North Analysis

Are N.W.T. MLA salaries relevant in union talks? Depends who you ask

N.W.T. MLAs are among highest paid in Canada, pay includes non-accountable, non-taxable allowance

Richard Gleeson - CBC News

October 06, 2017

A two-year wage freeze by N.W.T. MLAs is set to expire in April of 2018. (Mitch Wiles/CBC)

The impending expiration of a wage freeze MLAs imposed on themselves two years ago, and the lack of any move to extend it, has fired up workers in collective bargaining negotiations with the government. 

The looming expiration of the freeze was the topic of a closed-door conversation of the group of MLAs who oversee operation of the legislative assembly. In a press release issued the day after CBC reported on that discussion, the chair of the group, Speaker Jackson Lafferty, said that MLAs gave no instructions and took no decisions on the wage freeze.

If MLAs give no instructions or take no decisions on the freeze, it will expire and automatic consumer price index increases will resume starting April 1, 2018.

Northwest Territories MLAs are not the only ones in Canada currently under a wage freeze. Members of the Ontario provincial parliament have frozen their wages since 2009, and New Brunswick MLAs haven't had an increase since 2008.

In many provinces, wage increases are not automatic, but tied to the financial performance of the government or provincial economy.

'It's dominating the meetings'

In an interview with CBC, the clerk of the legislature said CBC's story had incorrectly linked the discussion of lifting the freeze to current collective bargaining negotiations.

"It's erroneous to create a link between the two," said Tim Mercer. "The decision that the MLAs made with respect to their own salaries has no relation whatsoever to collective bargaining."

However, according to Todd Parsons, the president of the Union of Northern Workers, thousands of government workers being asked to take no wage increases for two years and one per cent in the third and fourth years disagree.

Parsons said the pending lift of the salary freeze was the number one topic of conversation at meetings in Inuvik this week with Northwest Territories Power Corporation workers, who he says are considering a strike vote.

Todd Parsons, president of the Union of Northern Workers, says that talk of the ending of the MLAs' wage freeze is 'dominating our meetings.' (CBC)

"They're raising the issue that all of the members of the legislative assembly enjoy wage protections that are not being offered to workers," said Parsons. "It's in the forefront of their thoughts. It's dominating our meetings."

Parsons noted that neither the government nor the workers want to strike, "but what this has done has riled up the members.

"They're going to stand up and they're going to fight," he said. "This government is making it easier to get a high strike mandate out of the group that we're polling, which is the Northwest Territories Power Corporation."

Parsons speculated that the MLAs instituted the wage freeze thinking that by the time it expired the government would have reached collective agreements with the three groups of workers they are negotiating with — GNWT employees, Northwest Territories Power Corporation Employees, and Hay River Health and Social Services employees. None of the three are close to being settled.

All MLAs collect more than base wage

The wage freeze is expiring at a time when a regular review of MLAs wages and allowances is about to begin.

The last two reviews, conducted in 2010 and 2014, found that MLAs' base wage, which now stands at $103,851 annually, is one of the highest in the country. But every MLA makes considerably more than that.

All MLAs get paid annual northern allowances, ranging from $3,450 for MLAs living in Yellowknife to $17,979 for Frederick Blake, who lives in Tsiigehtchic. Nunakput MLA Herb Nakimayak briefly collected the highest northern allowance of MLAs — $25,539 — but moved from Paulatuk to Yellowknife after being elected.

MLAs living in northern and remote areas of B.C., Ontario and Alberta get no northern allowances.

In addition to the extra pay the premier ($78,896), cabinet ministers ($55,583), and the speaker ($45,203) collect, all regular MLAs collect extra pay.

For example, with allowances and his pay as deputy speaker, Hay River North MLA R.J. Simpson makes just over $131,000 annually. Blake makes slightly more than $141,000. Yellowknife MLAs Julie Green and Kevin O'Reilly each get paid $118,025.

Non-taxable, non-accountable allowance

Included in those totals is a controversial non-taxable, non-accountable expense allowance all MLAs collect in their bi-weekly pay.

The allowance amounts to $7,484 annually for Yellowknife MLAs and $14,968 for all other MLAs. With the exception of this year and last — the years covered under the wage freeze — it also automatically increases with the cost of living. The allowance is not taxed as income and, because MLAs are not required to account for it, they can spend it on whatever they want.

Northwest Territories legislators have ignored repeated calls in independent reviews to do away with the allowance. The 2010 review of members' indemnities said that "it is easy for an MLA to pocket this allowance without using it for its intended purpose and that begs the question of whether this should be regarded as part of an MLA's indemnity and taxed as income."

In the 2014 review, the allowance was referred to as "neither accountable nor transparent and is often perceived as a misuse of public funds."

MLAs originally gave themselves the allowance to cover incidental expenses such as buying coffee and meals for constituents, buying raffle tickets for community fundraisers, and donating to community organizations. It comes in addition to constituency work allowances ranging from about $80,000 annually for Yellowknife MLAs to $95,000 for the Nunakput riding.

The only other jurisdictions in Canada with non-taxable, non-accountable expense allowances are Yukon and Quebec.

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