Beware the departing politician

February 6, 2011

While researching this column I ran across something which doesn’t make any sense at all: Ontario provincial members of parliament have no pension plan. Mike Harris eliminated it in 1996. Since then there has been the problem of MPPs hanging onto their seats because they have nowhere to go. This is not right.

When elected Conservative leader, John Tory couldn’t get anyone to resign to let him run in a by-election, not out of spite, but because no one could afford to give up his livelihood without any real hope of finding a comparable job (Hokan 2009). “MPP Norm Sterling has a vivid recollection of the tragic suicide of a Liberal member who lost his seat and experienced a deep depression that was partially due to his inability to re-integrate into the workforce despite holding a PhD in theology. At the time former Premier Bob Rae observed that this tragedy ‘causes all of us to really reflect on some of the challenges and difficulties of public life as well as the difficult transitions that are involved in coming in and coming out of politics.’ Former Speaker of the Assembly, David Warner, recalls that a colleague of his, who served for fourteen years, was unable to find work for years and narrowly avoided destitution because of the pension he received”(Hokan 2009).

Over the last nine years we have managed to undo some of the damage Mike Harris and his cronies inflicted upon Ontario’s social safety net with eight years of slash-and-burn neo-conservatism. But the plight of our MPPs remains a problem there will likely be no political will to solve.

But why should a capable young man with a family like our MPP Steve Clark have to take an insecure job with lousy re-employment prospects and no pension other than a small RRSP when if he held an equivalent position with a crown corporation like Ontario Power Generation or the Ontario Lottery Corporation, he would be in line for ridiculously high severance packages?

The lack of fair compensation and security for MPPs leaves the door open for corruption, for the legislators to find their own ways to feather their nests. Here we have to look again to the legacy of Mike Harris.

When I think of Mike Harris the image which comes to mind is of the gruff premier seated at a kitchen table with a typical family around him while he tries to stuff loonies into a pickle jar. This folksy style worked well for Harris, propelling him to two majority governments. What’s interesting about the man’s career, though, is how quickly he ditched the common touch upon leaving office. For Mike Harris the pickle-jar loonie saver became Mike Harris the Bay Street tycoon as soon as he had put in his time at Queen’s Park and began to collect his reward from grateful corporations on Bay Street.

Toronto Star reporter Tony Van Alphen wrote in 2010 that Harris now makes well over a $1 million a year from a string of corporate directorships. While Harris never earned a university degree, he is an advisor to a prominent Bay Street law firm, Cassels Brock and Blackwell. Magna Auto Parts pays Harris about $600,000 per year. Small wonder he supported Belinda Stronach’s candidacy for the Conservative leadership in 2004. Some of the other directorships are less demanding of Harris’s time and principle: Augen Capital, Charwell Seniors Housing Real Estate Investment Trust, EnGlobe Corp., Canaccord Capital, Routel Inc. and FirstService Corp. all help Harris supplement his meager Queen’s Park RRSP. Harris did away with his own pension, after all, so has to make a living some way.

Here’s the unedited press release: “We will end sweet deals politicians have created for themselves…M.P.P.s’ pensions will be abolished and replaced with an RRSP program similar to those used by professionals in Ontario. The tax-free benefits paid to politicians will also be abolished they will be paid a straight salary, just like ordinary Ontarians.” (Government Gets Rid Of Gold Plated Pensions, April 10, 1996) Well, Mike, I don’t know if most Ontarians without a degree can hold a job at a Bay Street law firm, or as a director of Magna. So the question is, how did you land those jobs?

Mike Harris’s prosperous life after his time at Queen’s Park is what causes me concern about the Harper government’s plan to cut corporate taxes in Canada. Harris earned his nest egg through two terms of gleefully hacking away at Ontario’s social safety net to the benefit of the business community.

What better way to provide a cozy retirement for Stephen Harper and his inner circle than to cut taxes for corporations on their way out the door and rake in the directorships later? Look how well it worked for Harris. Do you think Harris cronies Jim Flaherty, Tony Clemens and John Baird aren’t aware of that?

Last week the PMO spent $6.5 million on ads to promote corporate tax cuts. Before you buy what the ads offer, keep in mind that Harper and company won’t remain in Ottawa forever, and providing for their own retirement seems to be the first priority of neo-conservative minds.

-Kimlan Hokan “The Compensation Conundrum: Does M.P.P. Compensation Determine the Composition of the Ontario Legislature?”
-Tony Van Alphen “Director positions pay off for ex-Ontario premier” Toronto Star, April 6, 2010

Afterword: Elizabeth May may come up short in some areas of public life, but no one can say she can’t write. Check this one out:


One Response to “Beware the departing politician”

  1. N. Aldread Says:

    Nice article.

    One of the ‘nest featherings’ that Harris and many other MPPs indulged in after their pensions were cut, was their refusal to pay the federal income tax on that portion of their pension that was converted to a private retirement fund. If I was to cash in my RRSP before retirement I’d expect to lose a significant chunk of it to taxes. When the MPPs (including Harris himself) realized this they refused to pay up (Harris purportedly appealed directly to Jean Chretien to help him out).

    It was all quietly hushed up in 2003 when Greg Sorbara (then Finance Minister for Ontario) cut a cheque for approximately $30 million from the Province’s Treasury to pay the federal taxes the MPPs owed from their pension conversion.

    Not sure how much Harris personally pocketed from the deal…but word has it it’s somewhere in the neighborhood of $750,000.00. No one has ever asked him outright.

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