Ottawa’s $500,000 club

Who makes the most in the public service? John Geddes reports


 

Adrian Wyld/CP

Who among the top federal economic policy-makers has the highest salary? If you guessed Finance Minister Jim Flaherty, you’re not very good at this game. Cabinet ministers earn just $236,900. A shrewder pick might have been the new Bank of Canada governor, Stephen Poloz, who earns between $431,800 and $507,900 (the federal government discloses only pay ranges for top public servants). But it is not he. Nor is it any of the most powerful departmental bureaucrats, such as the deputy ministers of Finance and Industry, whose base salaries are no more than $319,900, although bonuses can lift that over $450,000.

Stumped? Don’t be too hard on yourself. Even among Ottawa insiders, few would be aware that two officials running a tiny agency Flaherty set up to try to create a national securities regulator beat them all. Douglas Hyndman, chairman and chief executive officer of the Canadian Securities Transition Office (CSTO), makes $534,043, and Lawrence Ritchie, the CSTO’s executive vice-president and senior policy adviser, $537,469. Their salaries are public because Hyndman is on long-term loan to the feds from the British Columbia Securities Commission, while Ritchie is similarly seconded from the Ontario Securities Commission, and both B.C. and Ontario publish “sunshine lists” of salaries over $100,000. They are still technically on the provincial payrolls—even though they’ve been working for Flaherty since 2009—with Ottawa compensating their home provinces. (The Harper government’s refusal to support Alberta MP Brent Rathgeber’s private member’s bill to publicly disclose federal salaries over $188,000 led to Rathgeber quitting the Tory caucus last spring; the government wanted to reveal only a handful of salaries over $444,661.)

At a glance, their pay seems out of whack by federal standards. After all, Hyndman and Ritchie together oversee only about 20 employees. Poloz, by comparison, commands about 1,240 at the central bank. But Flaherty has staked more on his high-priced ringers than the size of their shop might indicate. In an email exchange with Maclean’s, Hyndman said his “relatively small staff” belies the complexity and importance of what the CSTO is trying to accomplish. “We are using the expertise of a core group drawn from provincial securities regulators, plus some additional staff, to develop critical improvements to Canada’s system of capital markets regulation,” he said. “We also need to maintain the flexibility to move forward on either federal legislation or a co-operative scheme with the provinces.”

That last part about being ready to pursue either of two very different policy options is key. Flaherty set up the CSTO back in 2009 to bring about his goal of establishing a common Canadian securities regulator, replacing a hodge-podge of provincial stock market commissions. But some provinces challenged his plan in court. In late 2011, the Supreme Court of Canada ruled that Ottawa was overstepping its jurisdiction. Despite that severe setback, Flaherty kept trying to coax provinces to come onside voluntarily—that’s the “co-operative scheme” Hyndman mentions. But if those overtures to the provinces fail, the court ruling left the federal government room to regulate in limited areas on its own—that’s Hyndman’s “move forward with federal legislation” option.

In fact, indications from federal officials suggest they are not optimistic that enough provinces will sign on to salvage Flaherty’s original grand plan. For instance, Hyndman said the CSTO’s “primary focus right now is developing proposed legislation and implementation plans that will be needed if no agreement is reached with provinces on a common regulator.” But exactly what parts of the financial marketplace the federal government will set out to regulate on its own has not yet been announced. It’s the subject of considerable speculation among private-sector experts. Flaherty’s office says the aim would be “preventing and responding to systemic risks, such as those posed by over-the-counter derivatives.”

Figuring out ways to regulate trading by sophisticated investors in derivatives, which go by exotic names such as “currency forwards” and “credit default swaps,” is a hot topic in international policy circles, largely because failures on this murky side of the market are blamed for the 2008 global credit meltdown and the recession that followed. Hyndman even suggests that losing the Supreme Court case focused the federal government’s attention “precisely where Canada needs to do a better job to get regulation right.”

Whatever slice of the market Flaherty decides to tackle, settling on that approach shouldn’t take much longer. “Our planning horizon is in months, not years,” Hyndman said. On whether he and Ritchie will go back then to their provincial jobs, or stay on to run an agency set up to bring new regulations into force, he said only, “We have not sought, nor been offered, permanent federal positions.”

line:


Pay scale

The annual salary of two policy advisers is twice that of their boss, Jim Flaherty

LAWRENCE RITCHIE
Executive vice-president, Canadian Securities Transition Office (CSTO)
$537,469

DOUGLAS HYNDMAN
Chairman and chief executive, CSTO
$534,043

STEPHEN POLOZ
Bank of Canada governor
$431,800- $507,900

JIM FLAHERTY
Finance Minister
$236,900


 

Ottawa’s $500,000 club

  1. This is simply their wages. What is their total cost of employment to the Canadian public?

    • A lot more. Those diamond studded platinum pensions and life long juicy benefits….and thats before we get to unadjusted expense reports and any insider trading that might be going on.

  2. According to this blogger, whose accuracy I cannot vouch for – Mr. Hyndman was fired by Christy Clark in 2012.

    waterwarcrimes.blogspot.ca/2012/06/premier-chrysty-clark-fires-head-of.html

  3. Way back when I was a public sector employee, if we went on secondment we did not get both salaries. Are these people double dipping?

    • Yep, some get city, provincial and federal benefits.

  4. Any females earning these salaries?

    • Out of the 3 listed here or unrelated to article?

      • Out of all the big income earners in top civil service positions with the government. My point is that esp in the finance sector, the old boys will only allow men to occupy these positions. The three names listed here are all male and the subject line of the Macleans email read “Top-job dudes in the civil service”, so I guess they are mostly “dudes” who get the privilege of holding these positions and no one from the other 50% of the population.

        • It’s 3 positions… There’s a lot of other demographics unrepresented, save your ‘rah rah feminism’ for other things.

          • It’s a valid point F1-but clearly one that’s touching on some prejudice you hold. Thanks for the dismissive flippant comment. What rhymes with pisogynist…

          • It’s not, when I was here there were 3 comments, one of them this. It just seemed like a redundant question, when the answer was obvious and has little to do with actual equality then the lay of the land. If you showed me a list of executives who were males compared to female executives, or world leaders, or something more ‘hearty’, I’d buy into it. But we’re talking about three people, not a very big sampling size for any sort of demographic drawing. But hey, what rhymes with swooshdag? Thanks for trying to make me appear sexist though, because I can see the forest in the trees and you’re hung up on equality every step of the way. Learn to let loose and relax, you may find yourself at east a bit more and not so worked up over making dumb comments.

          • yes your comment is dumb. I should ignore it.

          • In particular, the whiny affirmative action activist blog commenter population seems under-represented.

        • A hidden requirement of the job is scotish rite or Harvard free mason. Women are not allowed unless they are corrupt like the IMF chairwoman. You get jobs like these as they “trust” you to keep dirty secrets.

        • Should a female get one of these jobs simply because she is female?? Name female replacements from the available people that qualify… or is that unfair?

    • Probably not as most are probably free masons.

  5. A salient point to me would be; what were they paid in their previous jobs?

    • Prior to going to the OSC, Larry Ritchie was a prominent lawyer at one of the biggest bay street firms. There is no question he took a significant pay cut to work for the OSC and CSTO.
      I take no position on whether he is worth the money, but he could definately be making a lot more money in the private sector.

      • if he can afford a pay cut to $500K, he can afford a pay cut to, say, $200K. I don’t care how much anyone in private business makes. Anything they earn is the product of consensual transactions. Any salaries paid by govt. are distributed from a pool of confiscated funds. Thus, there need to be well defined limits placed upon the earnings of public employees. I like a number no greater than 2.5 or 3 times the average or median Canadian household income, including benefits. Somewhere well below that would be a threshold whereby the public purse no longer contributes to that individual’s pension, as well. This would go a long ways towards reducing public sector careerism, which adds to the overall cost of government without adding any value to the taxpayer.
        Every government computer monitor should have a little sign over the top of it, reminding the user that, if they want to earn more money, get a job in the private sector, because if the taxpayers don’t want to pay you more, they don’t have to pay you more.

        • if you want someone competent you have to compensate these people at their market rates even if it seems high. Otherwise, you get incompetent people, who in high positions can cost taxpayers a lot more in waste and stupidity than their relatively small salaries..

  6. What more proof that you need that gross incompetence, idiocracy and BS pays very well?

    And all they do is lie about inflation, you get less value incomes and less value money while they get whopper sized raises? You might not even have a pension, but you bailout their pensions. You are slaves to these people as not one option on he ballot for less government.

    While they can steal one job to give one to someone else, in the big picture government cannot create wealth, they can only dilute it for money print for debt, confiscate it in taxes from one person to patronize another buddy or vote buying scheme.

    Everything they say and do is a sales pitch to convince the people all this BS is needed ad somehow does something good. When in fact 99% what they do is tax you and sell you out for lobby driven buddy bank and buddy bailouts. Deception is their primary game, feed us BS and use the tax system as modern day slavery.

    These peoples have one objective. Deceive us for our money so government and the back room always wins.

  7. What part of “public service” is so hard to grasp? If these people are worth $400k-$500K in the private sector, then they will easily be able to earn that when their public posting is complete. If they are not worth that much in the private sector, they’re certainly not worth that kind of money to us. For those very reasons, then we taxpayers have every right to expect that they will tackle these projects for considerably less money. If these projects are truly necessary and of lasting value, then it should be expected that these people will lend their services not for free, but at a level of pay considerably less than what they might actually earn in the profit making sector. It’s not called “public service” for nothing.
    If these projects are actually worth doing, then they are worth making an individual sacrifice for. If they’re not worth doing, they’re certainly not worth paying a half mil for. On the flip side, if we can’t find highly knowledgeable and highly skilled people willing to make a substantial personal sacrifice in order for these initiatives to proceed, then we need to ask if we should undertake them in the first place.
    The bottom line is still a simple one: There is no job any where or any how in the public sector that is worth even $300,000 annually, let alone $500,000.

  8. this article only tells half the story, what about travel expenses and other miscellaneous things that are certain to be eaten up and paid for by the tax payer?

  9. I’d like to know why David Johnston is on Ontario’s sunshine list for 2011 ($610,506.04 as the President and Vice Chancellor of the University of Waterloo) if he became Governor General in 2010? Johnston’s replacement at the University of Waterloo received more than $500,000 in salary and benefits for the same year!

  10. This is the group that keeps the minimum wage and poverty at the current level.

    “Do not move it – they say, only raise our income!”
    Canada is a deeply fragmented society – socially, financially.