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October 4, 2007

Error in MLA Pay Index

In the rush to pad their pay, did the Campbell government make a drafting error? Will the Legislative session that begins October 15th fix that error?

The legislation that gave the Premier a 54% pay increase and ordinary MLAs a 29% increase, also provided for annual indexing with language that doesn't match the way the consumer price index is calculated or is published:

2 (1) Subject to this section and section 10, effective April 1, 2007, the basic compensation for each member is $98 000 per year.
(2) The basic compensation referred to in subsection (1) must be adjusted every year on April 1, commencing April 1, 2008, by the percentage increase of the consumer price index, if any, for the 12-month period ending on December 31 of the previous year.

The consumer price index isn't available for a specific date such as December 31st; it is available by month. Statistics Canada's website on the index says:

"Reference period: The reference period of the CPI is the month associated with a specific level of that index with a given time base. For example, the All-items CPI for Canada for the month of May 2007 is 112.1 (2002=100)."
"Collection period: For most products, the first three weeks of the reference month."

The indexing formula for MLA pay can be compared to the indexing formula for the Canada Pension Plan where the legislation refers to a date, October 31, but explains that the Pension Index is average of the twelve months of the Consumer Price Index ending with that date; it doesn't refer to a nonexistent index for a specific date or period.

The language in Bill 37 (2007) could have said "The basic compensation referred to in subsection (1) must be adjusted every April 1, commencing April 1, 2008, by the percentage increase in the December consumer price index of the previous year relative to the prior December consumer price index", or it could have referred to the average of the twelve monthly indices (the annual index) for the period ending December 31 relative to the average for the previous twelve months. One could argue about what the Legislature meant, but the Legislature should have said what it meant rather than leave it open to interpretation.

Given the ambiguity, an interested party, say the Taxpayers Federation, could apply for an injunction to stop the MLA's pay from being adjusted in April 2008. Alternatively, the Campbell government could use its Legislative majority to force the adoption of an amendment to their money grabbing legislation. Of course, they could also simply ignore the drafting error, use their interpretation and laugh all the way to the bank. The fairest solution would be to abandon the indexing and promise not to increase their pay until sometime after the minimum wage is increased and indexed.


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