Chronic Double-Dipping

"I didn't go to the Senate to make money nor do I feel like I've made enough money that I can afford to do the job for nothing."
"If people think they can fulfil their jobs as senators and do other things, I don't think there's anything wrong with that. The truth about the Senate is that it sits 80 to 90 days a year. I simply, in my own mind, couldn't do justice to my Senate job Maybe some of the other senators feel they can manage their workload but I can't speak for them. I certainly haven't found it to be a part-time job."
Senator James Cowan, Liberal leader of the Senate caucus

"I find it very surprising that senators can sit on corporate boards."
"The demands of time are enormous and the due diligence requirements are such that it's questionable whether you can cover duties as both a corporate director and a senator."
Richard Powers, governance expert, Joseph L. Rotman School of Management, University of Toronto

"It's shocking. I think a reasonable person would conclude that this doesn't make sense. That a politician [who] makes laws can sit on the board of a company that is affected by laws. I think this has fallen through the cracks."
"It smacks of self-interest. Senators are named to boards to open doors and advance the interests of a company while getting paid by taxpayers and collecting directors' fees from shareholders. It's frankly outrageous."
"They were appointed because of their proximity to power, which is all the more reason to have a dividing line. Just the perception of a politician sitting on a commercial board is troubling. And the perception of a conflict is just as important as a real one."
Richard Leblanc, associate professor of law, governance and ethics, York University, Toronto

THE CANADIAN PRESS/Sean Kilpatrick   A view of the Senate chamber on Parliament Hill in Ottawa 

 

Senators are paid a basic annual salary of $132,200 for sitting in the Senate of Canada as appointed "sober-second thought" unelected politicians complementing the work of the elected Members of Parliament who sit in the House of Commons to do the work of Parliament on behalf of the citizens of Canada. It is, by any accounts, supposed to be a full-time occupation; a serious and important one meant to be of benefit to the country.

Yet over a third of the Senate members hold positions on either public or private boards of directors. And many of the senators simply carry on with the work they had done before being appointed and agreeing to accept the honour of sitting in the Senate of Canada. Some were doctors, lawyers, businessmen, journalists, social activists, and people who devoted themselves to political action on behalf of the parties they supported. All pledged to adhere to the work of the Senate.

When these people of influence in the Government of Canada also represent the interests of private companies whose businesses may impact in some way on government business and the senators are in a conflicted position they are supposed to recuse themselves and most probably do. On the other hand, there are those who will actively lobby for the business they represent by calling in senior public servants to overturn decisions that were seen to be inimical to the business they represent.

Most of the senators who derive additional income other than their generous enough salaries; some as consultants, public speakers, landlords, even farmers, are very busy people, obviously. And a goodly number of them sit on boards of directors for public and private companies operating in a wide range of industries including highly regulated sectors representing real estate, financial services, mining and energy, and more. For all his demurring, James Cowan was paid $243,992 for acting as secretary to the Halifax Airport Authority.

The Senate has its own conflict-of-interest guidelines, and they are notoriously lax; positions held outside the Senate are to be disclosed as additional earnings. "Is it appropriate for senators to be on boards? I say that is a very legitimate public debate", agreed Hugh Segal, Conservative senator, and himself representative of the more active outside business sources taken on by senators.

Mr. Segal added he resigned three corporate directorships, since joining the Senate because: "I wanted to make sure I had the time to do a proper job as a director and follow best practices and meet my primary responsibility as a member of the upper house."  "We're going to have to redo a bunch of the rules here", agreed Liberal Senator David Smith.

Among them, the dozen senators who are directors of publicly traded companies have earned in the last decade about $8.25-million for their troubles. Mr. Segal alone sitting on energy and financial boards has earned about $2.70 million in the eight years he has been in the Senate, through his additional interests other than the Senate. Senators have become "trophy" directors; high-profile politicians, highly esteemed and influential.

To be effective in his or her position as a director they are expected to devote hundreds of hours yearly to a public company, somewhat less to a private or not-for-profit. Chairing a board is more onerous respecting time obligations away from the Senate. Within the Senate senators are able to increase their annual salaries by sitting on committees and even more for chairing committees.

The question, simply put, is how honourably effective and dedicated to his/her work as a Senator can a busy individual be who has other commitments all vying for attention and detracting from the work in the Senate?

"If I'm a constituent of that senator, I would be concerned about whether that politician was serving me or the corporation. Are my interests being compromised because the politician is being paid by the corporation in directors' fees and other incentives, monetary or not that may be compromising?" asked Mr. Orsagh.