Departing P.E.I. MLAs receive thousands in severence

Prince Edward Island taxpayers will foot bill for more than $376,000 in payouts

Teresa Wright
Published on January 29, 2015

Wes Sheridan, Minister of Finance, Energy, and Municipal Affairs, delivers the 2013/14 provincial budget in the Legislative Assembly as Carolyn Bertram, Speaker of the House, looks on.

Severances to be paid to MLAs not reoffering in 2015 election:
Robert Ghiz - $68,721
Wes Sheridan - $68,721
George Webster - $68,721
Carolyn Bertram - $68,721
Gerard Greenan - $50,028
Olive Crane - $51,540

Taxpayers in Prince Edward Island will be paying out more than $376,000 in severance to Premier Robert Ghiz and the five other MLAs who have announced they will not run in the 2015 election.

And this amount may grow if more MLAs choose not to reoffer or if any sitting MLAs are defeated in the upcoming provincial election.


That’s because every elected MLA in P.E.I. is entitled to severance pay when they exit office, regardless of whether they are booted out in an election defeat, if they resign or if they simply choose to exit politics.

There is a cap on the amount paid in severance to each MLA, equal to the base pay for all elected members at the time they leave office.

Ghiz has been in office for 12 years, so he will receive the maximum severance amount of $68,721 when he resigns next month.

Finance Minister Wes Sheridan, Deputy Premier George Webster and Speaker Carolyn Bertram, who have announced they will not run in the upcoming election, will also receive this $68,721 maximum severance.

Summerside-Wilmot MLA Gerard Greenan will receive a little less than his caucus colleagues when he too retires from politics, since he is not in cabinet. But he is a member of one of the executive council committees, so that helps top up his severance to $50,028. Independent MLA Olive Crane will receive slightly more than Greenan at $51,540, with more time in office.

MLAs in P.E.I. are entitled to one month of pay for every year they have been elected. This is calculated based on the salary the MLA has at the time they leave office or an election is called. From the way the legislation is worded, it appears there is almost no way for an MLA to leave the P.E.I. legislative assembly without getting a generous severance package.

That’s something the Canadian Taxpayers Federation would like to see changed. Kevin Lacey, Atlantic director for the federation, says he believes MLAs should be only be entitled to severance if they are defeated in an election.

“A politician should be entitled to severance, especially if they are defeated. The issue here is, first, that they are entitled to severance if they quit and second, the sheer richness of the severances.”

These severance packages are paid out on top of the pensions MLAs earn while in office, which are also almost wholly funded by taxpayers.

“They’re getting gold-plated MLA pensions, so the two of them make for a very, very rich plan and plans that average taxpayers who are paying for these plans largely don’t have,” Lacey said.

In New Brunswick, MLA severances are capped at six months of their annual base salary, compared to P.E.I.’s full year cap. N.B. MLAs can also only collect one month’s severance if they are eligible for their MLA pension when they leave office.

P.E.I. should change its severance package to reflect New Brunswick’s, Lacey said. P.E.I. should also disallow any severance payments to MLAs who leave office only to be re-hired as staffers or appointed to government boards or agencies, he added.

For example, former Innovation Minister Allan Campbell was defeated in the 2011 election, and was eligible to receive a severance of approximately $37,010. He was promptly hired after that election as Ghiz’s chief of staff, at a salary range of between $121,014 and $133,741 a year.

“The severance is intended to help you transition from being an MLA to getting a job. What it’s not intended to do is pay out a bonus only for you to collect another government cheque in a few weeks’ time,” Lacey said.

“It defeats the whole purpose of severance and severance shouldn’t be allotted for that.”

Since 2007, P.E.I. taxpayers have paid a total of approximately over $1.6 million in severance to defeated or retiring MLAs.

No one from government would comment directly on this story. All figures quoted were calculated and compiled by The Guardian using information available on the P.E.I. government website.