December 2, 2009      HOUSE OF ASSEMBLY MANAGEMENT COMMISSION      No. 23


The Commission met at 5:30 p.m. in the House of Assembly.

MR. SPEAKER (Fitzgerald): Good evening.

I would like to welcome members and House of Assembly staff to a regular scheduled meeting of the House of Assembly Management Commission. We will start, as we do every other meeting, by asking members present to introduce themselves, and I will start with Ms Marshall to my immediate left.

MS E. MARSHALL: Beth Marshall, District of Topsail

MR. KENNEDY: Jerome Kennedy, Carbonear-Harbour Grace.

MS BURKE: Joan Burke, Government House Leader and MHA for St. George’s-Stephenville East.

MR. KELVIN PARSONS: Kelvin Parsons, Opposition House Leader and MHA for the District of Burgeo & La Poile.

MS MICHAEL: Lorraine Michael, MHA, Signal Hill-Quidi Vidi.

MS KEEFE: Marie Keefe, Clerk’s Office.

MR. MACKENZIE: Bill MacKenzie, Clerk.

MR. SPEAKER: My name is Roger Fitzgerald and by virtue being the Speaker, the Chair of the Commission.

I would like to thank members and thank staff. It is always a challenge when the House of Assembly is open. I know by the time that I come in here in the mornings and I see other members’ cars parked in their respective places that it is a long day when we have to meet after the House is closed. I thank members and I thank staff for making time available to have our Management Commission business attended to.

We will get right into the agenda. The first item on the agenda will be the approval minutes for November 18, 2009 Management Commission. If there are no errors or omissions in this particular set of minutes, would somebody move that the minutes be adopted as written?

Moved by Ms Burke; seconded by Ms Michael.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

The motion is carried.

On motion, minutes adopted as circulated

MR. SPEAKER: The second item on the agenda is to deal again with the Members’ Compensation Review Committee recommendations. We felt since the House of Assembly was in session, and normally we know that the House will close sometime between now and Christmas, usually, that we thought it important that we deal with some of the recommendations, especially the recommendation on salaries as it pertains to the Members of the House of Assembly and allow, if possible, to have legislation introduced in the House in order to deal with a rollback of 8 per cent in the salaries as recommended here, if that is the Commission’s wish as suggested by the Members’ Compensation Review Committee.

The Clerk has done a fair amount of work on those particular topics. As you look through your agenda, you will see some recommendations and proposed amendments; those are strictly for discussion purposes. If members feel that they want to have other wording there, it will eventually go back before it is brought to the House of Assembly for approval or disapproval, it will go back to Legislative Council and have the proper wording placed into each clause of the legislation. But, for our purposes right now, and I think it might be very close to what we may want to see, we have made some suggestions here, and it is strictly for members to read and if they have any suggestions or recommendations or changes please let us know when we go through them.

So we will take them one item at a time.

AN HON. MEMBER: (Inaudible).

MR. SPEAKER: Yes, there is another copy here if any members want an extra copy.

There is some background there that members will see how this came about. As I said earlier, it came about by recommendations and by, again, referring back to the Green commission, what was recommended by Chief Justice Green in the House of Assembly Accountability, Integrity and Administration Act.

So I am going to ask the Clerk to lead us through, and if members want to interject or be recognized while the Clerk is talking, then let me know and we can do it in an orderly fashion and maybe we will vote on each proposed amendment rather than muddling the waters and trying to remember everything that was said. So that is the way that we will approach the proposed changes.

The Clerk.

CLERK: Thank you, Mr. Speaker.

I will just go over some of the matters in this covering briefing note and then we will do the amendments as you suggested, Mr. Speaker, one by one.

The note quotes paragraph 16(5)(a). This is the note called Members’ Compensation Review Committee Recommendations: Salaries and Allowances, Possible Legislative Amendments. So we have quoted paragraph 16(5)(a) of the Accountability Act there which talks about the process for matters requiring legislative amendment. So the Speaker receives the report, passes it to the Commission as soon as possible, the Commission accepts or modifies the recommendations of the Members’ Compensation Review Committee and then matters that require legislative amendments show up in paragraph "(a) submit the recommendations, as accepted or modified, relating to salaries and non-taxable allowances and other matters that may be necessary to be implemented by legislation, to…" an appropriate minister for a bill.

I mention in the note that traditionally we have used the Government House Leader even though Chief Justice Green talked about the Minister of Finance or Minister of Justice. The conduit to Cabinet traditionally for the Commission has just been to ask the Government House Leader to bring it forward. Some minister has to address matters in Cabinet, so we do need a minister to speak to the matter once it hits cabinet. So, traditionally, it has been the Government House Leader although it could be another minister.

The Commission will accept or modify these recommendations. The Speaker will write the Government House Leader, I would suggest, and she brings the matter to Cabinet. Cabinet still has its authority for the preparation of bills to be brought to the House. The Commission cannot usurp that. It is still Cabinet’s prerogative to decide a bill to be brought to the House.

The point we make at the end of that second bullet is the one the Speaker made that there is a very short timeframe now before Christmas, so if we want to get this done, we will have to move rather rapidly.

The Members’ Compensation Review Committee made four recommendations respecting salaries and one respecting the allowances. The Law Clerk has drafted proposed amendments which would be the basis for any amendment. We are suggesting if the Commission agrees with these, the letter to the Government House Leader and the minute of the Commission would qualify that we approve this amendment generally along the lines as proposed in this note. The letter to the Government House Leader would say that as well because the Office of Legislative Counsel always retains that final basis for editing and clarifying matters and so on.

As the Speaker said, by putting these proposed amendments forward, we are not prejudging the Commission or Cabinet, we are just dealing with what the Members’ Compensation Review Committee recommendations said. The Commission is still free to modify. So we are not prejudging anything, we are just trying to get a head start on matters so we could do it relatively quickly.

The last bullet, which is on the second page of the note just reminds the Commission that at an earlier meeting there was some discussion, briefly, about whether – since the Members’ Compensation Review Committee was recommending that the automobile allowance be applied to the three office holders that we have been discussing, there was a brief discussion of whether we should try to have a retrospective application of the Members’ Compensation Review Committee recommendation. There is a possible amendment in the package if indeed the Commission wants to pursue it that way.

Mr. Speaker, if that is it, unless there are questions, we could look at the first proposed amendment?

MR. SPEAKER: I think we can move to the first proposed amendment.

CLERK: Okay. In the sheet called Recommendations and Proposed Amendments, we have quoted the MCRC Recommendations verbatim and then we have numbered amendments down below.

Amendment 1, which is really dealing with the basic salary of MHAs, and that is in subsection 11(1) of the Accountability Act, and Chief Justice Green, when he drafted it, for the first time in many years, had salary enshrined in statute and that was one of his principles. So the Act currently has the $92,000 et cetera, which was in effect July 1, 2007. Since then, we have had the amending formula that Chief Justice Green proposed of the 3 per cent raise, which came in, in 2007 for the public service, for members it was not applied until 2008. So, this $95,357 would be the annual salary of members if the Members’ Compensation Review Committee recommendation to relinquish the $8,000 is agreed to.

MR. SPEAKER: Commentary?

Ms Marshall.

MS E. MARSHALL: The only comment I make there is, and I am sure Ms Proudfoot will probably identify it, but the section of the Act that we are repealing, it states that the instalments are paid in arrears. So I think that this one should also say, after the word instalments there is a comma and then you say in arrears.

CLERK: Okay. We will make a note of that, and that may be the sort of thing the Office of the Legislative Council would catch.

MS E. MARSHALL: Yes, would pick up on.

CLERK: Yes.

MR. SPEAKER: Further commentary?

If not, the proposal is that subsection 11(1) of the House of Assembly Accountability, Integrity and Administration Act is repealed and the following is substituted: "11(1) A member is entitled to be paid an annual salary of $95,357 payable in 26 equal installments." - in arrears.

Could somebody make that a motion?

Made by Mr. Parsons, seconded by Ms Michael.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

CLERK: Amendment 2 deals with subsection 12(1) of the Act, and that is the portion of the Act which puts all the office holder salaries connected with the Legislature, again, into statute which was one of Chief Justice Green’s principles rather than having them decided by the Commission and so on.

So these, like the basic members’ salaries, deal with what was written in the Act and come into force on June 14, 2007, plus the 3 per cent which was applied July 1, 2008, but relinquishing the 8 per cent which was applied to these office holder salaries. So it essentially gives the same effect as the first amendment did on the basic salary of members.

MR. SPEAKER: The proposed amendment, again, is: "Subsection 12(1) of the Act is repealed and the following is substituted: Other Remuneration 12(1) A member who holds one of the following positions shall be paid an additional salary as follows: (a) speaker, $54,072; (b) deputy speaker and chair of committees, $27,033; (c) deputy chair of committees, $13,517; (d) leader of the opposition, $54,072; (e) opposition house leader, $27,033; (f) deputy opposition house leader, $18,457; (g) leader of a third party, $18,918; (h) party whip, $13,517; (i) caucus chairperson, $13,517; (j) chairperson, public accounts committee, $13,517; and (k) the vice chairperson, public accounts committees, $10,333."

Commentary?

Will somebody make a motion that the Other Remuneration will be adopted and submitted as recommended?

Made by Ms Burke, seconded by Mr. Kennedy.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

I might add that those figures are reflective back to June 14. No, June –

CLERK: June 30 of the current year, before the 8 per cent.

MR. SPEAKER: June 30 of this current year, prior to the 8 per cent. Yes.

CLERK: Number 3 deals with subsections 15(2) and (3) of the Act. Those are the provisions of the Act where Chief Justice Green applied an amending formula for members’ salaries and office holder salaries. So it was those provisions – I will just quickly mention 15(2), I will summarize it: the salary of a member and the salaries for the positions referred to in subsection 12(1) shall be adjusted annually on July 1 by a percentage equivalent to the annual increase given in the previous year in the executive pay plan of government until the next Members’ Compensation Review Committee reports, and so on and so forth.

So, 15(2) and 15(3) essentially were Chief Justice Green’s take on a means of periodically adjusting members’ salaries. The Members’ Compensation Review Committee, you will remember, did not put a formal adjustment formula forward. I guess it was a de facto one of a 0 and 0 per cent, or 0, 0, 0, however you like to look at it, until the next Members’ Compensation Review Committee reports. This was a matter of some discussion at the meeting with the Members’ Compensation Review Committee, but 15(2) and (3) do need to be addressed in the Act, because if we accept the Members’ Compensation Review Committee recommendations, that amending formula will no longer be applied.

So, we would repeal 15(2); 15(3) – and you will see the amendment below the note – that is the precise wording that is there currently. So nothing is changed in that, in the latter part of subsection (3). The beginning part of subsection (3) is: subsection (2) – the one we are talking about repealing – shall cease to have effect following the submission of the next Members’ Compensation Review Committee, and so on and so forth. So with (2), it is tied to the suggestion that the first Members’ Compensation Review Committee, the one that has just reported, would provide the amending formula for subsequent increases. Of course, it did not quite do that. So the final part of that current subsection (3) is maintained, which just speaks to the appropriateness of the manner for providing increases shall be dealt with by members’ compensation review committees.

MR. SPEAKER: Commentary?

Ms Burke.

MS BURKE: I guess I just want some clarification. The review committee suggested that the next review be done within six months of this one – within six months, I mean, of the next general election.

CLERK: Yes.

MS BURKE: So, will that be stipulated in legislation? I am assuming then, that because we stipulated for the next general election, we are not tying all further general elections to this law?

MR. SPEAKER: The Clerk.

CLERK: Yes, that is a point – there are a couple other recommendations which would, if the Commission wants, require legislative amendments, which do not fit neatly into the categories of salaries or pensions, although the appointment time of a Members’ Compensation Review Committee is obviously closely tied to both. The Members’ Compensation Review Committee recommended, as Minister Burke says, within six months of the next General Election. So if the next General Election is October – I forget, eleventh, perhaps –

SOME HON. MEMBERS: Eleven.

CLERK: – 2011, then this would have to be appointed by April, 2012. If indeed, the Commission wants to confirm that and not leave it open for the next Assembly to decide, then the Act will have to be amended, because as you are aware, what the Act says now is: the House of Assembly shall, at least once during each General Assembly, by resolution, appoint a committee.

So, the act as it is currently stated leaves it open for the Assembly to decide when this Members’ Compensation Review Committee will be appointed. If this Commission really wants to confirm that it is done in six months, then we should amend section 16(1) as well. Now that perhaps was not as urgent as some of the salary matters, but if the Commission wished and wanted to confirm it, we do have to amend 16(1). The only point is, and it is not to dispute the Members’ Compensation Review Committee recommendations, currently the House, the Assembly, has the leeway to appoint it when it chooses and the next Assembly could chose to appoint it within six months or it could wait two years. So, it is really up to the Commission how they want to approach it.

MR. SPEAKER: That particular topic is certainly troublesome with the six months.

Ms Burke.

MS BURKE: I guess I throw it out for discussion here at the committee level because it was part of the recommendations and there has been no formula set and that was, I guess, in the absence of a formula that was put in place that it be done early in the mandate of the next general election. So, I would like to see it put there that it would be done in the first six months to show the seriousness that it has been done but I mean that is open for debate how people feel about it.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Thank you.

Yes, I agree with Ms Burke actually, I think it would be better to put it in so that there is no doubt. I mean I think it is going to be important to have a formula put in place and it needs to be put in place very early on, so I think putting in the six months, making sure that it is in there and named for the new Assembly is very important. What happened this time, I think it was way too late that we set up the committee. I like their recommendation that the committee be set up. So let’s make sure that it is put in the legislation so that it will happen.

MR. SPEAKER: It is certainly up to members’ wishes because right now the way it is written is that the committee has to be appointed and you do not even have to report within the present sitting of the Forty-Sixth General Assembly. The only thing is I caution members that it has happened in the past with a fall election that the House has gone without being opened in the fall for a regular sitting. Normally, then it would open the following March and you are into the Speech from the Throne, you are into Budget. So members should be cognizant of the six months boxing a government in, to appoint a committee probably as one of the first items on the agenda when a new government comes into office. So just be aware of that.

Ms Burke.

MS BURKE: I guess that further strengthens why I would like to see the six months put in because it would make sure that this is done. The other thing is it would also ensure that it is done through legislation now based on these recommendations, because we can certainly get back into the whole concept that there are other things happening, this floats on and on again.

The point that I want to make here is that if we base this on the recommendations of the report that we are reviewing now, I would not want this to be held that every General Assembly has to have this within the first six months, because there are going to be times when governments change or anything can be happening. My point is that I want this to be reflective of what we received as a Commission, but I really would not want to tie the hands of every General Assembly from this point on with those six months. So, the wording would, I think, have to be reflective that it is based on these recommendations for the next General Assembly.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Just briefly to say yes, I agree again with what Ms Burke is saying. I really do not think - I know time passes quickly and six months can move very quickly, but if this is identified for the new government after October 11, 2011 as something that they have to do then they will do it. I think that is probably the attitude we should take, and what Ms Burke is saying I actually agree with. It is us taking this recommendation for the next, and then the next committee can make other recommendations, but this is the one – and, obviously, they are going to look at what happened this time in doing the work when they get set up, whenever they get set up within that six months.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: Thank you.

I agree with Minister Burke and the Leader of the NDP that this should be put in legislation so that it gets done within six months. I do not think, with all due respect, the Chair’s suggestion that it might, in some way or other, tie the hands of government because they only have a short period of time after the election. I do not think our concern should be whether the government does or does not open the House or whatever else. I think the priority here, and the reason we have these Commissions and these committees set up is because of all forty-eight members. We have left it to an independent outside tribunal to decide these things, and I do not think we should be guided in our deliberations here by how it might or it might not be on the government schedule. I do not think that is what the House of Assembly, that we are dealing with here, and the members who sit in it should be guided by. That would be my suggestion on that is that we should not be bound by that and if the committee recommended that it be done within six months I think it should be in there.

I also do not know if we should be tempering it or making it subject to what happens in the future. I think we should take the current compensation committee’s recommendation, as is, and put it in there. For example, the next compensation review committee shall be struck within six months of the next General Election, period. I do not think it is for us no more than it was for this committee to say whether you should or you should not, or whatever, how long it should be, whether it is carved in stone forever and a day. I think we should live with what they said, put it there. If the next compensation review committee that would be, which would be within six months of the next election, decides that they want to change that, that is it, they are at liberty to change it. So I think we would be going out beyond what this current committee is saying if we put any such restrictions on. Their suggestion was six months; I think we ought to leave it at that.

MR. SPEAKER: Further commentary?

The Clerk.

CLERK: Yes, just a couple points.

The way the act currently reads is there actually can be more than one Members’ Compensation Review Committee within a General Assembly. So, even though we might think of it as one, the possibility exists for more than one.

I am sure between the Law Clerk and the Office of Legislative Counsel, they could do an amendment which would be, not withstanding the provision of 16(1), the next Members’ Compensation Review Committee in the Forty-Seventh General Assembly will be appointed, blah, blah, blah. So the existing provision would stay, but it would enforce the need for the very next one to be done within six months. I am sure the Law Clerk and Legislative Counsel could do that.

MR. SPEAKER: If there is no further commentary, then we will read what we have agreed to here. It is subsections 15(2) and (3) of the Act are repealed and the following is substituted, "The salary of a member under subsection 11(1) and the salaries for positions referred to in subsection 12(1) shall not be adjusted except in accordance with recommendations of the first members’ compensation review committee appointed after the coming into force of this subsection."

15(3) would read, "The appropriateness of the manner of providing for periodic increases for members’ salaries during the period between the appointments of subsequent members’ compensation review committees shall be dealt with by those committees."

The Chair is also hearing, and while we get back to the members with the proper reading, that we will also follow the recommendation of the Members’ Compensation Review Committee in having the next Members’ Compensation Review Committee struck within six months of the election that follows, which will be October 11, of 2011.

The Clerk.

CLERK: Just to say, Mr. Speaker, it would be preferable if we do not have to go back to the Commission, but if we have a Commission decision that the Law Clerk and Office of Legislative Counsel are to draft amendments to give effect of recommendation 4, under salaries, such that the next Members’ Compensation Review Committee is appointed within six months. If we have to go back to members with the wording, we will lose a couple of more days.

MR. SPEAKER: Okay. Are members satisfied with that, or would they like to see the wording before it comes to – the wording will be exactly what is in the recommendation now.

Ms Burke.

MS BURKE: I think that if we give direction as to what our intent is, I think the wording will be reflective of that. We will certainly have the opportunity to clarify or refine that, if necessary, as we move this through the Legislature as well.

MR. SPEAKER: Sure, yes, sure. It will be an opportunity where amendments can be made.

Ms Marshall.

MS E. MARSHALL: Could I raise an issue that was raised in the briefing note, and that is the subsection 15(2), the last phrase "…after the coming into force of this subsection." I know in the briefing note it spoke about, should we go with that general wording or whether we should specify a date. Could Mr. MacKenzie speak to that?

MR. SPEAKER: The Clerk.

CLERK: Yes. The Members’ Compensation Review Committee used the phrase "…after the coming into force…" and so on. If we have a precise date, it just makes life slightly easier. When you are reading the legislation, you see after December 31, this was in effect. If it says after the coming into force, you then have to go back and do that other stage of research to see when this provision came into force. So if the Commission is okay with it, if we assume December 31 is an appropriate date – to pick a date somewhat arbitrarily – it is just a little cleaner. It saves people doing the bit of research to find: When did this provision come into force?

MR. SPEAKER: So that would be the adjustment in salaries and remuneration that we are talking about?

CLERK: Yes.

MR. SPEAKER: Do members agree that December 31 should be the date of 2009 when the adjustment to members’ salaries and the remuneration for office holders will become effective?

OFFICIAL: (Inaudible).

CLERK: It is easier in the statute for years to come.

MR. SPEAKER: It is easier and cleaner.

MS E. MARSHALL: (Inaudible) cleaner.

CLERK: Yes.

MR. SPEAKER: Okay. I do not think we need a motion on that. Everybody seems to agree with that, and like I said, this will all come back to the House.

The Clerk.

CLERK: The subsection (3), I guess, at the bottom of the page, Mr. Speaker. I am not sure if you went through that one or not.

MR. SPEAKER: Yes I did.

CLERK: Okay. The matter of the appointment of the commission, we will take it as a given, Marie, that it was a Commission decision to draft amendments to give effect to that Recommendation 4. So that will also be a Commission decision, I guess.

MR. SPEAKER: Yes, that was agreed.

Ms Michael.

MS MICHAEL: Just a procedural question. We voted on, I think we did – did we vote on the salaries, expenses, severances and pensions?

MR. KELVIN PARSONS: We did.

MS MICHAEL: I think we need to vote on each one –

MR. SPEAKER: Didn’t we vote?

MS MICHAEL: No, we did not vote on this one.

MR. SPEAKER: Are you talking about 15(2) –

MS MICHAEL: Number 3.

MR. SPEAKER: – or are you talking about 12(1)?

MS MICHAEL: I am talking about the recommendations under 3.3, which includes the repealing of 15(2) and (3).

MR. SPEAKER: Okay. We did not vote on subsections 15(2) and 15(3). We have not voted on that?

MS MICHAEL: No.

MR. SPEAKER: Okay. The recommendation will be made by?

Ms Michael, seconded by Mr. Parsons.

All those in favour?

SOME HON. MEMBERS: Aye.

MR. SPEAKER: Those against?

The motion is carried, that we will repeal sections 15(2) and 15(3) and the following that has already been read into the record will be substituted.

The next item on the agenda will be automobile allowances.

Again, I refer to the Clerk.

CLERK: Yes, thank you Mr. Speaker.

The Automobile Allowance; there are a couple of changes that we are proposing here – I should say changes to what is in front of you, following discussions today with the Office of Legislative Counsel.

If you look at the first amendment about paragraph 11(4)(a), what we had originally intended there was to add the words allowances and expenses. The Office of Legislative Counsel started to look at this, and it ties into the Members’ Compensation Review Committee recommendation respecting a certain ambiguity around the term allowances and constituency allowances. Our intention was to confirm that the Commission has the authority to decide matters around allowances, but the Office of Legislative Counsel says there are so many complicating factors around the use of that term, which the Members’ Compensation Review Committee identified, they would rather do a large review of its use, and if there are amendments required, we could do that in the spring. That is not an urgent matter.

The Law Clerk has gone through the act and the rules, the term allowances is used over 100 times, and there some shades of meaning where it does not apply. In the rules, there are categories of allowances, like office operations and so on, but then we find, for instance, in the act, it is often spoken of – well, for instance, in the section we are about to address, 15(1), as if this were some salary supplement and so on. It has a variety of uses, and they think rather than add in the term allowances anymore, they should do the larger review and see how it is done throughout the act and rules. So it is their advice that we do not proceed to amend paragraph 11(4)(a) at this time, and let them do a larger review of the subject. This would tie in with the Members’ Compensation Review Committee recommendation around constituency allowances.

MR. SPEAKER: Commentary?

Do members agree?

Ms Marshall.

MS E. MARSHALL: I agree with that, Mr. Speaker, because I have gone through this several times now and I did not think that the amendments proposed in 1, 2, 3 and 4, I could not understand why we were amending those sections. I know, too, we are using this term non-taxable allowance to define the car allowance. There is a definition in there that non-taxable refers to – I think it is under non-taxable under the Income Tax Act, and I found it really cumbersome, those amendments. It seemed to me after reading it, that 1, 2, 3 and 4, we did not need at all, that maybe all we needed was what was proposed in section 5. So if the wording is going to be deferred, I agree with that, because I certainly did not agree with what was being put forward in the briefing notes.

MR. SPEAKER: Commentary?

The Clerk.

CLERK: Yes, we can hold off on that. That is the advice of the Office of Legislative Counsel and they are the experts at drafting. They think it would – to add the word allowances more is just further complicating the whole issue of allowances.

Subsection 2 is the one we have talked about sometimes in the past. The Members’ Compensation Review Committee – and you remember, we did refer this matter to them – agreed that the Speaker, the Leader of the Official Opposition, and the Leader of the Third Party should be eligible for the automobile allowance under the ministerial expense reimbursement policy, but they did not propose any specific means of accomplishing it, which is consistent with their other approach in the rules. They simply suggested we should take steps to do it.

The simple way to do this, and it is the way we have proposed here in number 2, the amendment to subsection 15 is essentially to do what Green said to do in his recommendation. Now, without belabouring this, because I know the Commission has heard this a number of times. I believe that the term non-accountable in 15(1), which is the – that is the term that the Comptroller General and Department of Justice had a problem with. I think that is an error. If you go back to Green’s report, what he is talking about here, and his recommendations confirm it, it is irrefutable, he is talking about the 50 per cent non-taxable component that used to be part of members’ salaries. His recommendation, following the discussion of that – this is page 914 – he comes to Recommendation 56. I have the executive summary here, I do not have other copies of the Green report, but Recommendation 56 says this: "The Member’s non-taxable allowance should be eliminated." By that he meant the roughly $25,000 non-taxable, which was added to the $50,000 taxable, to comprise the member’s total compensation. So he said that should be eliminated, and that is when he grossed up the salary to the fully taxable $92,000.

Recommendation 56(2) then goes on to say this: "No further non-taxable allowance should be permitted to be created... unless the rationale for its re-introduction has first been re-examined and recommended by an independent commission…", and that is the Members’ Compensation Review Committee. That provision, Recommendation 56(2) then shows up as the section 15(1) in the act. The problem is the entire section of the Green report, he is talking about non-taxable allowances; he is talking about that $25,000 which was not taxed. It is absolutely crystal clear.

In my view, he made an error. When he drafted the legislation, 15(1), the whole point of it was the non-taxable; he used the term: non-accountable. I have some copies of the act here as well, Minister, if you want to see it. Now, it says in 15(1) – forget non-accountable or non-taxable here. No allowance of this type can be created unless it is recommended by the Members’ Compensation Review Committee; that is what 15(1) says.

So you go to the next section of the Act, 16, which describes the authorities of the Members’ Compensation Review Committee, and their only authority is to recommend non-taxable. The word: non-accountable, does not show up. So you have an internal inconsistency in the statute. 15(1) says: No new non-accountable unless the Members’ Compensation Review Committee recommends it. Turn to 16(5)(a), and the Members’ Compensation Review Committee can make recommendations respecting salaries and non-taxable allowances.

He made an error in 15(1), or someone did. It was intended to be non-taxable right from the beginning. It is exactly what Recommendation 56(2) in the report says. It is what the Members’ Compensation Review Committee is authorized to do, non-taxable allowances. So the 15(1), where he says: non-accountable, in my view, is an error. If we change it to non-taxable, we are simply doing exactly what Recommendation 56 says in his report – and I have copies there. I think it is nothing more than an error that he used the term: non-accountable, instead of non-taxable.

MR. SPEAKER: Mr. Kennedy.

MR. KENNEDY: I just want to go back for my understanding. This allowance, and the recommendation here, historically it has been given to the members we are talking about here, the same way it has been given to Cabinet ministers. Correct? That is the recommendation of the compensation committee.

I am a bit confused on the use of these terms: non-taxable and non-accountable. I can tell you that the monies paid to the Cabinet ministers are taxable. Whether you accept it as a lump sum, you are paying taxes on it, or whether you accept a mileage, you are paying taxes on it.

Furthermore, I do not know how we can describe something as non-taxable in a provincial statute which the Income Tax Act, being federal legislation, says is taxable. So I do not know if those terms really mean – how much they really mean here, other than to confuse the issue. It is taxable, so whatever money is given is taxable.

MR. SPEAKER: It is. The minister is right; it is just the way it is explained and the written, I think.

The Clerk.

CLERK: If I could, yes, just if I could jump in, because remember we talked about this at the meeting with the Members’ Compensation Review Committee.

The way 51 is written it is in the negative. An additional non-accountable allowance shall not be created. That is why the Comptroller General said you could not receive the auto allowance, but because the automobile allowance is taxable, if we go back to what I think was Green’s clear intention that an additional non-taxable allowance cannot be created, then there is no prohibition against the automobile allowance, because it is, as Minister Kennedy says, fully taxable.

So, that is the point, it is fully taxable. That, I think, is what Green said, you cannot create new non-taxable amounts, and his report bears that out. So the confusing thing is here is because 15(1) was sort of written in the negative, you cannot create one of these types of allowances. The non-taxable means that the ministerial allowance, being fully taxable, would be eligible, and there would be no prohibition.

MR. SPEAKER: There would be no new non-taxable, rather than non-accountable. As the Clerk said, that is the way it is written.

Ms Marshall.

MS E. MARSHALL: When you look at the legislation, Justice Green’s recommended legislation, talking about the non-accountable allowance, I do not necessarily agree with what the Clerk is saying. We did have non-accountable allowances. People did take out so much from their allowance without providing receipts in the past. When I read that legislation, I assumed that that is what Chief Justice Green was referring to.

I know that the Clerk has taken us through and tried to explain that that was not really what he meant, but it seems like it is a really convoluted way of going about approving the automobile allowance for those three positions. Why not just amend the legislation with a section by itself, instead of going through and amending all these different sections of the legislation? Why can it not be provided for just in one section without going through and tampering with all those other sections?

MR. SPEAKER: The Clerk.

CLERK: It may well be there is another way to do it. This seemed to be a simple one.

If you will just to turn to page 9-17, Ms Marshall, you will see that recommendation. It seems clear to me that this is what Chief Justice Green intended. Having said that, if there is another way of doing it, yes.

There is another element to this, outside of the automobile allowance. When you read that section of the Green Report, beginning at 9-14, you will see the title is: The Role of Non-Taxable Allowances. If we do not amend 15(1), then there is no explicit prohibition against the creation of what I might call non-taxable salary supplements, such as the $25,000 that used to exist. So irrespective of the auto allowance, it was this section where I think Green intended to ensure that there never were non-taxable salary components provided to members in the future.

So outside of the auto allowance, it would serve another purpose. However, the Office of Legislative Counsel is looking at this as well, and as Ms Marshall said, there is an amendment further on which may well be sufficient, and if the Commission just agrees in principle, I suppose, with the recommendation of the Members’ Compensation Review Committee that the auto allowance should be extended to those three office holders, we could leave the matter up to Office of Legislative Counsel to achieve it the best way they can. That is the only issue there.

MR. SPEAKER: Commentary?

Ms Michael.

MS MICHAEL: Just to say that I am glad that Ms Marshall brought up that point, because number 5 is the section, I think, that has just been referred to, that there is another section that stands alone, and the recommendation, which is under paragraph 5, does stand alone, and I really did not understand the need for doing everything that was being outlined in those proposed amendments. So I certainly will be interesting to see what the legislative committee comes up with, but it would seem to me that the recommendation that we will be looking at is a stand-alone recommendation.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: I am all for whatever is going to simplify the problem here. It seems the more we discuss it, the more convoluted and confusing it gets. I thought the compensation committee’s recommendation here basically said that the three parties, for example, the Speaker, the Leader of the Opposition, and so on, who were getting the automobile allowance they recommended that you should get them.

Now, whatever it takes to accomplish that, to me, is the simplest way to get there is where we need to go. Maybe the legislative draftsperson can give us some hints and whatever as to the easiest way to get there. To me, let’s not complicate it. That is not to say that the Clerk’s explanation of what Justice Green did or did not do is right or wrong or anything else. That is just to say, let’s take the committees recommendation, put it in its simplest form and get it done. That is what this is about, is implementing those recommendations of the committee.

MR. SPEAKER: So the Chair is hearing that the recommendation will be, take whatever steps necessary to confirm the automobile allowance that was in place for the Office of the Speaker of the House of Assembly, the Leader of the Opposition and the Leader of the Third Party prior to 2007, and whatever language should be used by the Legislative Counsel will be acceptable in order to achieve that means.

Could somebody make that a motion?

MR. KELVIN PARSONS: So moved.

MR. SPEAKER: Moved by Mr. Parsons, seconded by Ms Michael.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

The Clerk.

CLERK: That will also address that motion, item 3, we will not get into whether we need to define it. We will leave that to the Legislative drafters. So, that one does not need to be addressed.

On the next page, item 4, subparagraph 20(6)(a)(i), that is another one dealing with the word allowances that the Office of the Legislative Counsel would like to put on hold. So we would like to suggest that that one not be addressed at this time, Mr. Speaker. Again, it is similar to the one where we were amending 11(4), matters respecting allowances, the Law Clerk and Office of the Legislative Counsel will do a larger review. So if we could put that one on hold.

MR. SPEAKER: Members agreed?

Agreed.

The Clerk.

CLERK: Item 5, I think because of the motion the Commission just carried, that would also be subject to it. If this indeed is the way that that Office of the Legislative Counsel thinks the three office holders can best receive that allowance, than this was all we would need, but the more general motion you said about giving effect to the Members’ Compensation Review Committee recommendation, in my view, might also address section 20 of the act and the addition of subsection (9). It may be we do not actually have to approve this as is because the more general motion we just carried has the same affect.

MR. SPEAKER: Commentary?

Ms Burke.

MS BURKE: I think that what we need to get at, I would assume, is the fact that the automobile allowance is what we are going to approve. Now how we get that, as Mr. Parsons said, in the best wording is where we need to go, but when you look at (9) here it says, "… by directive, approve the adoption of allowance and expense allocations and policies for the speaker, leader of the opposition and leader of the third party at the same level applicable to ministers…". I would rather, at that point, put a rate in. It is almost like we are prescriptive with all our rates no matter what they are, and they are set out and that we go back to the review commission when we update or when we review these rates and there are increases.

What I do not like there - and again, I would be interested in seeing what the other committee members have to say - is that when we tie it to the ministers, all of a sudden then instead of dealing with the issues of the House as a Management Commission and our own review commission, which is set up to look at all these allowances and when they are reviewed if there has been changes in the ministers they can certainly use that in their research to make recommendations. So, I think we should set it - I would recommend that we set it for whatever the rate is now but any changes should still be tied to a review committee. Because why would we take certain rates and tie them to another way of doing things? I do not see the logic and the rationale behind it. It just seems like we are mudding the waters. That if we put down the rate that it is today and we say it goes to the next review commission or any review commission, they look at it and say: okay, the minister has this, this and this which is tied to the public service and these need to go up with it. It makes it cleaner than trying to say that we are reviewing all the expenses and this is the accountable way of doing it through this commission, and then we are saying well you have to tie it to another body. It just does not seem consistent with the way we approach things.

MR. SPEAKER: Further commentary?

The Clerk.

CLERK: I think that makes sense, yes. This is a bit awkward. It should be somewhat independent. That is a possible way of approaching it.

MR. SPEAKER: If the Compensation Review Committee wants to use some guideline or some base that fits the ministers or somebody else than that should be fine.

Mr. Parsons.

MR. KELVIN PARSONS: The only comment I would make is that it would seem to leave it wide open and the review committee would of course be able to deal with it accordingly. So we have already seen from our first Members’ Compensation Review Committee that even when it was enshrined in legislation as to how something was supposed to happen, as the MHAs thing was enshrined by Justice Green, the committee disregarded it. So if they are going to disregard what was already enshrined in legislation anyway, we might as well not do anything to complicate it for them and leave it wide open for them in the first place.

MR. SPEAKER: Further commentary?

If not, then we can note that in our recommendations and suggestions and carry it to Legislative Counsel from the members’ committee, from the Commission. The next item on the agenda -

The Clerk.

CLERK: Well just for clarity, because we will have the Law Clerk work with Legislative Counsel on this. Was Minister Burke’s recommendation - it was just a suggestion, so we will leave it at that stage. I know Minister Burke spoke to it, Mr. Parsons against it. So is it a suggestion for -

MR. SPEAKER: No, my understanding is that there was an agreement. I sensed agreement by all members and I did not think we needed to have a motion for everything that is stated but it is the recommendation from the committee here that we change, we take out the word ministers –

CLERK: Okay, yes.

MR. SPEAKER: - and while that can be the guideline now, we should not tie it in forever and a day to what some other party is getting with automobile allowance and let the Commission, disappointed from here on in, set forward the rates.

CLERK: Yes.

MR. SPEAKER: Ms Burke.

MS BURKE: Yes. My intention was, I guess, and whether we needed to put it in a motion or not, was that if we agreed to this automobile allowance, that we set it at today’s rate which is tied to the ministers’ rate or whatever. So that is fair enough.

I guess the only thing I wanted to say is that at this point forward it is an allowance paid through the House of Assembly and whether or not that ever gets increased or decreased should be tied to the way we review any types of expenditures or allowances in the House. That is my point, as opposed to taking one little part out and tying it to another system. It may always parallel, it may not, but that should not be our issue from this point on.

MR. SPEAKER: Ms Michael, to that same topic?

MS MICHAEL: Just to say that I think it should be a motion and voted on because everything else – I think it is important that it be a motion, with the understanding that Legislative Counsel will take care of the proper wording.

MR. SPEAKER: Sure, and we can do that.

The motion was made by Ms Burke, seconded by Ms Michael.

I think the Clerk has an understanding there –

CLERK: Yes.

MR. SPEAKER: - rather than me trying to muddle it again, what the intent and the spirit of the motion is.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

The Clerk.

CLERK: The only thing left then, and it is not a numbered one, is the retrospective application of this. What we have been talking about is go forward. We had not done any amendment to whether this would apply back to June 14, 2007. The Commission would have to confirm whether they want that done or not.

MR. SPEAKER: Here, again, this was a topic that was brought forward and we looked at ways of dealing with what we thought was a wrong, I guess, representation that was made back to the Department of Justice. We went back looking for the legal opinion, we could never get it. We talked about ways of getting the opinion and we talked about introducing estoppel in order to deal with this recommendation.

What is here today is that we bring this consideration for the automobile allowance, to have it retrospective back to June 14, which was the day that it was taken from the three parties that I am talking about: the Speaker, the Leader of the Opposition, the Leader of the Third Party. So it is open for comments, suggestions, recommendations.

Mr. Parsons.

MR. KELVIN PARSONS: Just for clarification, maybe I ought not to have said it earlier but I am certain that when you read back to me two motions ago about referring it to the legislative draftsmen, for example, the three positions. You referenced the fact that it would be effective in 2007, and that is what I moved my motion on, based on you having that in there. Now, if you want to go through it again, no problem, but I would reiterate I believe there should be a fixed date in there back to 2007. We have dealt with it six, seven times here at this committee. We all try to get information and legal opinions from the Comptroller General as to how this issue arose and why we should or should not apply estoppel, or with discussions about should we go get our own legal opinions and so on.

The bottom line is these people, these three positions, have been receiving this allowance based upon what they have done here traditionally for years and years and years, which was tied to the minsters’ salaries. The Comptroller General raised this issue based on his understanding of non-taxable or taxable allowances. I think it is just a confusing matter as we have proven here time and time again. Beside that, I do believe the principle of estoppel would apply and therefore why are we going to muddy the waters further, let’s make it effective back to when it was. I realize retrospectivity in a piece of legislation is unusual, but I think we have very unusual circumstances here, and I think we need to put this behind us and make it effective going back to 2007.

MR. SPEAKER: Further commentary?

Ms Burke.

MS BURKE: If it goes back to 2007, I guess my question is: Up to this point, the people who are affected by the car allowance, what have they been claiming and is it possible to go back and do the adjustments that are necessary?

MR. SPEAKER: The Clerk.

CLERK: Yes, it is, as I understand it, because I am not dealing with all of these matters, they are more in Corporate Members’ Services. The three individuals had the auto allowance for the first year and that would have gone back to October 2007. It would have been some time in the fall of 2008, I think, that the Comptroller General decided they could no longer have it. I may be wrong on the dates.

If the matter is resolved in this current calendar year, because this is a taxable matter, a calendar year issue, the Comptroller General says he can resolve any outstanding matters before December 31, so it will be solved in this tax year. If it goes into another year, then there are other issues that need to be addressed and so on.

MR. SPEAKER: Ms Burke.

MS BURKE: I have another question on it now too. I guess, based on this motion we put forward here this evening, we have not allowed those three office holders to opt out of the car allowance. I know we can; that is the point I am trying to make here now. I think, as we worded the motion, we just said that they would receive it. Right?

CLERK: We may have. We certainly did not intend that. There was the option.

MS BURKE: I guess we have to be clear here now once we make the changes on a go-forward basis; this is the law and this is the way you do it. Right now the policy to ministers – and we are trying to get away from doing that tie-in – would be you take the car allowance of the $8,000 which is taxable, so I think it comes out to $5,800, and then you can claim your gas receipts.

You cannot claim mileage, nor can you claim mileage even if you are out doing MHA work in your district. You claim your fuel, your gas, into your department because you cannot come under two systems. So, if we go back to 2007, it would have to be clear that you fall under one of the two categories, but on a go-forward basis, I guess my question is: Are we going to set it in legislation that the three officer holders get the car allowance and therefore can only claim fuel, or are we giving them the option of not accepting the car allowance and claiming mileage? You cannot do both and you cannot claim fuel if you are doing Leader of the Opposition business and then you are up in your district doing district work and you are going to claim your mileage. You are only on one system or the other.

MR. SPEAKER: The Clerk.

CLERK: The intention would certainly be to have the option that ministers have because right now, of course, mileage is accepted, and that is what those three office holders are doing because of the Comptroller General’s ruling respecting non-accountable. So the intention would simply be that they would have that option to select one or the other, yes. So we have to be careful, if we did amendments, that we did not box them in to one or the other.

MS MICHAEL: (Inaudible).

CLERK: I am sorry, Ms Michael, (inaudible).

With respect to cleaning up these matters, yes, they could be done during the current year. There might be little complexities if, in fact, members who, following the Comptroller General’s determination had to switch to mileage even though they had wanted to stay with the auto allowance, there may be some calculations between the Comptroller General’s office, our Corporate Members’ Services division and the individual office holder which would have to be done, but I do not think that is insurmountable, that could be done by the end of the calendar year I am sure.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Just for the record, as a further answer to Ms Burke’s question, and for the sake of the public too who may be listening to us and questioning.

When, for example, we were notified that we could no longer have the allowance and we had to go to the kilometrage system, if we had received the allowance, there was a deduction made and we had to pay back anything up to June 14, 2007 under the allowance. We had to figure out the kilometrages and we got paid for the kilometrages we covered from June 14, 2007 on them, and we had to pay back anything that was over and above that. So, just in case people are wondering - I see the same thing happening now that if we get the allowance retroactively then we are going to have to subtract from that anything that we received for kilometrage. So we are going to have to reverse what we have done except for a longer period of time. So, we did not and we will not be getting the money twice during this transition. That will not happen.

I just think I wanted to make that clarification so it is clear for all of us.

MR. SPEAKER: Further commentary?

Mr. Parsons, I think that your recommendation has to be a little cleaner because what you recommended and what I read into the record was almost like from the present time, putting forward an allowance from the present time on a go-forward basis that was payable in 2007. I think I have written it here, if you want to address it in this way we can just change your motion and have it read: The necessary steps should be undertaken to confirm the automobile allowance that was in place for the Office of the Speaker of the House of Assembly, the Leader of the Opposition and the Leader of the Third Party retrospective to June 14, 2007.

I ask the Clerk is that clear?

CLERK: I have it, yes. If that is the Commission’s wish.

MR. SPEAKER: If that is the Commission’s wish. Do you want to make that a motion Mr. Parsons?

MR. KELVIN PARSONS: So moved.

MR. SPEAKER: Seconded by Mr. Kennedy.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

The next item on the agenda is Members’ Compensation Review Committee again, recommendations on pensions.

This is a place where I do not think you will find anybody here at this table that has a lot of knowledge and a lot of information that they can provide members, so we have asked Ms Maureen McCarthy, the director of pensions, if she would be kind enough to attend the meeting and answer members questions, if they have any concerns regarding what the recommendations were and what they would mean on a go-forward basis with members’ pensions.

If members want to, we can just take a look at the possible legislative amendments that we have put forward here. Ms McCarthy will be joining us and she will inform us as to what the recommendations are. The three pension plans that we currently have once we adapt this particular pension plan - because we have one pension plan now that is probably into effect for members elected 1999 and prior, then we have another pension plan for members elected since some date after 1999 up to the acceptance of those recommendations, if we accept them, and then we will have the third recommendation and a third pension plan to deal with what the Members’ Compensation Review Committee have put forward here.

I certainly welcome Ms McCarthy. Thank you for making yourself available this afternoon so that you can provide us with some information and answer some of the questions that we find ourselves challenged to answer. I will ask the Clerk to do an introduction and then we can ask and make recommendations and amendments from a go forward.

CLERK: Yes, thank you, Mr. Speaker.

I think many of you would know Maureen McCarthy. She is the Director of the Pensions Division in the Department of Finance. She has been around a number of years; as young as she is, she has been around a number of years in that role.

We had a general note, which is essentially similar to the note we had on salaries, just outlining the process for the Commission to accept or modify these recommendations on pensions. I will not review all that matter but if you turn to the long bullet on the second page of the note, this is a matter that got some discussion at the November 18 meeting in terms of the accrual rate. I will confess my ignorance of pension plans right off, that I had to go to Maureen for an explanation.

The question you will remember was: If a salary is being defined as 81 per cent of the actual and the accrual rate is 5 per cent, well why don’t we simply call the accrual rate 4 per cent of the 100 per cent actual and you come up with the same dollar amount? So in my ignorance I posed that to Maureen and she explained the issue to me, as I have outlined in the note, that some of the components of compensation are still at 100 per cent. It is only the top-up of the basic salary that got caught by that 81 per cent piece. That was just a matter that was discussed at the November 18 meeting.

When we come to the recommendations on proposed amendments, this gets quite technical. I think our Law Clerk, Ms Proudfoot, dealt with Maureen and perhaps the lawyer who advises Pensions Division as well. I do not know, Mr. Speaker, if I am willing to even attempt to explain these amendments. Perhaps it is better to look at the Members’ Compensation Review Committee recommendations 1, 2 and 3. Then, if the Commission has questions on it – essentially, their recommendations are tied to the numbered proposed amendments 1, 2 and 3 which follow on the subsequent pages.

Perhaps a better approach is for the Commission to ask Ms McCarthy questions rather than us trying to go through every line of the proposed amendments.

MR. SPEAKER: Do members of the Commission have questions that are needed for clarification or the proposed amendments, again, as we put forward? It is just proposals, members can certainly recommend changes and have it voted. We now open the floor for anybody who might have a question or have a suggestion.

Ms Marshall.

MS E. MARSHALL: Mr. Speaker, thank you.

Ms McCarthy, when we met last time on pensions, I was interested in getting some examples worked up and these have been provided to us. One of the things that struck me is that under certain circumstances, members who are on the new proposed plan could end up with a bigger pension than people under the old plan, which was considered quite a good plan. I know the reason for it is because we are not using the 81.2 per cent for the salary, we are not rolling the salary down. Could you just explain? Why would you not do that? Why would you not use the 81.2 per cent for people who are going to come in under the new plan?

MR. SPEAKER: Ms McCarthy.

MS MCCARTHY: Basically, I guess in the proposal we did not impose the cap on any new members that would be elected because it was premised on the fact that once they come in, they are new members, they will contribute 9 per cent on their salary right from their first date of election and therefore their benefit will be calculated based on the full accrual and full salary.

MS E. MARSHALL: Okay.

MS MCCARTHY: I guess the issue is that the members who have the cap, in their earlier years when they were contributing, they were actually contributing 9 per cent on a lower salary. So that is why Green kind of imposed – that was one of the reasons Green imposed the limit, so that you would kind of keep everything in sync, the contributions. The salaries in which they contributed would be consistent throughout their career.

MS E. MARSHALL: Yes.

MS MCCARTHY: We thought this is a new plan, starting off fresh, so we would use the 100 per cent.

MR. SPEAKER: Ms Marshall.

MS E. MARSHALL: The only thing is it does not seem equitable now in that – that poses the question then: Why can’t existing members pay the higher premium and then avail of the higher benefit, which will be available to new members coming in after say, December 31 or whenever the amendment goes through?

I even wonder whether the review committee was aware that this was an implication of their recommendation, because as a member of the Commission, some time in the future people are going to look back at this and say some members are now receiving a pension higher than what they would have received under the old plan, and they are going to say there goes the Commission members again trying to beef up their compensation.

I was very concerned when I looked at it and saw that members who are not sitting in the House right now but will be elected at some future point in time, will put in an equivalent number of years of service as existing members, yet walked out with a bigger pension. So that seems to be inequitable to me.

MR. SPEAKER: Ms McCarthy.

MS MCCARTHY: Well, I guess that is the feature of the way we set up the calculation, but I guess it is up to the Commission if they want to address the issue, either from an accrual rate or putting a cap on the salaries for new members as to what would be considered pensionable.

MR. SPEAKER: Ms Burke.

MS BURKE: I guess one of my comments, if I am reading this right, is that as much as we can say there are situations now where there may be a higher pension based on the new formula, we also have the stipulation – and correct me if I am not, because obviously there is a lot of detail of this – where anyone who comes under the plan, if we approve it, which has been recommended now by the Review Commission, no one would be able to collect a pension until fifty-five.

MS MCCARTHY: That is correct.

MS BURKE: So, if we look at some of the scenarios that were worked up here, and somebody had sixteen years service and their pension could potentially be just below $53,000 on the old plan but $56,000 on the new plan, and you look at it and you think well, the new plan is doing more lucrative, which it is, but the person collecting the $52,700 under the old plan would have eleven years to collect it, so in essence would be almost $600,000 ahead than the new plan. Now if they are the same age it makes a difference, but I guess I was looking at the age difference and seeing that it may be more at one point but if you have to wait five or ten years to collect it, it is not.

MS MCCARTHY: Yes.

MR. SPEAKER: Further commentary?

Ms Marshall.

MS E. MARSHALL: Yes, perhaps I can just speak to that point that Ms Burke raised, that is true. It depends on the situation. You could have a situation where we just had two members, two newly elected members, so, of course, they are grandfathered in under the existing plan. So they could be here for the next twenty years. We could have a by-election – say if the amendment goes through as of December 31, we could have somebody coming into the House of Assembly in a by-election say, mid-January and they be here for twenty years. Even though there is a months difference as to when they retire, if they are both over the age of fifty-five one will walk out with a pension, I think of about $60,000, and the other one will walk out with a pension of about $70,000. It just seems inequitable, but the point I would like to make is the reason why I wanted to see some examples is that I want to make sure that we realize the implications of what we are approving so that we approve it with open eyes, so that five years down the road we do not see a newspaper article saying the Commission that was in place five years ago approved a pension plan which, in some cases, is more beneficial than what was provided for under the old plan.

MR. SPEAKER: Further commentary?

Ms Burke.

MS BURKE: I agree with what Ms Marshall is saying, but I still see it as the biggest difference - I know the rates that we pay on and the cap and whatever, but I still see the biggest fundamental difference here is the age because it has changed. To me, right now the years of service and that number, I guess, the sixty that you have to meet, you can get that - you can collect a pension here now in your forties or thirties, I suppose, really, any age. Under the new plan, that is at fifty-five, so if it is a bit more lucrative at that end, you are still not going to collect it until you are fifty-five, so there still could be years where you do not collect a pension, but it is stopped until you are fifty-five; that is where I see the big difference.

MR. SPEAKER: Well, even in the examples shown there under the old plan and the new plan, and we are looking at somebody with sixteen years as an elected member; they are going to have to wait eleven years before they can access their pension without a penalty. If they draw it at fifty then they are going to have a 30 per cent reduction in their pension. So, in order to get the full amount, they would have to reach the age of fifty-five and have served in two General Assemblies. So, there are eleven years there that they will be either without a pension or a much reduced pension than what is shown here.

Ms Burke.

MS BURKE: Yes, I think it is important to note, almost every individual who comes through this House of Assembly based on the years that they have been here and based on their age is going to determine what pension they receive. So it is not likely that you are going to get a lot of people – well, I guess if you come in the same General Election and you go out at the same time, you would.

When we look at this, and when you look at that last one as number three, and you would say: Well, do you know what? The new plan is more lucrative. The new plan is more lucrative if you hit what Ms Marshall said; you have two people who were elected, one now who just got in before the changes and one after and they retire at the same day, well it is going to be difficult for us never to have that inequity when we change a pension plan. The person the day before the changes and the person the day after the changes are going to have different circumstances just by virtue of the change.

When we look at those numbers and we say it is more lucrative under the new plan, unless those people are absolutely equal on the time they come in or very close in the days and their ages, it is not, because the person on the old plan would be in a better position.

I probably make no more sense now than the notes we got on that.

MR. SPEAKER: Further commentary? Questions?

Ms Michael with a question.

MS MICHAEL: Well, my question is to you, Mr. Speaker. We do not have to vote on this tonight, do we? I do not feel ready to vote on this.

MR. SPEAKER: No, it is certainly not. The two people that just were elected, the Member for The Straits & White Bay North and the Member Elect for Terra Nova, I would think if the members are sworn in before the end of the present session, they would fall then under the old pension plan that we have. This would only be on a go-forward basis. If there is a by-election or somebody who would be elected after a time, we bring those rules into effect.

If members want to study those plans and the Commission has every right to make changes or to lower what was put forward, we certainly cannot raise it, but members have every right to change it. If they want to take and study the pension proposals here further, we can certainly delay it until another meeting. That is not a problem at all and it would not interfere with anything that we have appearing on our agenda or affect anybody who is presently elected at this present time.

The Clerk.

CLERK: Yes, thank you, Mr. Speaker.

I do not know that this is an urgent matter, but in the context of by-elections, if we do not do something in the near future then we are probably doing the amendments in the spring. I do not know if we would get it done before Christmas given we only have a couple of weeks, really.

MR. SPEAKER: Ms Burke.

MS BURKE: I think we put this out to a review commission to take away the perception that we are sitting here padding our pockets and making decisions to affect ourselves. Now we just accepted the recommendation on the salary and now we are looking at the pensions. I think that if we want to start taking this and looking at it and determining how this compares to the old one and how people are going to benefit down the road, is that going to change our decision here? At some point someone is going to benefit from a pension plan when they hit a certain age and they have a certain number of years in.

I am just far more comfortable to say: Look, we have put this out to a review commission, they have reviewed it, and they came back with this recommendation. I just as soon that we accept it for what it is and move on. If members in the future have issues with it, there is going to be more review commissions, there is going to be one within the first six months of our next General Assembly; there is going to be one in every General Assembly from this point on. I think we have a decision here to make now that this is the recommendation that is put forward. Do we accept it or not?

MR. SPEAKER: If members are prepared to make the recommendations tonight, we are certainly within our prerogative to do that.

Mr. Parsons.

MR. KELVIN PARSONS: Yes, Mr. Speaker, I would certainly agree with that submission. This is probably one of the few things that the Commission did that I thought they actually did something outright. Everything else they seemed to have fudged a bit on some of the other recommendations, and I told them so at our November 18 meeting. This is one I think they actually did and were very affirmative about it, and I think we should take what they said and implement it. The whole purpose of this exercise is, if this is not right, there is always going to be another review commission which can deal with it and change it if they wish.

MR. SPEAKER: If members agree that we should put forward the recommendations now, we will vote on them and move forward.

Okay, what we will do is we have a number of proposed amendments here, and I think it is important that I read them and we will get a vote on them. I think we should do that for clarification. So it is based on the recommendations, the proposed amendments are that came from the House of Assembly Members’ Compensation Review Committee.

So without further ado, the proposed amendments, "Paragraph 2(1)(g) of the Members of the House of Assembly Retiring Allowances Act is repealed and the following substituted:

"(g) "MHA salary" means

"(i) for members elected before the 46th General Assembly

"(A) the salary authorized by the Legislature to be paid to an MHA up to June 30, 2007,

"(B) with respect to time served as a member after June 30, 2007, 81.2% of the salary to be paid to an MHA under subsection 11(1) of the House of Assembly Accountability, Integrity and Administration Act as may be varied by that Act, and

"(C) an amount that the Minister of Finance may prescribe in a directive under this Act,

"(ii) for members elected for the first time to the 46th General Assembly before January 1, 2010

"(A) with respect to time served as a member after June 30, 2007, 81.2% of the salary to be paid to an MHA under subsection 11(1) of the House of Assembly Accountability, Integrity and Administration Act as may be varied by that Act, and

"(B) an amount that the Minister of Finance may prescribe in a directive under this Act, and

"(iii) for members elected for the first time after December 31, 2009

"(A) the salary authorized to be paid to an MHA under subsection 11(1) of the House of Assembly Accountability, Integrity and Administration Act as may be varied by that Act, and

"(B) an amount that the Minister of Finance may prescribe in a directive under this Act;"

Do members want me to continue and vote them all in together?

"2. Section 19 of the Act is amended by adding immediately after subsection (2) the following: (2.1) Notwithstanding subsections (1) and (2), a vested member elected after December 31, 2009 who is no longer an MHA or a minister may, on application, receive a supplementary allowance if

"(a) the member has paid the contributions for service required under this Act; and

"(b) the member has reached the age of 55 years.

"(2.2) Notwithstanding subsection (2.1), a vested member elected after December 31, 2009 who is no longer an MHA or a minister may, on application, receive a reduced supplementary allowance calculated in accordance with subsection 20(2.2) if

"(a) the member has paid the contributions for service required under the Act; and

"(b) the member has reached the age of 50 years.

"3. Section 20 of the Act is amended by adding immediately after subsection (2) the following:

"(2.1) Notwithstanding subsection (2), the annual amount of the supplementary allowance paid to a member who first served as an MHA or minister after December 31, 2009 shall be calculated by adding the following amounts:

"(a) for each year of MHA service, 3.5 % of his or her base MHA salary;

"(b) for each year of minister’s service, 3.5% of his or her base minister’s salary; and

"(c) for each year of other service, 2% of his or her base MHA salary.

"(2.2) For the purposes of subsection 19(2.2), the retiring allowance awarded under subsection (2.1) shall be reduced by 6 % for each year that the member’s age is less than the age of 55 years."

Do not ask me any questions because I read a proposal that was put forward and I know about as much about this as most other members. It is my understanding that the Clerk has talked with Legislative Counsel, and our Law Clerk has been involved in this, and those are recommendations that will be submitted to Legislative Counsel to put it in proper wording to be brought back to the House of Assembly.

Ms Burke.

MS BURKE: Just for clarity, I guess, and the simplest terms we can do it is, what you just read out is reflective of the fact that the present MHAs’ salary remains in effect for anybody who is presently elected. However, the new formula, as recommended by the Review Commission, will come into effect for anyone elected after the end of this year.

MR. SPEAKER: Not MHAs salaries, MHAs pensions.

MS BURKE: Pensions.

MR. SPEAKER: Yes, you are correct.

Are there any other questions? If not, a motion is in order.

Can somebody make a motion that we make those recommendations to Legislative Counsel, to Cabinet, to bring back to the House of Assembly changes to the Pensions Act?

Made by Ms Burke, seconded by Ms Michael.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, 'nay'.

The motion is carried.

I have one other request. Normally, when we make those changes as it relates to salaries and benefits, I think the act states that we must allow two days before we allow any activity to take place in order to set about bringing the recommendations forward. I guess the two days are put forward in order to allow members to have second thoughts. Judging by the limited time that we have in order to get this to Cabinet, to get it to Legislative Counsel to change the act, to get it back to the House of Assembly, with members permission we will waive the two-day notice and we will do this in the a.m. Do members agree to that particular –

Agreed.

With that being said, I thank members and I thank the House of Assembly staff. I thank Ms McCarthy for attending this meeting tonight. I do not know if the Clerk has anything further to add. He is indicating –

CLERK: (Inaudible).

MR. SPEAKER: Yes, the only thing I guess we can do with another meeting is we will again poll the members as we have in the past rather than having everybody look at their calendars to see, because we have allowances to deal with and that is going to take a while. We have a meeting with Mr. Joe O’Neill on Friday morning in response to the recommendations that came from the Commission and look for clarification. So, we will be polling the members to see if we can get another meeting, because while we have gone and we have brought about the changes here, members should also be aware that some members are still disadvantaged in being able to receive a living allowance that was clearly put forward by the Members’ Compensation Review Committee. They are still operating as they have in the past. Now we are going to see a rollback in the members’ wages and I think it is important that we try to meet again in order to bring some resolve to the recommendations where members will be able to access overnight accommodations in the ways as put forward by the committee. I ask members, when we do poll them, that they would try to make a special effort to deal with that particular situation.

I thank members; I thank the staff.

This meeting is now adjourned.