Baird quit early so he could cash in
If it’s crass to talk about money while parliamentarians and pundits are praising John Baird’s political prowess and pondering his legacy, pardon my etiquette.
But one piece of the story is still missing. By stepping down this year, the former foreign affairs minister locked in his entitlement to an annual parliamentary pension of $64,381 starting at the age of 55. Had he waited until 2016, when new rules take effect, his golden handshake would not have been available until his 60th birthday.
To most Canadians, financial freedom at 60 still sounds pretty attractive. But for Baird, it would have meant forfeiting more than $320,000.
It is no coincidence that two dozen Conservatives, five New Democrats, two Liberals and three independents have decided not to seek re-election this year. Nor is it a surprise that the financially advantageous timing of Baird’s departure received little attention in Ottawa. Parliament Hill is a clubby place. MPs may hurl invective across the floor of the Commons, but they all share the same generous retirement package. Political commentators may analyze a departing cabinet minister’s motives, achievements, weaknesses and career plans, but they don’t consider parliamentary pensions newsworthy. They’re just part of the landscape.
Outside the capital, things aren’t so cosy. Each lucrative farewell is a reminder of the disparity between MPs and the constituents they represent. While the government exhorts debt-burdened Canadians to save for their retirement, parliamentarians are taken care of by taxpayers. While most citizens have to wait until they are 67 for old age security (aging boomers qualify at 65), parliamentarians can comfortably retire at 55.
The discrepancy in benefits is stark. Baird’s pension works out to $5,365 a month. Canadians get an old age security stipend of $563.74 and a Canada Pension Plan payment of $610 a month if they worked steadily. Combing the two, they’re still 80 per cent behind the minister.
It would be unfair to suggest pecuniary considerations were the only — or even primary — factor in Baird’s decision. He is 45 years old. He has spent his entire adult life in politics. Now is the perfect time — with his high profile, global contacts and bona fides in Ottawa — to embark on a second career with the privacy he has never had as a politician.
But his lucrative exit package underscores the gap between the privileged and the hoi polloi. It reinforces the impression that MPs are more interested in being on the favoured side of the divide than narrowing it.
Critics generally hold their fire. Only the Canadian Taxpayers Federation, self-appointed enemy of government waste, monitors parliamentary pensions. It regularly inveighs against politicians’ platinum-plated pension plans.
The left is inexplicably silent. This is a social justice issue (although few advocates recognize it). It explains why every attempt to launch a parliamentary debate on income inequality has petered out; every call to align the interests of MPs with those of the people has gone nowhere. It demonstrates how proximity to the public purse alters people’s values. As head of the National Citizens Coalition from 1997 to 2002, Stephen Harper was a vocal critic of parliamentarians’ gilt-edged pensions. In the prime minister’s defence, he did trim parliamentary pensions in 2012 when he raised the age of eligibility for everybody else to 67.
Starting next January, MPs will have to wait until they are 60 to claim their pensions. By 2017, they will have to contribute 50 per cent of the cost of their pensions. (They currently contribute 15 per cent).
By requiring MPs to sacrifice, Harper insulated his government from a damaging public backlash over pensions. But he created a strong incentive for longserving MPs to leave. That is the backdrop of Baird’s decision.
None of this is meant to cast aspersions on the minister’s character or work ethic. He served the government well and played by the rules.
It is the rules that are wrong. They shield MPs from the economic realities Canadians face. They push the destabilizing gap between the rich and the rest to the margins of the national agenda.