An edited version of the following article appears in the Fall 2009 edition of The Taxpayer.

On September 4^th, 2009, an unnamed man near Windsor, Ontario (let’s call him, George) scratched his lottery ticket and won $1,000 a week guaranteed for the rest of his life. The ticket was part of the Ontario Lottery and Gaming Corporation’s popular “Cash for Life” contest.

However, as popular as the scratch game is, few Canadians realize that a different type of scratching – political back scratching that is – can actually be far more lucrative. You see, just a few weeks prior to George’s windfall, nine Canadians were appointed by Prime Minister Harper to Canada’s Senate; one of the most lucrative and relaxing government bodies in the country.

While the Ontario Cash for Life contest is quite popular, its winnings pale in comparison to the benefits of being a Senator.

Consider that while George’s weekly cheques add up to $52,000 each year, Canadian senators collect a minimum salary of $132,000 annually. In addition, while George’s weekly winnings remain constant at $1,000 per week for the rest of his life, a Senator’s earnings increases annually. In fact, a senator’s pay is tied to a complex civil service formula which has averaged 3.3% increases over the last 3 years. Beyond a Senator’s minimum salary, he or she can also qualify for additional pay based on added responsibilities. Not to mention, senators also enjoy expense accounts, free air travel and yes, even a pension plan.

If we stand back and look at the big picture, the numbers are mind numbing. If George and a Senate appointee both “won” their windfalls on their 30^th birthdays, and lived as long as the average Canadian (80 years), the senator would win by a country mile. According to CTF calculations, while George would bring in a not so insignificant sum of just over $2 million during his lifetime, the senate appointee would end up with a grand total of over $16 million.

While Canada has never seen a senator serve for 45 years, there is nothing under the current rules to prevent someone from doing so. The only rule that caps the amount of time one can serve in the Senate is the provision which requires a senator to retire by the age of 75. Assuming someone entered the senate today at the age of 30, his or her pay would rise to a whopping $570,000 by the age of 75; at which time an annual pension of $414,470 would kick in.

Alternatively, if a Senator wished to retire at the ripe age of 54, he or she would walk away with an annual pension of more than $202,900, growing every year for the rest of his or her own “Cash for Life” prize.

But what will the lucky nine new senators cost taxpayers? All nine appointees have publicly promised to resign their leather seats eight years from now and either retire or run for “re-election” – that is, if elections are allowed in their respective provinces by that time. If this is the case, the bill will come to a bare minimum of over $17 million for salaries and pensions alone. Again, that includes no additional compensation, perks, or the other office costs; let alone the Senate itself.

A gambler would be hard pressed to bet on their resignations in eight years. One can consider the excuses that would come forward:

• Continued failure to pass Senate reform legislation in either house, due either to continued minorities or a change in government,
• A future Liberal or coalition prime minister that refuses to ‘appoint’ senators from those elected by the provinces, even if reform legislation is passed, and
• The imbalance that would be created if only Conservative senators resigned to run for election, while all Liberals remained in their places.

One may then wish to hedge their bets and consider putting money on their staying right where they are until the mandatory retirement age of 75. If that is the case, the cost in salaries and pensions soars to $35 million.

While even the Roman Senate of more than 2000 year ago was more democratic than Canada’s in the 21^st Century, at least it didn’t cost the taxpayers of the empire quite so dearly.

$57,000/Year Golden Handshake for Senator Joan Cook

While Liberal Senator Joan Cook celebrated her 75^th birthday, taxpayers were mourning that they are on the hook for her $57,000/year pension according to calculations by the Canadian Taxpayers Federation (CTF).  Constitutionally forced to retire on her October 6^th birthday, the Senator will no longer have to carry the burden of writing our laws for which she was so legitimately chosen.

Should the good Senator live to the age of 85, grateful taxpayers will have doled out at least $593,000 in pension money for her service to the dominion.

Senator Cook was appointed on the advice of Jean Chrétien in March 1998, serving 11 years and holding several minor positions for which she was additionally paid.  The CTF calculated Cook’s pension based on an accrual of 4% for each year of service (nearly 11) multiplied by the average of her five most profitable years ($130,600), adjusted each year for scheduled increases.

But as Senator Cook blows out the candles, collects her birthday money and takes her last steps out of the Red Chamber, a shift is taking place.  Her retirement signals the Liberal Party losing its “official” majority in the Senate; creating a rare moment of “minority” balance of power (the Liberals still have the most seats).

While the prospect of undemocratic, reform-blocking Senators taking their leave is welcome news, it comes with a hefty price tag.

From the taxpayers of Canada, happy birthday Joan.

Cross Posted at taxpayer.com/blog

The Memorandum of Understanding (MOU) signed by Senator Mitchell outlines plans for the software to “link to the voter file to maintain data integrity.” The Elections Act clearly prohibits such a use by a Senator and a Senate Caucus. The voter list is only to be used for Members “communicating with his or her electors” and “soliciting contributions for the registered party and recruiting party members” (S. 110 (1) and (2)); neither of which is allowed by a Senator.

So unelected party bagmen need to track the voters who elected them?  I’ve heard stranger things coming from both houses of parliament in the last while, but this smells of the mildew under the red carpet.