MPs not running again will get paid around $1.6 million in severance

Members of Parliament who have decided not to run for re-election this fall will cash in a cumulative $1.6 million in severance payments, and millions more will likely be paid out after the election.

Thirty-nine sitting MPs have declared they won't run again in the next election, of whom 18 are eligible for severance payments totalling an estimated $1,618,850, according to an analysis by The Canadian Press.

Sitting MPs who have served for less than six years are not eligible for pensions, and instead receive a lump severance payment worth half their annual salary. They also get back any pension contributions they've already made, plus interest.

Members who have served for more than six years but are under 55 years of age, and thus not immediately eligible for pensions, will have that pension deferred and can take severance pay at a rate similar to their rookie colleagues.

The standard salary for MPs currently sits at $178,900 for 2019, meaning most sitting MPs receiving severance will walk away with just under $90,000 — money that gets paid even when they choose not to run.

Some MPs who hold higher offices are eligible for more money: the retiring Liberal MP Pamela Goldsmith-Jones, for example, is a parliamentary secretary and should receive about $9,000 in additional severance.

The total doesn't include three Independent MPs — former Liberals Hunter Tootoo, Darshan Kang and Raj Grewal — who have not announced whether they will run again. Each would receive $89,450 if they do not re-offer, boosting the total to almost $2 million ahead of the election.

The amount of money set to be paid out to retiring MPs is just a first wave. The total is set to skyrocket after the election, when MPs who lose their races and are not eligible for pensions will also get golden handshakes.

It's difficult to calculate exactly how much will be paid out in October, since it depends how many MPs who have served less than six years or MPs younger than 55 years old are defeated. But the average severance payment will likely be higher than for the MPs who definitely aren't running. That's because most MPs already set to receive severance are backbenchers, while those defeated in the coming election may include cabinet ministers and others with boosted pay because they have additional duties.

There are 24 cabinet ministers (out of 35 total members, counting Prime Minister Justin Trudeau) who are rookie MPs elected in 2015 and will be eligible for $132,200 in severance pay if they are defeated in the fall.

After the 2015 contest, the Canadian Taxpayers Federation estimated a total of $11 million in severance payments had been paid out to retiring or defeated MPs.

Aaron Wudrick, executive director of the group, said severance payments for MPs were questionable because being a member of Parliament is less like holding a normal job and more like fulfilling a fixed-term contract.

Since MPs know the terms of the job going in and the idea of job insecurity is baked in, he said it might be reasonable to get rid of at least some of the severance.

"If you get another contract, that's great," Wudrick said. "But you can't claim you didn't know there was a risk you weren't going to get rehired."

"There are ways to plan for post-MP life," he added.

And if we're looking to make the admittedly "taxing" job of being an MP more attractive to people, Wudrick said, we should be investigating some key non-monetary changes, like eliminating Friday sittings to ease cross-country commutes for some members.

As it stands, Wudrick said, MP severance payments are comparatively generous. The Employment Standards Act in Ontario, for example, guarantees one week's worth of pay for every year served, though arrangements vary from province to province and company to company.

Employees of MPs get a guaranteed two weeks' worth of severance for their first year of work, and one week for each subsequent year, to a maximum of 28 weeks.

If an MP serves four years and retires with a severance payment, he or she would be receive around eight weeks' pay for every year worked.

Duff Conacher of Democracy Watch, an ethics watchdog, said MPs should put the whole package of compensation to an independent commission, and that group should determine the severance payment for MPs by comparing it to similar jobs outside politics.

He also suggested different MPs might get difference packages. A minister, who is more likely to be able to find lucrative work after politics, might receive less severance, not more, Conacher said.

Different levels of severance could be determined based on factors like seniority or the relative safety of an MP's seat, he said, which, though difficult to calculate, would be better than a "blanket rule" that is currently already generous, he said.

Some MPs might genuinely need the money to tide them over until they find new work, he said, but "if you're in a safe riding, you have a lot of job security."