After years of promises, P.E.I. MLA severance packages to be reviewed in 2021

More than five years after it was first promised by the province's previous Liberal government, P.E.I. will have an independent review of severance packages for MLAs in 2021.

The Canadian Taxpayers Federation refers to the province's severance packages as "golden parachutes" for outgoing MLAs and even the leader of the Opposition says severances are at times "too rich."

Under the current plan, outgoing MLAs receive one month's pay at their current salary for every year of service, up to a maximum of one year's base salary — currently $74,394.

That severance kicks in no matter why the MLA leaves office, and regardless of whether they're eligible to receive a pension upon leaving under either of the province's two MLA pension plans.

Opposition leader Peter Bevan-Baker has been calling for a review for years. He pointed to recent examples of MLAs choosing to step away from politics after winning a new mandate.

"And yet they receive a large severance. I have a problem with that," said Bevan-Baker. "I think there has to be a level of realism there… there were aspects of this that I think are too rich or perhaps not nuanced enough, not subtle enough in their qualifying criteria."

Most recently, Liberal MLA Robert Mitchell was eligible for the maximum severance payment of $74,394 when he stepped down in September. Mitchell served for 13 years, first elected in 2007.

Severance around 2019 election cost $721,894

Another 12 MLAs who either didn't run for re-election or lost on election night were entitled to a combined $721,894 in severance in 2019, according to CBC's calculations.

In New Brunswick MLA severance packages max out at six months' salary, and if MLAs resign or are eligible for a pension upon leaving, the maximum is one month.

In Nova Scotia outgoing MLAs receive a transition allowance similar to the severance available to Island MLAs, but if a Nova Scotia MLA qualifies to start receiving a pension when they leave office they're not eligible for a transition allowance.

P.E.I.'s severance rules for MLAs used to be written into law, but that ended when a new Legislative Assembly Act was passed during the recent fall sitting of the legislature.

Now the province's Indemnities and Allowances Commission has been put in charge of severance for MLAs. That's the same arm's-length body that sets MLA salaries.

In a brief report tabled in the legislature after the sitting ended in December, the commission wrote that it has accepted responsibility for determining severance allowances and that until a review is complete the old formula will remain in effect.

Under Wade MacLauchlan, the previous Liberal government promised in its first throne speech in 2015 to review MLA severance packages, and made the same commitment a year later, but no review ever took place.

"This review is long overdue and is a step in the right direction to ensure taxpayers aren't forced to pay for golden parachutes for their MLAs," said Renaud Brossard with the Canadian Taxpayers Federation. "We look forward to seeing the panel's recommendations and hope its members will err on the side of protecting taxpayers, not MLAs."

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