November 18, 2009      HOUSE OF ASSEMBLY MANAGEMENT COMMISSION    No. 22


The Commission met at 9:00 a.m. in the House of Assembly.

MR. SPEAKER (Fitzgerald): Good morning.

Again, welcome to a regular meeting of the members’ Management Commission. My name is Roger Fitzgerald, Chair of the Management Commission by virtue of being the Speaker. We will start off, to my immediate left, with the introduction of other members present.

MR. T. OSBORNE: Tom Osborne, MHA, St. John’s South.

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

MS E. MARSHALL: Beth Marshall, MHA, Topsail.

MR. KELVIN PARSONS: Kelvin Parsons, MHA, Burgeo & LaPoile, and Opposition House Leader.

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

MS KEEFE: Marie Keefe, Clerk’s Office.

MR. MACKENZIE: Bill MacKenzie, Clerk.

MS LAMBE: Marlene Lambe, Chief Financial Officer.

MR. SPEAKER: I thank members for being present this morning.

The agenda is not a long one. The first item on the agenda will be the approval of minutes from the November 4 Management Commission meeting. Before we ask members to approve the minutes as written, I would like to recognize the Minister of Health and Community Services, Mr. Jerome Kennedy, who has joined us as well.

Members have had an opportunity to read a copy of the minutes as written for the November 4, 2009 meeting. If there are no errors or omissions, would somebody move that the minutes be adopted as written?

Ms Michael.

MS MICHAEL: So moved.

MR. SPEAKER: It is moved by Ms Michael, seconded by Mr. Kennedy, that the minutes of the November 4, 2009 meeting be adopted.

All those in favour, 'aye'.

SOME HON. MEMBERS: Aye.

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

The motion is carried.

On motion, minutes adopted as circulated.

MR. SPEAKER: The first item on the agenda is the request from Mr. Fraser March regarding payment of legal fees. I will not go into the history of this specific request. As members know, and the viewing audience would know, this has been on the agenda for a while now.

At the last meeting of November 4, the Commission deferred a decision respecting a request from Mr. Fraser March for payment of legal fees pending a receipt of Justice O’Neill’s perspective as to what extent Mr. March is expected to engage in the present review that is ongoing. There was a correspondence from the Clerk to Justice O’Neill. Justice O’Neill pretty well indicated that it should be up to Mr. March to ask for legal representation if he thought he needed it, and it would be up to the Commission to either approve or not approve that particular request.

As members know, the request has come forward. I will ask members now, in light of the information that has been provided, if they are willing to take part in further discussion on this particular issue or make a motion to the effect of the request put forward by Mr. March.

Commentary?

Mr. Kennedy.

MR. KENNEDY: Yes, Mr. Speaker, I have thought about this and reviewed it. I am willing to support Mr. March’s request, up to a certain amount.

I say this for the following reasons, Mr. Speaker. It was a decision of us, government, the House management committee, to give Mr. March an opportunity to be heard. In fact, we ordered this review. Mr. March then came to us and made a request in advance seeking legal counsel and outlining his reasons why. We went back to him and said: Well, can you give us an estimate of the legal fees? He came back with an estimate of the legal fees, having regard to the fact that the lawyers involved could not outline totally what it was they could be expected to do. However, they gave a good estimate. The estimate, Mr. Speaker, was in line with what I know is paid in legal fees. We then get a letter from the judge, the retired justice doing the review, Justice O’Neill, outlining his opinion, which essentially should be up to Mr. March.

So, having regard to the steps that have been taken, Mr. Speaker, we should be in line with any policy, if we were to adopt a policy. What I would suggest, having regard to this matter, is that legal fees be covered up to a certain amount. I am willing to suggest the amount of $20,000. It seems to me that based upon everything I have read here, that would allow for whoever does the work. On legal fees, if Mr. Earle would be eighty hours at $250 an hour, the combination of Mr. Earle and the junior counsel would certainly allow, I suggest, enough time. So that would be my opinion on this matter.

MR. SPEAKER: Further commentary?

Ms Michael.

MS MICHAEL: Thank you, Mr. Speaker.

For all the reasons outlined by Mr. Kennedy – and I will not repeat them all because I think I put most of those on record the last time we met – I, too, would agree with the legal fees. It is difficult making the decision about the amount, and yet I do think that there has to be a limit. The $20,000 suggested by Mr. Kennedy sounds reasonable to me, again, based on having read everything very carefully and also sought advice of other people who know these issues as well.

So I would agree with approving the legal fees and I agree with the amount of $20,000.

MR. SPEAKER: Further commentary?

Ms Marshall.

MS E. MARSHALL: Yes, Mr. Speaker, I discussed this at the last meeting when we discussed this issue. I indicated that I would not be supporting any motion to pay legal fees. I have not changed my mind, Mr. Speaker. I will not be supporting it.

Mr. March had requested an independent review, and we had agreed to that. There was never any indication that there would be legal fees; that he would be coming back asking the public purse to pay for legal fees. I did read the material that was provided by Justice O’Neill, and I would just like to conclude by saying I won’t be supporting a motion to pay the legal fees.

MR. SPEAKER: Further commentary?

The motion, as I understand it, that is being put forward by Mr. Kennedy is that the Commission approve Mr. March’s request for legal fees up to a maximum of $20,000 to take part in the O’Neill review, seconded by Ms Michael.

All those in favour of the recommendation?

SOME HON. MEMBERS: Aye.

MR. SPEAKER: Those against?

The motion is carried.

The next item on the agenda is to invite the Members’ Compensation Review Committee to the table to give members of the Commission an opportunity to ask questions and to further understand some recommendations as put forward by that particular committee.

As members know, this particular committee is struck by legislation in the House of Assembly Accountability and Integrity Act, which states that such a committee shall be struck once during each General Assembly.

The Compensation Review Committee has been appointed and has reported. The report has been made public. Members have had an opportunity to review the report and we are fortunate enough to have the Compensation Review Committee present this morning. They will entertain questions from the Management Commission regarding the report as provided.

So we will now take a quick recess to allow the Members’ Compensation Review Committee to make themselves present here, in the Chamber, and we will resume with questioning and information session in five minutes.

This meeting is now recessed.

Recess

MR. SPEAKER (Fitzgerald): The meeting will now reconvene and I certainly welcome the Members’ Compensation Review Committee here this morning: Mr. Joe O’Neill, Ms Cathy Bennett and Mr. Brian Barry.

The format of the meeting will be that we will ask Mr. O’Neill, who is the Chair of the committee, to make a couple of brief opening remarks and then maybe what we will do is take each recommendation individually and ask the Chair or a member of the committee to give an explanation where the recommendation came from, and the reason for the recommendation, and then we will allow each member of the Commission an opportunity to ask questions or seek clarification. That way we can keep it at one recommendation at a time and when we move away then we know that we are finished with that particular recommendation.

Welcome Mr. O’Neill, Ms Bennett and Mr. Barry. I will now turn the commentary over to Mr. Joe O’Neill, Chair of the Members’ Compensation Review Committee.

Mr. O’Neill.

MR. O’NEILL: Thank you very much, Mr. Speaker.

Good morning hon. members of the Management Commission and the staff of the House of Assembly service.

Before we start, I, on behalf of Cathy and Brian, want to express a thank you to you for asking us to take on this inquiry and I also want to - I think we would be remiss, Mr. Speaker, if we did not express our gratitude to the staff of the House of Assembly service. When we started this inquiry back in July, the issues before of us, obviously, were fairly new to us, and it was only with the support and the help of the House of Assembly staff and the service that – it was very beneficial to us. They were available for us at all times, any time we needed them. Any time we wanted anything, we were provided it. So I just want to go on the record, Mr. Speaker, as expressing our gratitude to the House of Assembly staff and the House of Assembly service for helping us conduct this inquiry and prepare our report.

I certainly would invite my colleagues, Brian and Cathy, to make any commentary they would like to make with regard to the report and the recommendations made in it. It was a committee of three and, no doubt, we had some lively discussion at times, but I certainly appreciated the assistance of Brian and Cathy throughout the whole process of the report and certainly welcome any commentary they would like to make on any of the recommendations.

So, Mr. Speaker, if you wish, we can go right into the very first recommendation on salaries. I will make a very brief commentary, and then if Cathy and Brian wish to add, they can certainly do that and certainly be prepared to answer any questions or make any clarifications.

On the first recommendation, we did recommend that the 8 per cent salary increase that was accorded to the Members of the House of Assembly as of July 1, 2009 be relinquished, and that the salary for an MHA on a go-forward basis be the salary that was in place as of June 30, 2009.

Mr. Speaker, in our lead into that recommendation there were a number of issues that the committee examined: the issue around the comparison of current level of salaries of MHAs with colleagues across the country, the salaries with respect to comparisons to the senior public service, the timing of the 8 per cent increase on the first of July, the fact that in the Green report in 2007 the notion of tying MHA salary increments to the public service was proposed as an interim measure. So, when you look at those issues, we examined it in great detail, and I do not mind saying, Mr. Speaker, that this is a recommendation that, as a committee, we did not make lightly. It was a difficult issue for us; however, at the end of the day, as a committee, we decided that, based on what we had reviewed and what we had heard in the public presentations that we would recommend that the 8 per cent salary increase be relinquished.

MR. SPEAKER: Commentary? Questions? Anybody with any questions regarding recommendation number 1?

The recommendations can be found on page 43 of the report. They are laid out quite easy to follow there, and if members want to refer to that with some commentary or explanation, it is certainly welcome at this time.

Ms Bennett.

MS BENNETT: I just want to add to Joe’s comments around the process that we took to actually undertake deliberating around the recommendations. Coming out of the Green report and being the first independent committee that was established, we thought it was extremely important that the process of listening to the public, as well as doing some really in-depth research, was followed. To give confidence to the integrity of an independent committee, we thought it was very important that we put a lot of time and effort in making sure that we gathered enough facts and did a good comparison, but also were able to represent what we heard in our public hearings as well as the written submissions and the numerous phone calls and e-mails that the committee received as well. It is important for people to believe that this is the way it is going to happen from now on.

MR. SPEAKER: Further commentary?

Ms Burke.

MS BURKE: I guess I want to comment on that 8 per cent increase, because since the election in 2007 we were required to have the committee review compensation and salaries. The formula was put in place and we struck the committee all at the same time it was coming together. I, for one, did not even understand that the 8 per cent was coming in as we were doing this particular review. I think the public perception may be that we probably held off on the committee until we had our 8 per cent in place.

What is really disappointing, I think, is the fact that I would have liked to have been notified, as an MHA, that the 8 per cent was due to come in at the same time the review was going on, so we could have looked at it independently until we had the committee report; because I really do not like the suggestion - or commentary, I guess - that I have heard, that we probably knew the 8 per cent was coming and held off on our committee until that time. So we had it, and it kind of made your decisions almost null and void as you went forward.

So, just for the public record, I was really disappointed that we did not have an opportunity to address the 8 per cent prior to striking the committee or that it all kind of happened the one time. I would have preferred, even if the 8 per cent was going to proceed - and I suppose it can if we vote this down. We are looking at the recommendations today, but I would have liked to have that at least postponed until we had the report back from the committee.

MR. SPEAKER: Further commentary?

Ms Michael.

MS MICHAEL: It is more of a question, and I think I am asking it from the perspective of looking to the next committee, when the next committee is struck, because you have left decisions around formulas, et cetera, with regard to salary to the next committee.

I notice in your report, you do have a jurisdictional comparison of members’ salaries right across the country. Did you also find a comparison - because I do not think there is one attached to the report - with regard to formulas for annual adjustments, or adjustment period, to pass on as information to the next committee, or do we just assume they will have to start from scratch on that?

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: In terms of annual adjustments for MHA and MLA salaries, Ms Michael? Yes, we did.

There are a number of different ways it is done across the country. Some jurisdictions tie it to the CPI. They do an annual CPI. Ontario, for example, ties it to the federal House of Commons salaries. It is 15 per cent less. So as the House of Commons’ salary goes up, so does the Ontario MLAs. Some tie it to the average industrial wage for the province; some tie it to the average of the MLAs across the country. There are a number of ways I think that it can be looked at, and I know we are probably getting down into the next recommendation, but the reason we recommended that the salaries remain in place for, in our view, the next two years, and then the next Members’ Compensation Review Committee be appointed within two years, is then that will give an opportunity for the next Members’ Compensation Review Committee to look at all of those models, look at where the salary levels are at that time in comparison to other MLAs across the country.

As you certainly are aware of, in the Green report, and I guess going back to my days in the bureaucracy, when we look at comparisons across the country, while you look at the whole country, you tend to narrow in then on the more alike jurisdictions, like the Prairie Provinces - Saskatchewan, Manitoba - and the Atlantic region. So we thought it is best for the next Members’ Compensation Review Committee to have that opportunity following their work, or as a part of their work, to look at the formulas for potential increases and how that may be adjusted on a go-forward basis.

MR. SPEAKER: The Clerk.

CLERK: Thank you, Mr. Speaker.

Just a few follow-up comments from Minister Burke’s comments, in case the public was confused by this whole issue of the 8 per cent increase. I suppose it was unfortunate that became effective July 1, while the committee was conducting its hearings.

The public should understand that Derek Green established the salary, in law, and that became effective July 1, 2007. He also established, in law, the adjustment formula, which was that MHAs would receive the same percentage increase that the public service received, but there would be a time lag of one year. In fact, the salary was established in the accountability act as of July 1, 2007. July 1, 2008, the 3 per cent increase, which had been applied to the public service the previous year, was applied. Now, in 2009, when the committee was working with the one year time delay, this was the 8 per cent that the public service got a year earlier, and if the amending formula were not to be adjusted, MHAs would get 4 per cent next year and the next year and the next, which is the same agreement that was negotiated with the public service.

So Green put that in as a temporary measure. Traditionally, for the last couple of decades, the adjustment mechanism has been whatever raise existed in the public service; no more, no less. Whatever the public service got, that was given to the MHAs salaries. So Green put that measure in as a temporary one pending the work of the committee.

The public needs to understand this was in law; this was drafted by Derek Green two years ago. There was no more to it than that. It is just an unfortunate coincidence of timing.

MR. SPEAKER: Further questions?

Mr. Parsons.

MR. KELVIN PARSONS: Thank you, Mr. Speaker.

I am just curious as to why the committee did not recommend the formula. We hear all the talk about the Green report, and we are living in the Green environment since Chief Justice Green rendered his report. He outlined the formula, as explained by the Clerk. So, you disregarded the formula that the Chief Justice recommended, which was what everyone was living by; so, you disregarded that. You had all the information of what happens everywhere else in the country, whether it is CPI or whatever, yet, you did not decide what the formula should be. It seems to me that you are very firm on making a decision vis-à-vis the 8 per cent, but you were not very firm when it came to saying: Okay, we believe this should be the formula.

I am just wondering why you would not have said: Okay, this is it. We are the new committee. We are the first one struck after Green. We are going to make the template that we are going to have on a go-forward basis and here it is.

As a group of parliamentarians we are no further ahead, as MHAs, than we were two years ago, in the sense of anyone who gets involved in this business you have no idea what formula you are facing. I am just wondering why the committee did not do that, if you had all the information before you.

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: Yes, Mr. Parsons, when we looked at the - and I guess it is fair to say that we considered the public representations and we also looked at and considered the salaries of MHAs, MLAs across the country. In looking at that, if you look at the recommendation to relinquish the 8 per cent, that would put MHAs in this Province still at around $95,000. If you do that comparison, if you look at Appendix F on the salary comparison, if you do the average for all of Canada, including the federal, the average today comes up around $94,400. If you take out the federal, for example, and you do the provinces and territories, that average comes out at around $89,000. If you do the peer group that we talked about earlier, the average then comes out at around $81,000.

The other issue, as we mentioned in the lead-up to the recommendation, was that we learned during the course of our inquiry that at least four jurisdictions have inched due to some form of wage freeze for their MHAs and MLAs. So we felt, based on that, that it would be appropriate that for the next two years there be a wage freeze and that the method of compensation, how MHAs are to be compensated, would be left to the next review committee, which we recommended should be done in two years’ time.

MR. SPEAKER: Further commentary?

Mr. Parsons.

MR. KELVIN PARSONS: Thank you.

Just for the record again, and I will not belabour the point further, I have no problem with your recommendation, none at all. I just think your committee, with all due respect, missed the boat when you failed to give a formula; because that was part of it, I understood, that the committee would do, was to say: Yes, here is a recommendation but here is what you live by in the future.

I accept the recommendation. I have no difficulty with your recommendation whatsoever, but it did not do anything with giving anyone any guidance on a go-forward basis other than say shove it out to the next committee. I did not think that is what the Members’ Compensation Review Committee was all about. I thought you people were about creating a formula, a template that everybody would know what they live with in the future.

MR. SPEAKER: Ms Bennett.

MS BENNETT: Just on that, I think one of the reasons why we were hesitant to implement or recommend a formula going forward had more to do with the fact that we would strongly – underlined three times – encourage the House of Assembly Management Commission to look at implementing this committee six months after the next election. We felt, in our work, that the timing in the legislative session of calling the committee needs to be very close to the election; and, more importantly, when we looked at the salary recommendation in addition to allowance issues and other issues that we were asked to deal with, it was so close to when the Green report had been adopted and made into law that it was too early for us to deal with some of the issues. We really felt strongly that there needed to be another committee of ours struck as quickly as possible after the next election.

So, while that does not answer Mr. Parsons’ questions and concerns, certainly I hope it would speak to our motivation of encouraging the Management Commission to look at six months from the next election striking this committee again.

MR. SPEAKER: Further commentary?

Mr. Barry.

MR. BARRY: Just to add, I do not know if it will clarify what Mr. Parsons has stated but it is hard to come up with a formula for an annual increase when we are suggesting a freeze. We are saying that the levels of compensation, at least for the next two years, should be adequate. So it is hard on one hand to say there will be an increase next year and the year after when we do not think there should be. So, that would be one reason.

MR. SPEAKER: Further commentary on this particular item?

It is my understanding, while we mention MHA salaries here, there are a number of positions that pay extra remuneration attached to the House of Assembly as well. I am thinking about the Leader of the Opposition, Leader of the Third Party, Speaker. There are eleven, I think, in all. Your suggestion is that the 8 per cent on those particular remunerations be rolled back to July 1 as well?

MR. O’NEILL: That is correct, Mr. Speaker, yes.

MR. SPEAKER: Yes, okay. Thank you.

There being no further questions or commentary, we will move to recommendation number 2 on pensions.

Mr. O’Neill.

MR. O’NEILL: We probably already covered that recommendation, Mr. Speaker, in terms of, we are recommending that the salary referred to in number 1 be frozen at the level, pending the recommendations of the next Members’ Compensation Review Committee appointed in accordance with the act.

MR. SPEAKER: The next one would be pensions.

MR. O’NEILL: Oh, I am sorry. Did you want to finish the other two on salaries, just…?

MR. SPEAKER: Well, it is my understanding that would be encompassed in commentary already made.

MR. O’NEILL: Okay.

MR. SPEAKER: The next one will be pensions.

MR. O’NEILL: Yes, Mr. Speaker. On pensions we had, of course - as I am sure everyone appreciates, pensions is a fairly complex issue and we spent a fair amount of time with the Pensions Division of the Department of Finance, with the experts in that division, learning about pensions. In the course of our public consultations, I do not think it would come as a surprise to anybody that there are two key areas that emerge in regard to the current MHA pension plan, and that is: the annual accrual rate and the age of eligibility. Those are issues that I guess can be fairly said that for many years has been an issue with regard to the electorate of the Province. So it was on that basis that as a committee we decided we would address those two issues.

We also looked, as you are aware, at the comparison with MHA and MLA pensions across the country. We made some observations with regard to the current pension plan existing in this Province.

So based on that, Mr. Speaker, we recommended that the current MHA plan, the accrual rate, be reduced from its current level of 5 per cent per year - which currently is the second-best in the country, next to Nova Scotia - for the first ten years, and 2.5 per cent from years eleven to twenty, to be an accrual rate of 3.5 per cent per year for a maximum of twenty years. The effect of that recommendation, of course, reduces the maximum accrual from 75 per cent to 70 per cent.

The second issue is that the current MHA plan eligibility criteria in terms of the age be replaced, and that the age now be that an MHA will be eligible for pension entitlement at fifty-five years, provided that the MHA has five years’ service and has served in at least two General Assemblies.

An MHA, of course, can elect to take a pension between the ages of fifty and fifty-five years, with a minimum of five years as an MHA and having served in at least two General Assemblies. However, in that event, the MHA pension would be reduced by 6 per cent per year, less than the age at which the unreduced pension would commence. That is a similar penalty provision, Mr. Speaker, that currently exists in the Public Sector Pension Plan.

Finally, Mr. Speaker, that the changes that we are recommending to the accrual rate and to the age of eligibility be commenced as of the date of the coming into force of the legislation to give effect to those amendments. So, this would mean, of course, that these proposals will apply to MHAs who are first elected after the commencement of those amendments.

MR. SPEAKER: Commentary?

Ms Michael.

MS MICHAEL: I have a question, Mr. Speaker. Thank you.

I am curious. In the second part of the recommendation you say that the pension entitlement would come at the age of fifty-five years, provided the MHA has five years’ service and has served in at least two General Assemblies. That is slightly different from where we are now, because now one of those General Assemblies has to be a full Assembly, is my understanding. Did you mean it that way or do you mean that both – you could, for example, have two in one year. Say you came in, in a by-election, and for some reason three in the next Assembly, and for whatever reason do not go into your fourth year, that would be five years and you are saying that person would get a pension. It is a change from what we have right now, I am pretty certain. I am pretty certain one of the Assemblies has to be a full Assembly.

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: Ms Michael, no, certainly the intent of the recommendation was not to change that section of the criteria for eligibility.

MR. SPEAKER: Ms Michael.

MS MICHAEL: I think I am correct (inaudible). I should have checked it myself, but I forgot to do that. I am pretty certain that one Assembly has to be a full Assembly. Because I know my own experience, because of the fact that I served in one Assembly, partially, a year, I need a full – that is not why I am going to stay in for four years, but I do know that I would have to serve the full Assembly if I were to get my pension. I am pretty sure that is the rule.

MR. SPEAKER: Maybe somebody else can comment, but that is not my understanding of that particular item as it exists today.

MS MICHAEL: Well, if I am wrong, fine.

MR. SPEAKER: It may very well be, but it is not the way that I understand it.

MS MICHAEL: It is my understanding. If I am wrong, fine. If I am correct, though, I think we should stay within whatever the rule is at the moment. That is my point, I think. So I wanted to make sure with the committee that they would want it to be whatever it is we have at the moment.

MR. SPEAKER: Further commentary? Questions?

Ms Marshall.

MS E. MARSHALL: Yes, I had a question or comment regarding the accrual rate. I know that we are using the percentages 5 per cent, 2.5 per cent, and we are moving to 3.5 per cent, but when Justice Green did his review, while our new salary is approximately $95,000 for purposes of the pension, and this is my understanding, Justice Green said it will not be calculated on the $95,000; it will be calculated on, I think, 81.2 per cent. So, in effect, the 5 per cent is not really 5 per cent; it is four point something per cent. The 2.5 per cent is no longer 2.5 per cent; I think it goes down to just over 2 per cent and, accordingly, the 3.5 per cent will actually be reduced to 2.84 per cent.

The comment I would like to make is that people are very sensitive to the accrual rates because our accrual rates are higher, say, than the public service. I would like to see us move from these accrual rates to what I would consider the actual accrual rates, because it gives the impression that we are getting a bigger benefit than we are actually getting. So I would like to see the actual percentage used.

The other question I would like to ask is: Did the committee work up any examples with regard to some scenarios as to what an MHA would be entitled to under the old plan compared to the new plan so that we could, in effect, see exactly what is being put forward for us to approve? I generally find it interesting to see how the numbers work out. While it looks okay looking from a percentage point of view, it would be very interesting to see some examples to see how it converts over to the new plan. Perhaps the committee could answer that question.

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: Thank you, Ms Marshall.

No, the committee, we did not get into any details in terms of looking at what this would look like in terms of what an MHA pension would result in as a result of the application of these accrual rates. I guess one of the reasons is that there are so many variants in terms of when you apply to pension. There are so many applications of different aspects of an MHA income that applies to the pension, and there are so many different percentages applied, that it becomes a very complex piece of business to do that.

What we looked at simply was, if you look at the accrual rate and if you look at the situation across Canada, at 5 per cent we were currently, of course, next to Nova Scotia. We were not the highest, but we were the second-highest in the country. So we felt it was important to address the basic accrual rate and also the age of eligibility at which an MHA could take a pension.

MR. SPEAKER: Ms Marshall.

MS E. MARSHALL: Could I make one further suggestion? I guess it really does not have to do with the committee, but if we are looking at legislative amendments perhaps we can look at how the accrual rate is embodied in legislation. Also, I would appreciate it perhaps if the officials could probably work up a couple of examples for us to take a look at as to how the new calculations – take a couple of examples and work through the old formula, and then work it through with the new formula so that we can see what the difference is.

MR. SPEAKER: Further commentary? Any other questions regarding the recommendations from the management review committee on pensions?

If not, we can move to the next recommendation, which again are two items on the recommendations on severance pay.

I ask Mr. O’Neill to make commentary and introduce that particular topic.

MR. O’NEILL: Thank you, Mr. Speaker.

On the severance pay issue, the committee did look at what was currently in existence across the country with regard to severance provisions for MHAs and MLAs. We also looked at the provisions that are in existence in the public service of the Province. Based on our review, we made two recommendations. One, of course, is that the current provision for the payment of severance remain unchanged. Of course, as we know, that provision is one month pay for every year of service, with a minimum of three months and a maximum of twelve.

The other issue on which we have made a recommendation, Mr. Speaker, is, should an MHA voluntarily resign prior to a general election for reasons other than his or her own serious illness, or serious illness in his or her immediate family, then an MHA shall not be eligible for severance pay.

I would like to take the opportunity, Mr. Speaker, to explain the committee’s rationale for making that recommendation, because admittedly I do not think it is fully explained in that recommendation. The discussion that we had as a committee, and the reasons for making that recommendation, is that it was our view that if an MHA who is elected in a general election decides to move on for employment, takes up employment, full-time employment, during the term of the election, and does not suffer a break in financial remuneration, and as a result of that, of course, that then causes a by-election to be held in the Province, then it was our view that the consideration should be given that severance pay would not be paid in that scenario. I certainly recognize that is not well explained in recommendation 2, but we wanted to take this opportunity to explain to the Management Commission the committee’s thinking behind that recommendation.

So basically, Mr. Speaker, if an MHA decided to move on between general elections to take up further employment, thereby, of course, causing a by-election to be held, it was the view of this committee that severance pay should not be granted. In any other case, there is no reason that the MHA should not receive their severance pay.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Thank you.

I do have questions about the second part of your recommendation. I am glad you just gave the explanation you gave, because at least it explains to me where this came from, because I cannot find any precedence for this kind of thing anywhere that I have looked.

I think we are into a serious human rights issue here in what you are suggesting. For example, the privacy issues around illness are very serious in our society and in our own legislation around privacy issues. If an MHA has to reveal either his or her own serious illness, or one in the family, I really do think we are into serious privacy.

In considering this - we obviously have to consider it because you have put it forward - I certainly am going to be asking for a lot of input from others who have more information than I do, both with regard to the privacy issues as well as the human rights issues. I think this recommendation, given your explanation, is still problematic.

Your explanation itself also - I know that MHAs are elected, parliamentarians are elected, but surely individuals do have the right to make a decision about a choice. It was an employment choice to run, if an MHA runs and gets elected. It is an employment choice. There could be other serious reasons why a person might, in midstream, decide to have to step down that are not related to an illness but still related to something very serious in the person’s life. Severance is something that does recognize work that has been done. That is what severance is about.

So, even with your explanation, I still find this recommendation fairly problematic.

MR. SPEAKER: Further commentary?

Ms Burke.

MS BURKE: I guess I share Ms Michael’s concerns regarding illness and the disclosure in particular if it was with a family member. The other recommendation that I look at here is the fact that, unless it is a serious illness, if somebody leaves during a term, that there is no severance.

My biggest concern in that regard is – and I understand where you are coming from, if someone leaves for employment purposes or some other reasons. If there is no employment attached to it, but there are some very serious issues they have to leave for, they are not entitled to EI either. So you are kind of, all of a sudden, cutting off, I suppose, even a bridging to another form of income or something. So that part concerns me.

You could conceivably have a situation where somebody has served for twenty years, they are nowhere near fifty-five to collect a pension, but there were compelling reasons why they had to leave. In saying that, maybe at some point there could be more parameters put around it. I know when I was with the public service in the federal government, if you left for political reasons there was no severance. So, MHAs could be leaving the provincial Legislature to run federally. So there could be other circumstances - whether it is employment or political reasons - that would not sit well, that you collect your severance and move on. I think right now, what you are getting at here, obviously, you have explained about the employment and being able to move on, but I think there is still a gap right now that we are not addressing with the present recommendation.

MR. SPEAKER: Ms Marshall.

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

For this recommendation here, it was different from the previous two. The one on salaries and also the one on pensions, they will come into effect either immediately or some time in the near future, but this one does have almost a retroactive implication. So it does seem unfair in a way because we would have MHAs who have served three or four terms. The life of an MHA is sometimes very difficult and, of course, the longer you are in this business it probably gets a little bit more difficult.

I can see a scenario happening whereby someone who has served three terms and goes into a fourth term and halfway through decides, for family reasons or reasons other than medical, that it is time to exit and move on to something else; yet, the severance that has been accumulated in three previous full Assemblies will no longer be paid out to that individual. It seems that this recommendation is unfair, can be unfair, in a number of instances. That was my primary concern with it, that it sort of has a retroactive application.

I did also want to make the same point that I made with the pensions. The accrual rate, we are talking about like a month for each year of service. When you take our gross salary and you reduce it according to Justice Green’s formula, it actually does not work out to be a full month, so that is also an issue for me. Of course, I do have the same concerns that Ms Michael and Ms Burke mentioned with regard to serious illness. I mean, how are we going to police that? How are we going to patrol it and who, which individual or which panel of individuals, is going to decide whether the illness is serious enough to warrant the payout of severance? So I think there a number of issues there with regard to that recommendation.

Thank you, Mr. Speaker.

MR. SPEAKER: Mr. Osborne.

MR. T. OSBORNE: Thank you, Mr. Speaker.

When I read the recommendations regarding severance initially, my thought was that - because of in part what you had explained, Mr. O’Neill, that there was a cost if a member leaves prior to the completion of a term in regard to a by-election and other reasons that you have explained, but I did have a concern; and I would see your point and the point of the Commission in that regard, but I do have a concern. If a member is elected and serves out an entire term, I would feel that member has earned severance for that particular term. If a member then runs for re-election and serves only part of the following term, I see your point, but I think that a member who serves out a complete term should be entitled to the severance for that particular term. That would be my recommendation.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: Thank you.

I am a little bit lost here. My understanding is that the first part of the recommendations here leaves the severance provisions unchanged, so anyone who serves out a full term or whatever, there is no issue here because the committee has not recommended anything. It is only in the event, as I see it, that someone voluntarily resigns prior to a general election for reasons other than his or her own illness or a serious illness that it becomes an issue. Other than that, there is no change here. Am I correct in that understanding?

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: That is right, Mr. Parsons. If a member, for example, is elected in an election and, coming up to the next election – we have elections every four years – the member decides that they are not going to stand for election, or is defeated, then that member would receive severance pay.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: Yes, that is my understanding. So it only becomes an issue if you have gone through a general election and, before the next general election takes place, you decide that you voluntarily resign - is what you are saying - for reasons other than illness. So that is my understanding. I have a problem as well with that piece about voluntarily resigning because again severance is based upon what you earn for time worked. There may be very, very legitimate reasons why one might need to leave that employment, whether you are working as a lawyer or you are working as a cook, or whether you are working as a politician. I do not think you should tie the severance to whether someone voluntarily leaves it or not and only allow them to be entitled to their severance because of sickness. There could be all kinds of reasons why someone legitimately leaves their employment before the term is actually up.

The other thing is, I think by having such a provision here, it could lead to abuses in the system. I submit that if someone has a legitimate reason to leave, other than illness, yet they know this provision is there, all you are going to do is encourage people to hang around just to get their severance. I mean, if I have a legitimate reason to leave in 2010 but you are telling me that I have got seventeen years’ service, that I am not going to get it because I voluntarily leave, all of a sudden you are going to see people say: Well, that is fine; I will sit out for the next twelve months. I think that perverts the course of what democracy is all about.

You are here because people elect you and, like anybody else in the world, we should not be treated any better but we should not be treated any differently either. That is my view. If you decide to leave, that is up to the individual to change their employment, and politicians should not be treated any differently than anyone else. That is why we have provisions for by-elections.

MR. SPEAKER: Ms Michael.

MS MICHAEL: Thank you.

I just want to get clarification, because I am not sure that I am clear about your answer to Mr. Parsons, Mr. O’Neill. Are you saying that this second recommendation means that they would not get severance, only for the term during which they resigned? So, for example, if you use the example that Mr. Osborne used, if you had somebody who had twenty years in, and in the middle of the last term, which is to say the next Assembly, after already working twenty, that you are only talking about they are not getting severance for that term, or do you mean for their whole twenty? It is not clear to me what you meant. I agree with what Mr. Osborne recommended. Are you saying that is what you intended, was what Mr. Osborne recommended?

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: Thank you, Mr. Speaker.

The intent was that if an MHA resigns, regardless of how much time they have served, if an MHA resigns mid-term, and as a result of that causes a by-election to be held in the Province, if the MHA resigns to take on other employment, full-time employment, then the MHA would not receive severance.

MS MICHAEL: No matter how many years they have worked?

MR. O’NEILL: That is right.

MS MICHAEL: Well, I find that very problematic for the reasons that have been outlined by Ms Marshall, because that work has been done and that is what severance is all about. There is more discussion to be had on it, but I just wanted to be clear what you meant.

Thank you.

MR. SPEAKER: Mr. Osborne.

MR. T. OSBORNE: Ms Michael just made a point that I was going to make as well.

MR. SPEAKER: The Clerk.

CLERK: Yes, thank you, Mr. Speaker.

I just wanted to go back to Mr. O’Neill’s introductory comments on the severance pay issue. As I understood it, the committee’s key issue was simply voluntary leaving the MHA duties to go to alternate employment. The reason, outside of seeking alternate employment, was not a huge concern for the committee, whether it was illness, family related or otherwise.

It is conceivable - I could talk to the law clerk. There may be a way of talking about – if the key issue is moving to alternate employment, we may be able to draft something which addresses that issue of resigning as a member, causing a by-election, as the Committee said, for purposes of going to alternate employment. If that is the heart of the issue, there may be another way of drafting that for the Commission’s consideration.

MR. SPEAKER: Ms Bennett.

MS BENNETT: Just for information, there is a jurisdiction in Canada that has already implemented a similar policy to this with regard to severance pay; I believe it is Manitoba.

I guess, just to explain the mindset of the committee when we were making this recommendation, we looked at severance pay as the bridging pay from one position to another position. We felt that if an individual who had served in the House of Assembly was successful in immediately moving to another position, and left the House of Assembly position that they put themselves forward for, and caused a by-election at a $100,000 cost to the public purse, that we felt that was a reasonable expectation by the taxpayer that the severance would not be paid.

So one of the differences, I think, that is significant from the commentary that I have heard this morning is, in our minds, that we were looking at severance pay as not something that was earned but something that was there to bridge the gap between one position and another position, and that was just some explanation.

MR. SPEAKER: Mr. Osborne.

MR. T. OSBORNE: I guess the only comment that I would make on that is, if a member were to not offer for re-election they would get their severance pay. If they walked into a job the following day, they are still entitled to their severance pay. If a member of the public service reached retirement and left, they would get their severance pay, and if they walked into a job the following day they still get their severance pay.

So I do find your recommendation still somewhat problematic, and again go back to the recommendation that I made that if a member serves out an entire term they should be entitled to that. If they leave partway through the following term, then only the term that they have left partway through - I agree that if a punitive measure is to be put in place, that it is put in place for the term that you leave through.

MR. SPEAKER: Further commentary? Questions?

Mr. O’Neill.

MR. O’NEILL: If I could, Mr. Speaker, I guess I just want to go back to, as an independent review committee, when we conducted this inquiry, as you know, we received many representations from the general public. Part of the discussion that we had as a committee around this issue had to necessarily take into consideration the views of the electorate as well as the impact that any recommendations we would have, if implemented, would have on the forty-eight elected officials in the House of Assembly.

So it was for that reason, when we looked at that recommendation, it was our view that if an MHA decided to leave, thereby costing the taxpayers of the Province approximately whatever a by-election costs - I am told it is in the vicinity of $100,000 a year - if that MHA was going on to further full-time employment then, as Cathy just explained, it was our view that our recommendation would be that consideration should be given then as to whether or not that MHA would receive a severance package while leaving to take up full-time employment and thereby causing a by-election. That is simply, I guess, the principle behind it, Mr. Speaker.

The fact that implementing this sort of a provision is wrought with all kinds of challenges is not lost on the committee as well. We know that there are issues around this and that, no doubt, perhaps a great deal of discussion needs to be had with regard to how to implement this. For example, how do you determine serious illness? What is serious illness, and illness in a member’s family?

The fact that this recommendation could have some real complexities, and as Mr. Parsons has indicated, certainly causing an MHA just to sit around so they can collect their pension is an issue, that could be a side issue with regard to something like this. So, for that reason, we recognize that a lot of discussion would necessarily need to be had around the practical application of this recommendation if it was accepted.

Clearly, as the committee Chair, I would want to clarify that the clear intent when we looked at it from the committee’s perspective, taking into account the balance between the public, the electorate of the Province and the forty-eight MHAs, that was the rationale for us making the recommendation that we did.

MR. SPEAKER: I understand, if I am correct here, I am hearing that Item 2 under severance pay probably needs some further clarification and needs different language in order to portray even the intent of the committee here. Is that correct?

I think the committee will make themselves available to the Commission for a six-month period after the report is delivered. Are we suggesting that maybe we leave this item for further discussion and bring it back to the committee and have the House of Assembly staff work on a statement here, or something else on severance pay that the committee would agree to, or would clarify and accept and bring back to the Commission?

Mr. O’Neill.

MR. O’NEILL: Yes, Mr. Speaker, absolutely. We would be more than happy to engage in further discussions with the House of Assembly staff with regard to the practical application of the recommendation, should it receive some favour with the Commission.

I absolutely agree with Mr. Parsons. Having spent thirty-five years in the public service, I am not a proponent of putting a policy or a regulation or a law in place that basically you cannot apply. It is better that you not do it at all, in my view.

MR. SPEAKER: Further commentary?

Does the Clerk need any further clarification? The Clerk indicates that he is fine with that.

The next item on the agenda will be the recommendation under allowances. Since there are five particular items here, I think what we will do is take each one of those individually and that way we can move from Item 1 to Item 2, because they are completely different standing alone. So we will take each one individually, and I will ask Mr. O’Neill if he would start providing us with an explanation and with a commentary on Item 1 under allowances.

MR. O’NEILL: Thank you, Mr. Speaker.

As you know, of course, much of the discussion the committee had with regard to the allowances component of our inquiry, of our terms of reference, we had with MHAs who met with us. There was not very much discussion with members of the general public. So, in our discussions – because part of what we wanted to do as a committee when we invited MHAs to meet with us was to, in fact, seek the views of MHAs with regard to the application of the new allowance regime that had only been in place since 2007 – and, in fact, in place for, as we understand, just one full fiscal year. So we felt it was important to engage that discussion with MHAs.

What you will see following, Mr. Speaker, is an analysis of some of the key issues; we heard a number of issues. We obviously did not deal with all of them, but we felt that it was important that we deal with some of the key ones in the allowance section.

The first one, Mr. Speaker, deals with an issue that we heard from MHAs, which relates to if an MHA – and the way we framed the recommendation follows, I guess, the course of the discussion, Mr. Speaker, we had with the respective MHAs. The issue was this: that if the House is in session and an MHA living in a rural area that is a significant driving distance from the capital region has to leave on a Thursday evening to drive to his or her district, then if they encounter adverse weather conditions or severe driving conditions, they would have to seek the permission of the Speaker to take overnight accommodation. It was felt that this was challenging, it was problematic, and that the MHA should, in fact, have the opportunity to make that decision of their own accord, and obviously make their submission with regard to expenditures following taking that accommodation.

When we looked at it as a committee we saw that, from our perspective, there was a potential safety issue there that the – it probably was not really fair to the Speaker of the House of Assembly for an MHA to call from a distance and advise the Speaker of situations with regard to adverse weather conditions and dangerous driving conditions, and seek the permission of the Speaker to grant permission for overnight accommodation. So it was our recommendation, Mr. Speaker, that an MHA, for example, we felt, whose district is in excess of four hours’ driving time from the capital region by the most direct route, shall be entitled to one night accommodation while en route to his or her district while the House is in session.

Now, we said while the House is in session, Mr. Speaker, because that is the way it was characterized to us, that if the House - my understanding is that the House convenes in the afternoons, and the concern that was expressed to us by MHAs is that on a Thursday evening when the House clues up, and rural MHAs who live quite a distance from the capital region need to get back to their districts, it would be appropriate if they could leave the capital region on a Thursday evening, at least get a head start towards their districts, so that by the next morning they can finish their journey and conduct business in their district on a Friday. That is the way it was characterized to us, Mr. Speaker, and hence the reason for the recommendation.

MR. SPEAKER: Commentary?

Mr. Parsons.

MR. KELVIN PARSONS: Thank you.

I understand that it was the Member for Fortune Bay-Cape la Hune who might have made this concern known to you. I probably should have made it known myself - I thought it was going to be presented to your committee in a more general sense - because I am probably one of the few MHAs who run into this quite often. She presented it to you, I understand, from the point of view of the House was in session. If she left here to go to her district, for example, she might travel as far as Grand Falls on a Thursday night and then she could finish the trip the next morning, which was not allowed previously. She wanted some way to do that properly.

I saw it as a safety issue, myself, and not only when the House was in session. Like, I could be in here for either - I am a member of the Audit Committee of the management committee. I could be here because of the management committee. I might be in here because of the Public Accounts Committee. I might be in here just simply because I am on MHA business, or I may be in here because the House is in session, and to restrict it as to when you can or cannot look after your safety does not make any sense to me. If I leave here, for example, to drive home on a Thursday and I hit a snowstorm in January when the House is not in session, or I hit a snowstorm in March when the House is in session, it is irrelevant to me. I still need to look after my safety. So, if I had to stop for the night because of a snowstorm, I just think that your provision - I understand why you said while the House is in session. I just think the whole rule does not make sense. If you are looking at it from a safety perspective, which it should be, you should not put that safety there only when the House is in session. That happens any time of the year.

MR. SPEAKER: Further commentary or questions?

Ms Michael.

MS MICHAEL: Thank you.

It seems to me that what we are trying to get at here - and I agree with what you are trying to get at - is that it really does not matter. If travel means that on a given night the person is not home, whether the person is still in St. John’s or whether the person is en route, there is a night’s accommodation that is allowed for. So it does not matter whether they are en route or in St. John’s; if that is a legitimate not-at-home accommodation, it should be covered. I think that is probably what Mr. Parsons is saying, and that makes sense to me. Maybe there needs to be a rewriting to reflect that, if we all agree that is what is trying to be gotten at here. In your preamble in your report, that is what you talk about.

MR. SPEAKER: Ms Marshall.

MS E. MARSHALL: Yes, Mr. Speaker, I have two questions. The first one is: my understanding is that this recommendation would not result in providing an additional night’s accommodations to the members. Is my understanding correct, that this would be within the current allocation? My second question relates to: it is speaking about while en route to the district from St. John’s. Was it the intent of the committee that it would be only going in one direction or would the recommendation also apply in reverse, somebody going from their district into St. John’s?

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: If you look at the way it was characterized to the committee, you would suggest that it would be going in one direction, but I go back to Mr. Parsons’ comments which I think are very valid; because when we looked at it, and examined it in detail, we did see it first and foremost as a potential safety issue. Any rural MHA who has to travel – I guess, when you look at, as well, the geography of this Province, the capital region happens to be on the eastern-most part of a fairly large Island, whereas if you look at the Legislature, for example, in Nova Scotia, it is in Halifax; in New Brunswick, it is in Fredericton. So I think it becomes rather unique in this Province that you have rural MHAs who live quite a long distance from the capital region.

So I think, Ms Marshall, it would only be appropriate, and I am sure Cathy and Brian can speak to it as well, but from the committee’s perspective, if it creates an issue of safety, whether it is going to the district or coming back from the district, whether it is when the House is session or the House is not in session, the bottom issue is if this creates a safety issue, first of all, it is not really appropriate to have to call the Speaker and have the Speaker make that determination from the House of Assembly or from the capital region. So an MHA needs to be able to make that determination regardless of the conditions. The fact that they live so far from the capital region, I think, is key and they need to be able to make that determination of their own accord and have that accommodation. As Ms Michael has indicated, once you leave your district then you are having accommodations somewhere, whether it is halfway or whether it is in the capital region.

So we think it is certainly very - the commentary from Commission members, Mr. Speaker, is very appropriate.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: Clarification. Ms Marshall asked: Would this night come out of your given allocation? That causes me, again, some confusion; because if I come from my district - I live in Port aux Basques - if I come in here, for example, right now under the current rules I am allowed fifty nights per year when the House is not in session. We are talking here about a situation where I have been in town, I have done my business, and I am leaving to go home tomorrow morning. I run into a snowstorm and I stop in Grand Falls. Are you suggesting that because I stopped in Grand Falls, because of a snowstorm, for the night, that night now comes off of my fifty nights?

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: No, I am sorry. Obviously, that would have to be in addition because you are now incurring. So, from that perspective, where that is incurred, that would be an additional cost.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: Thank you.

Would it be fair to say, then, or can the committee say, or are you prepared to say, that this recommendation was very prescriptive because, for example, of the use of the words, while the House is in session; but, is it appropriate for the committee to say you have reflected upon this, or can you reflect upon this to say that there are other circumstances that it would be permissible? Because otherwise, you see, the public are going to say, if I get caught in a snowstorm: Mr. Parsons, pay for it out of your pocket.

It has gotten to that point now, in the public perception, that, regardless if Chief Justice Green does not say it or you do not say it as a committee, if we say it ourselves, they are going to say: Tough! You are in a snowstorm; pay it yourself.

I am just wondering for some guidance here from you people. Does it make any difference now that you understand fuller what the circumstances might be, that we can get some further advice from you people?

MR. SPEAKER: Ms Bennett.

MS BENNETT: Two points. One: I think, from our perspective, one of the things that we learned as we went through this process from July to the end of October was that there is a mechanism in place right now for those decisions to be made; and, quite frankly and bluntly, and dare I say somewhat directly, it is the Management Commission’s responsibility to make some of those decisions on policies, and they do have the ability to do that.

We are very cognizant, as a committee, of the sensitivity that, so close to Green, very few changes are being permitted by the public and certainly by the Management Commission and by the Legislature as a whole. As a committee, though, looking at the details of these allowances, it is apparent to us that the tendency not to make the changes, and deferring those to a commission or a committee like ours, is going to continue to create a lot of time and energy that is not necessarily productive.

Mr. Parsons, the other thing I will add, too, is: As a committee, one of the things we were vehemently adamant on was that we wanted to meet with MHAs. It was very, very unfortunate that those meetings were characterized the way that they were characterized; because, for us to make informed decisions, in particular on the one that we are talking about now - we are not living the life of an MHA, we are not dealing with the expenditures and the expenses and the things that you have to deal with - we needed to hear that information.

One of the things I would personally say is, when we get to this next committee there is going to have to be an understanding from the public and from the House of Assembly members that the committee needs to hear from the members; and, secondly, that decisions like this that require maybe a small policy change at the Management Commission need to happen at the Management Commission, and the Commission needs to be empowered to do that.

MR. SPEAKER: Members’ allowances and benefits are certainly complex, and I would think that Chief Justice Green, in his recommendations, probably was of the understanding when he suggested that the Members’ Compensation Review Committee remain available to the Commission for six months was probably a reflection of what he experienced himself in putting forward recommendations and suggestions and the wherewithal of the House to be able to work within that and allow members to represent their constituencies and to be available to their constituents. Hence the reason why we are dealing with some of those issues here today and seeking further clarification.

Further commentary on Item 1?

Here again I think there needs to be clarification, and I think it needs to be done with the involvement of House of Assembly staff and the committee. I guess it would be advisable to me to say again that the House of Assembly will work with and make suggestions back to the committee to have them look at this particular recommendation, where we can fine-tune it and make it workable in order for members to be able to carry out their due diligence as elected officials.

The next item would be Item 2.

Mr. O’Neill.

MR. O’NEILL: Thank you, Mr. Speaker.

The next item deals with the accommodation for MHAs in a secondary residence. When an MHA is required to be in the capital region attending to constituency business, the committee recommends that that expense be fixed at $53 per night.

MR. SPEAKER: Commentary?

Ms Marshall.

MS E. MARSHALL: One question. This does not provide for an increase in the number of nights, does it? So when the House is not in session your cap is your fifty nights, is that correct?

MR. SPEAKER: Mr. O’Neill.

MR. O’NEILL: That is correct, Mr. Speaker.

MR. SPEAKER: Further commentary?

Mr. Parsons.

MR. KELVIN PARSONS: Mr. Speaker, I wonder if the House staff could explain, because the public probably – I am a bit foggy myself on this issue of secondary residence. I currently live in the district, and whenever I come in here I usually get temporary accommodations, which would be like a hotel. Are we suggesting here now that if I were to live in my District of Burgeo & LaPoile permanently, but rent an accommodation in here, say rent an apartment, is this saying now that – and if I live in that apartment eight nights a month, ten nights of a month - I would charge $53 per night for each of those nights? Is that the way the system works right now, and is that what is happening here?

MR. SPEAKER: Ms Lambe.

MS LAMBE: Yes, I would assume that is what is being suggested by this recommendation, that instead of the prorated amount that a member would receive now, based on the cost as outlined in the rules and prorated for each night, in lieu of that, you would get the set $53 for each night you actually occupy that residence.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: So in a nutshell again, to use an example, I live in Burgeo & LaPoile, permanently. I rent a place in here in St. John’s, and I am here ten nights of a month in January. I would charge $530 for those accommodations that I would use to help pay my rent here, and that is it you are saying?

MR. SPEAKER: Ms Lambe.

MS LAMBE: Yes, that would be my reading of the recommendation. Really, the only thing changed from the old rule is the amount that you can claim for each night that you are in the secondary residence.

MR. SPEAKER: Mr. Parsons.

MR. KELVIN PARSONS: For clarification again: Is there any crossover between this figure that is being suggested here for secondary residence, because it is identical to the amount that you currently are allowed to claim for your per diem for meals, $53. So that is two different issues we are talking here. So if I were to come into St. John’s, you are saying, and have an apartment in here, I would get $53 per day for a secondary residence, and I would also get $53 for that day for meal allowance, $106 in total.

MR. SPEAKER: Ms Lambe.

MS LAMBE: The meal allowance is actually $50 a day. So it would be the $50 - but it would be the $50 plus the $53 for the secondary residence.

MR. SPEAKER: Further commentary?

Mr. Kennedy.

MR. KENNEDY: Yes, thank you, Mr. Speaker.

I think this is one that is good common sense. If we are paying for our MHAs to come into a hotel, spend $150 a night, for example, in St. John’s in a hotel - and my understanding is some of these can go up to 100 nights a year, between your fifty nights and your nights when the House of Assembly is sitting. So if you just do the math on it, we are going from $15,000, $16,000 a year it is costing the taxpayers, whereas if we do it at 100, even if it is the same 100 nights at $53 a night, that is $5,000. So we are saving the taxpayers money.

I also think that there is a health issue, too, Mr. Speaker. Anyone who has spent time living in hotels, it is not fun. You do not eat as well, you do not sleep as well, or at least I do not. I do not know about other people. So it seems to me we are allowing our rural MHAs to have a place in St. John’s, if they wish to do it that way, to call their own, but, more importantly, or just as importantly, we are saving taxpayers money. That is the one thing that is always, on this one, I have been strong about, is that it comes down to savings that could be up to $10,000 a year per MHA, from what I understand. I do not know if those figures are correct, and I thought I had read them somewhere. It might have been Mr. MacKenzie’s memo he gave. So I am strongly supportive of something like this simply because, one, it is better for the MHAs, and, two, it saves the taxpayers money.

MR. SPEAKER: Further commentary?

Ms Burke.

MS BURKE: I would like to comment that - agreeing with what Mr. Kennedy just said - if an MHA determines that they are going to stay in a secondary residence as opposed to a hotel, it is cost-effective, but I think we should do some analysis as we move forward to see if the $53 a night is an appropriate incentive that people would do that; because when we look at some of the analysis we have here, the monthly average is about $508 and I do not know how many apartments you are going to get in St. John’s right now for $500.

So if we can continue to do the analysis - and I would not suggest at this point that we change the $53, but we may need to close the gap a bit more and then we could truly encourage MHAs to look at secondary residences as opposed to hotels, because right now where the rationale - and I understand your logic. I do not know if the incentive at this time, based on the rental properties in St. John’s, is going to actually encourage the MHAs to make the change, so we are still probably going to be spending thousands of dollars more than necessary because we are looking at $53 probably versus $70 or something like that. I think we need to do an ongoing analysis, and at this point I would not suggest that we change that number.

MR. SPEAKER: Further commentary?

Just for explanation, presently Members of the House of Assembly determine their secondary residence either in the capital region or in their constituency. We do have some members that have a secondary residence in the constituency that they represent.

While we are talking about the capital region here, was it the committee’s wish as well that if the secondary residence is in the member’s constituency that the member would still be allowed to claim the $53 a night as they can presently do?

Mr. O’Neill.

MR. O’NEILL: To be honest, Mr. Speaker, I do not know that we got into it in that detail. The issue that was framed to the committee was the issue around residence and staying in the capital region.

MR. SPEAKER: Mr. Kennedy.

MR. KENNEDY: Yes, I know there is at least one, if not a couple of MHAs who come to my mind whose secondary residence would be in the district. For example, the Member for Grand Bank, I know. He is driving four hours, and if he goes out there he either has to stay in a hotel or in a private residence. So I do not know if there would be any difference in that respect, if you have a secondary residence in the district.

MR. SPEAKER: So was it the committee’s understanding or thought that this would still remain the same, that the member with his secondary residence in his or her constituency would still be able to access the $53 per night for the number of trips that they would ordinarily be allowed to claim?

Mr. O’Neill.

MR. O’NEILL: I think certainly if it follows the same general application as Mr. Kennedy has just outlined, then there is no reason why he should not apply.

MR. SPEAKER: Thank you.

Further commentary or questions on Item 2?

The next item on the agenda will be Item 3.

Mr. O’Neill.

MR. O’NEILL: Thank you, Mr. Speaker.

This issue relates to the individual specific constituency allowance amounts that are currently contained in the schedule to the rules which were, as the committee understands, allocated coming out of the Green report. Our understanding, of course, is that when those amounts were allocated in 2007 they were basically a snapshot in time and it is certainly reasonable to assume that those amounts will necessarily change, based on the experiences that the MHAs are having in regard to the new constituency allowance amounts, either up or down. When we reviewed the expenditure statements, for example, for the rural and the urban MHAs, we did notice that in the first fiscal year of operation there were certainly discrepancies with regard to the amounts that were used. For example, in the capital region it was noticed by the committee that very little of the - I think it was a $7,500 total amount actually used.

So, based on those observations, Mr. Speaker, we made a recommendation that those specific amounts in the schedules be reviewed on an annual basis, and that any changes to be made would be made on the basis of a submission made by the respective MHA outlining the rationale for requesting a change in that amount, any changes of an unforeseen nature that may have occurred in a specific district that is likely to have a significant impact on a district and its constituents, and that is further explained in the lead-up to the recommendation.

The appropriateness of the existing specific district allocation, based on the experience of MHA expenditure in the previous year, and that, Mr. Speaker, relates to what I indicated just earlier in terms of our observation of the current $7,500 that is provided to MHAs within the capital region, did not show that very much of that expenditure was used. So, on that basis we made that recommendation.

MR. SPEAKER: Commentary? Questions?

There being none, we can move to Item 4 under allowances.

Mr. O’Neill.

MR. O’NEILL: Thank you, Mr. Speaker.

On Item 4, Mr. Speaker, this is an issue that, while it has limited application, it was characterized to this committee that there are districts in the Province which require the use of other modes of travel other than are currently outlined in the legislation and in the rules. Our understanding of the issue is that an MHA who from time to time is required to use other modes of transportation, must, prior to using those modes of transportation, seek the prior approval of the Speaker.

We felt that if an MHA is required to move around his or her district using other modes of travel, then it should be left to the MHA to make that determination without having to require the prior approval of the Speaker. Certainly, any modes of travel that are used, whether it is a snowmobile or whether it is a helicopter or a boat, then obviously the MHA would have to submit the necessary invoices acceptable to the House of Assembly for reimbursement.

MR. SPEAKER: Commentary? Questions?

There being none, we will move to Item 5 under allowances.

Mr. O’Neill.

MR. O’NEILL: Thank you, Mr. Speaker.

The final recommendation on the allowances deals with the automobile allowance that was in place for the Office of the Speaker, the Leader of the Opposition and the Leader of the Third Party before 2007.

This issue, of course, was addressed in the terms of reference to the committee. When the committee looked at the correspondence and the documentation around this issue, including correspondence between the Clerk of the House of Assembly, the Comptroller General’s office, the wording in the legislation and, I might say, Mr. Speaker, more particularly, the Green Report itself, as indicated in our commentary, again leading up to the recommendation, one of the observations that we made as a committee with regard to the Green Report is that if Mr. Justice Green meant to indicate something then he was generally very clear on it. We did not find that clarity in the Green Report.

So based on our review and analysis of the documentation we had before us, it was our view that there was never any intent to remove the current automobile allowance that was in place for the Office of the Speaker, the Leader of the Opposition, the Leader of the Third Party, and accordingly, we made the recommendation.

MR. SPEAKER: Commentary?

Ms Burke.

MS BURKE: I guess my question is along the lines, is it being recommended that it is a non-accountable allowance or a non-taxable allowance because it is taxable, from my understanding, for ministers who receive it.

MR. SPEAKER: The Clerk.

CLERK: Yes, thank you, Mr. Speaker.

The current wording, which was why the Comptroller General and the Department of Justice had problem is: non-accountable. So, that is what the Act says now, but the Green Report speaks of it as non-taxable. I think to implement this we would have to amend the act, delete the term: non-accountable, and substitute: non-taxable. Because the automobile allowance is taxable, ministers pay tax on it, party leaders would pay tax on it. Then the prohibition against new non-taxable allowances would not apply to the automobile allowance. So that would simplify, as much it is needed, to clarify the situation.

Fifteen has a prohibition against certain types of allowances. We just need to apply that to non-taxable, so there is a prohibition against new non-taxable allowances.

MR. SPEAKER: Ms Burke.

MS BURKE: So we would bring in a non-taxable allowance as taxable?

CLERK: No. The automobile allowance is taxable for ministers and it would be for the Speaker and the leaders of the Opposition parties as well. It is the fact that section 15 is written in the negative that the only way to bring in one of these allowances is with the Members’ Compensation Review Committee recommending it.

The offending word is: non-accountable, from the perspective of the Department of Justice and Comptroller General. If that says non-taxable, then it does not include the automobile allowance because that is taxable.

MR. SPEAKER: Ms Burke.

MS BURKE: I would have to see it written.

MR. SPEAKER: Further commentary on Item 5 under allowances? If not, we will move on to other recommendations as suggested by the Members’ Compensation Review Committee.

Mr. O’Neill.

MR. O’NEILL: Thank you, Mr. Speaker.

Yes, Mr. Speaker, in the course of conducting our work, we felt that it hopefully might be helpful and instructive to the House of Assembly if we made certain recommendations with regard to, in the first case, MHA information that is available and accessible to the public. I certainly do not want to spend very much time on this, Mr. Speaker.

For the record, I would like to say that one of the things that we found, I guess, interesting when we conducted our public presentations was the lack of clarity and the lack of information available – not available to the public, but that the public was aware of that was currently available with regard to accountability and transparency with regard to the House of Assembly since 2007.

We would certainly hope that efforts can be made, on a go-forward basis, certainly between now and the appointment of the next Members’ Compensation Review Committee, that the greater awareness, that the public be made more aware of just exactly what is available to them today.

It was our finding, in talking to the public, that there was not a great awareness of what was there.

In terms of the information, we suggested that the information on the House of Assembly Web site would contain the MHAs total compensation, including the amounts received for performing additional duties. That a copy of the MHAs’ declaration of attendance, which is currently required in the act, and the current member accountability and disclosure reports be continued, with detailed notes ensuring the expenditures are easily understood by the electorate. And that this information be readily accessible to any member of the public, and that the information, except as otherwise stated, should be updated on a quarterly basis.

Mr. Speaker, one of the things, I think, perhaps for Cathy, Brian and I, would like to place before the House of Assembly Management Commission and the House of Assembly itself is that we have started on a process and we have addressed it in our report that the world has changed substantially since the Green report in 2007 with regard to the House of Assembly, with regard to accountability, with regard to transparency. Any effort that can be made to make a greater awareness to the electorate of the Province, to the general public, to show clearly how things have substantially changed since 2007, we believe, would be very helpful.

MR. SPEAKER: Commentary? Questions?

Seeing none, are there any concluding remarks, Mr. O’Neill, or any members of the committee?

MR. O’NEILL: I will just make a couple of remarks, Mr. Speaker, and I will certainly invite my colleagues on the committee to make concluding remarks as well. Again, we want to thank you for giving us what I consider to be an honour to do this particular piece of work.

Perhaps if we had known going into it the challenges that came before us, we may have made different decisions, but we did not do that. We accepted the task. The task became a challenging one. The recommendations we made were certainly not made lightly as we indicated.

Mr. Speaker, again, for the record, and as chair of the first members’ compensation independent review committee, I would like to say that I think the single biggest gap in what we have now is a lack of appreciation by the public of the Province, by the electorate, of the role and responsibilities, the duties that are served by the forty-eight elected officials in this House of Assembly, number one. Number two, as I just indicated, the significant shift that has occurred since 2007. We have mentioned it in our report.

I think, unfortunately, reports generally get read beginning at the back. The executive summary gets read and the recommendations get read. I would certainly encourage the members of the public to read our report to gain a greater appreciation of the difficulties that elected officials in this Province, the challenges that they have, that we heard, and also to encourage the electorate to become more aware of those things and to encourage a greater exchange of communication so that when the next - if the next Members’ Compensation Review Committee is in fact appointed within two year’s time, which we strongly recommend, Mr. Speaker, that we have that greater appreciation, because as Cathy indicated, one of the concerns we had was the characterization of our request to meet with MHAs. MHAs did not request to meet with us. We requested that we meet with MHAs because we needed to have that information. We needed to meet in that forum to get that information and, unfortunately, I believe it got wrongly characterized. So I believe that if we can work towards creating a greater understanding of the process, a greater understanding of what occurs and a great understanding of, in fact, how the world has changed since 2007 with regard to this House of Assembly, I think we would all be the beneficiary.

So with that, Mr. Speaker, I turn it over to my colleagues, and I thank you very much.

MR. SPEAKER: Further commentary?

MS BENNETT: We will leave it there.

MR. SPEAKER: On behalf of the Management Commission and on behalf of the Members of the House of Assembly I would like to thank Mr. O’Neill, Ms Bennett and Mr. Barry for your work. It was a monumental task. It was the first time that members went out and polled the general public. I followed some of your meetings. I know that they were not well attended at times but I think that is a reflection of what the piece of work was all about. I thank the committee. I thank you for submitting your report on time, in a timely manner. It is obvious that further clarification is needed. So we will work out a way of dealing with the points of clarification and the recommendations to have it brought back to the Commission knowing full well, either by a meeting or by some other way or means of the Commission, knowing full well that this is the understanding of the recommendation as brought forward by the committee. Thank you very much for your work, and thank you.

Maybe we can just excuse the committee and just take a few minutes to wrap up our meeting here. I understand that is the book of business that we had intended to do today. Members have other commitments as well.

If it is okay with the Commission, we can now take the information that we have heard and take it back to our individual caucuses, get input from the members, have the staff work on the clarifications of what we heard today and what we understand to be the intent of the commission, and make it available to the Commission members and to members so that we might be able to discuss it knowing full well what the recommendations should be.

With that, adjournment is in order. We will ask the members again to come forward and have another meeting at the earliest time possible because there are some changes that have to be made by changes in legislation on at least two particular items.

I thank Commission members; I thank staff of the House of Assembly.

It is moved by Ms Burke, seconded by Ms Marshall, that this meeting do now adjourn.

All those in favour, ‘aye’.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay’.

This meeting now stands adjourned.

On motion, meeting adjourned.