which includes two Ministers and representatives of all parties with elected MPs. MPs' employees are not unionized, and serve only as long as the Member wishes. Employees are not entitled to overtime, but may receive compensatory leave instead.

Serving the House of Commons as a whole in 2002–03 were about 1,500 regular employees, varying widely in their occupations, for example from legal advisors, to financial analysts, to procedural clerks, to security staff, to messengers and clerks. The Clerk of the House is the administrative head (analogous to the deputy minister of a department) for the staff of the House. As a distinct employer, the House of Commons establishes its own classification standards, and negotiates its own collective agreements with its unionized workers. Broadly, however, salaries and working conditions are similar to those in the regular public service. Two distinctions of note relate to the hours of work. The workday for the House of Commons is 7 hours, compared with 7.5 in the public service. Also, annual leave entitlements provide particular levels of leave after fewer years of service.

Staff working directly for Senators numbered about 150 in 2002–03. They are employed on terms similar to those applying to MPs' employees.

About 400 employees were serving the Senate as an institution, under the management of the Senate Standing Committee on Internal Economy, Budgets and Administration, which is similar to its analogue in the House of Commons but rooted in custom rather than statute. Terms and conditions of work are similar to those for employees of the House of Commons.

The Library of Parliament is also a distinct employer, reporting jointly to the Speakers of the two Houses of Parliament. The Library's about 375 employees in 2002–03 worked under terms and conditions of employment that largely match those of the House of Commons and the Senate.

The total cost of salaries and wages in 2002–03 for these five categories of employees serving Parliament and its Members was about $169 million. The largest part was about $130 million, covering MPs' employees and employees of the House of Commons. Overtime and allowances amounted to about $6.9 million.^[141]

All of these employees participate in the pension and benefit programs generally available to regular employees of the public service. These include most notably, the Public Service Superannuation Plan, the Supplementary Death Benefit Plan, the Public Service Management Insurance Plan (for executives and other non-unionized employees), the Public Service Health Care Plan, the Disability Insurance Plan, and the Public Service Dental Care Plan.

Employer cost for these employee benefit plans amounted to about $36 million in 2002–03, including just over $27 million for MPs' employees and employees of the House of Commons.

Severance pay over the course of the year totalled about $2 million. Lump sums for performance pay added up to about $550,000. Employer contributions for the Canada/Quebec Pension Plans and Employment Insurance amounted to $10.6 million. Employer health payroll taxes were approximately $3.4 million. Payments in lieu of leave were about $0.3 million.

Retrospective—Compensation for employees of Parliament

As noted, employees, in effect, serve one of five distinct employers.

Individual Members of the House of Commons

These are the political and administrative staff directly supporting individual MPs. These have grown somewhat in numbers over the years, from about 1,060 in 1990–91 to around 1,400 in 2002–03. Their maximum pay is set by the Board of Internal Economy, which is chaired by the Speaker. In 1990–91 the maximum was $58,700; in 2002–03 it was $68,400.

The House of Commons, under the Board of Internal Economy

These employees serve the House as a whole, reporting to the Clerk of the House. There were about 1,700 such employees in 1990–91, and around 1,500 in 2002–03. Their salaries and working conditions are determined through collective bargaining, and are broadly similar to those for analogous jobs in the regular public service.

Individual Senators

These employees are employed on terms similar to those applying to MPs' staff. There were just over 100 in 1990–91 and 150 in 2002–03.

The Senate

As for the House of Commons, the Senate has dedicated staff serving under the direction of the Senate Standing Committee on Internal Economy, Budgets and Administration and reporting to the Clerk of the Senate. There were about 349 such employees in 1990–91 and around 400 in 2002–03.

The Library of Parliament

This is also a distinct employer reporting jointly to the Speakers of the two Houses of Parliament. There were about 252 employees in 1993–94 and 375 in 2002–03.

Total salaries and wages

The total cost of salaries and wages (including overtime and allowances) for these five categories of employees of Parliament was about $138.2 million in 1990–91 and remained close to that total as late as 2000–01, when the total was about $152.1 million. By 2002–03, this amount had increased to approximately $202.8 million.

Table 2105 Changes in expenditures in other areas of compensation for employees of Parliament, selected years since 1990
	1990–91	1995–96	1999–2000	2002–03
Severance Pay	$898,900*	$2,303,051	$996,917	$1,844,700*
Lump sum Performance Pay	–	–	$115,100	$561,040
Employer contributions for CPP/QPP and EI	n/a	n/a	$8,660,344	$9,561,948
Payroll Health taxes	n/a	n/a	n/a	n/a
Pay in lieu of leave	$183,700*	$352,084	$461,575	$509,606*
* Figures include data on the Library of Parliament

Expenditures in these areas are broadly similar in pattern to those evidenced by other employers in the federal public sector, driven as they are mainly by policy decisions on staffing levels and contribution rates.

Ministerial staff compensation

The Prime Minister and Cabinet Ministers also employ staff to assist them. In 2002–03 there were about 75 employees in the Prime Minister's Office (PMO), and about 400 Ministers' exempt staff. Salaries paid in relation to the PMO were about $4.5 million; for Ministers' exempt^[142] staff, the total was about $27 million.

For 2002–03, the Guidelines for Ministers' Offices^[143] stated that the normal complement in a Minister's office was 13 exempt staff members, including one Executive Assistant, with a salary equivalent to EX 2 in the regular public service, various Special Assistants, and support staff. The individual salaries could not exceed a total salary budget of $820,000 for a Minister's office.

As for other special groups of employees covered in this part of the chapter, Ministers' exempt staff generally participate in the same pension and benefits plans and leave entitlements as employees in the regular public service. On termination, exempt staff may receive severance pay equal to two weeks' pay for each year of service, and discretionary separation pay of up to four months' salary (or six months if the employee is subject to the Post-employment Code for Public Office Holders).

Retrospective—Compensation for Ministerial staff

Turning to a historical perspective, Table 2106 below lists the staff levels f or the PMO and Ministers' offices for selected years from 1990 to 2003.

Table 2106 Exempt staff, PMO and Ministers' offices, selected years, 1990 to 2003
Year	PMO Exempt staff complement (n)	Ministers' offices exempt staff complement (n)	Total exempt staff—PMO & Ministers' offices (n)	Total exempt staff salaries—PMO & Ministers' offices ($ millions)
1990–91	99	361	460	22.4
1994–95	76	351	427	20.5
1999–00	80	445	525	28.4
2002–03	75	436	511	31.5

Since at least 1984, there have been Treasury Board guidelines governing the complement of Ministerial offices and staff remuneration. The 1984 document, entitled "Information on Budgets and guidelines on Terms and Conditions of Employment for Ministerial Staff," set out the following guidelines:

• Each Minister was authorized to have a Chief of Staff whose salary could not exceed the maximum salary for EX (Executive) 4, the normal level for Assistant Deputy Minister positions.
• Each Minister was also permitted to appoint one Executive Assistant with a salary not higher than the maximum of the Program Administration (PM) 6 level.
• Each Minister could hire any number of Special Assistants (salary up to the PM 5 maximum), Private Secretaries (salary up to the maximum of Secretary level 4), or other lower level clerks and secretaries, provided the total salary expenditure for that Minister's exempt staff did not exceed $400,000 ($325,000 for Secretaries of State).
• Because the maximum number of departmental staff was reduced to 10, the total budget for a Ministerial Office was reduced by 11% from $740,000 to $660,000.
• No overtime was to be allowed for exempt staff, but a premium of up to 10% was allowed on the employee's salary in lieu of overtime and bilingualism bonus.
• Severance pay was permitted for long-serving staff in the event of resignation, retirement, lay-off or death. Up to two months of separation pay was permitted when the Minister terminates employment without notice. 

In subsequent years the maximum pay rates were amended to keep pace with increases applying to comparable public service positions. In some cases the Treasury Board authorized salaries above the declared comparator maximums for individual exempt staff. As of 1986 separate additional budgets were authorized for some Ministers with exceptionally large responsibilities. By the 1991 revision, separation pay was permitted to a maximum of six months' pay for exempt staff members subject to Part III of the Conflict of Interest and Post-Employment Guidelines. Other staff could receive up to four months' salary on termination.

In 1993, the Guidelines for Ministers' Offices were substantially revised, as follows:

• The top exempt staff position was designated "Executive Assistant" with a maximum salary equal to the top of the EX 2 pay range.
• There could be up to four Special Assistants, three paid up to the PM 6 maximum, and one to the PM 4 level.
• Ministers could also appoint up to seven support staff earning no more than the pay of an Administrative Services (AS) 3 level employee. The total of exempt staff in a Minister's Office was thus limited to 12.
• A maximum salary budget was set each year accordingly.

In later years, some additional staff was authorized for Ministers with large portfolio or political responsibilities. In December 2003, following the period analyzed in this report, the title of Chief of Staff was revived, with maximum pay equal to the EX 4 level.

Ministers' exempt staffs generally participate in the same pension and benefits plans as employees in the regular public service at the same level.

Students

Each year the departments and agencies within the core public service domain hire over 10,000 students for temporary jobs in the core public service. The main vehicles for this hiring are the:

• Federal Student Work Experience Program (with about 9,000 assignments each year),
• Post-secondary Co-op/Internship Program (with about 4,000 assignments in recent years),
• Research Affiliate Program, and
• International Exchange Program.

There are also unpaid assignments, for example, under the Secondary School Co-op Education Program. Additional students are employed by other federal employers.

Students are normally hired under an exclusion order pursuant to the Public Service Employment Act, and are not considered regular public servants. For post-secondary students, hourly pay ranged in 2003 from a low of $9.99 for first-assignment college students to $20.05 for doctoral students with experience. Secondary school students earn between $8.34 and $9.18 per hour depending on the province in which they are employed. The number of students employed fluctuates over the course of the year, peaking naturally during the summer. The total estimated cost of student salaries in 2002–03 was about $126.8 million.

Students have access to overtime pay and other allowances (but not the bilingualism bonus) on the basis of the collective agreement that relates best to their work assignment. They receive vacation pay equal to 4% of their total salary. Students are normally paid for designated holidays, and are eligible for bereavement leave but not sick leave.

Retrospective—Student compensation

The two main programs have been in place since 1990, throughout our period of focus. The Federal Student Work Experience Program (FSWEP), previously known as the Career-Oriented Summer Employment Program, offers employment opportunities intended to enrich their academic studies, help fund their education, develop their employability, and help students evaluate future job choices, including within the federal public service. In 1995, the Public Service Commission assumed responsibility to administer this program.^[144]

The other main program is the Post-secondary Co-op/Internship Program (previously the Cooperative Education Program), which provides students with assignments related to their field of study, in cooperation with their academic institution.

Table 2107 summarizes the average number of students employed at month end over the year under these programs, and the total annual cost of the associated student salaries. It should be noted that there is considerable seasonal fluctuation in the number of students employed at any given time (e.g. there are likely more students during the summer months). The total number of individual students employed during the course of a year would likely be more than double the figure indicated in Table 2107. From the Table it is evident that while the average monthly level of student employment has increased by about one tenth since 1997, the payroll has risen by about one third.

Table 2107 Average monthly student population and related salary costs in the core public service domain, 1997–98 to 2002–03
Year	Average population	Annual payroll   ($ millions)
1997–98*	4,693	92.8
1998–99	4,411	90.5
1999–00	4,614	101.4
2000–01	4,778	108.2
2001–02	5,278	125.0
2002–03	5,188	126.8
*This figure is an estimate based on the best available data.

Historical overview—Other groups domain

Table 2108 provides a roll up of compensation cost trends in the Other groups domain for 1990–91, 1997–98 and 2002–03. Our information is more incomplete for this area than for earlier sections of the report, but it is reasonably solid for the two major components of salaries and government pension contributions.

Table 2108 Summary of the evolution of total compensation for the Other groups domain, 1990–91, 1997–98 and 2002–03.*
COMPONENT Other goups domain (MPs, Senators, judges, students)		Employer cost ($ millions)
		1990–91	1997–98	2002–03
1.	Salaries and wages (Regular payroll)**	420	467	632
		Judges 120 Parl. (HofC) 31 Sen. 9 EE Parl. 138.2 MO/PMO 22.4 Students ~100	Judges 160 Parl. 32 Sen. 9 EE Parl. 152.1 MO/PMO 20.5 (1994) Students 92.8	Judges 218.2 Parl. 41.5 Sen. 11 EE Parl. 202.8 MO/PMO 31.5 Students 126.8
2.	Pensions	20	42	74
		Judges 18 Parl. 2.2	Judges 35 Parl. 7.1	Judges 54 Parl. 20.3
	Totals	~440	~500	~700
* This chart, unlike comparable charts earlier in this chapter, focuses exclusively on salaries and wages and pension costs. The reasons for this are three-fold. First, there is a lack of uniformity in what elements of compensation are available to the various groups which make up this domain (i.e. compensation such as overtime or performance pay are available to some but not all groups). Second, many of the costs related to these benefits are covered by the Treasury Board directly, and factored into the figures used to described the core public service domain. Finally, the data that is available on other compensation elements is incomplete and the total amounts relatively small.

The incompleteness of the available data renders it inappropriate to offer any overview observations for this domain.

We now proceed with a brief review of compensation in the federal business enterprises and other Crown corporations domain.

 

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