In times of recession, no pay hike, perks for Canada leaders

Thursday, 27 November 2008, 04:57 Hrs
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Toronto: With Canada already in recession according to the Organization for Economic Cooperation and Development (OECD), there will be no pay hike and bonuses for its politicians and bureaucrats.

The government, which says it is time for belt-tightening for the nation's leaders and officials, has decided to deny extra perks, bonuses and pay hike to ministers, members of parliament and bureaucrats.

These and many more steps will be announced in the fiscal update Thursday.

The new measures include cancellation of a proposed three percent hike in pay scales of MPs. The raise would have given an extra $4,600 to each MP who currently earns $155,400 annually.

The government will restrict travel and entertainment expenses by leaders and bureaucrats. Members of the government and officials will also not be allowed to travel business class.

"In this time of belt-tightening, politicians have to be able to demonstrate to people that they are able to do that themselves," an official of Prime Minister Stephen Harper's office said Tuesday.

Meanwhile, a national research institute has warned that Canada - which has already entered recession as per the OECD report - may face a ballooning deficit of over $46 billion in the coming years.

While the OECD says Canada's economy will shrink by 0.5 next year and may start recovering only in 2010, the Canadian research institute has warned that recession may lead to a deficit as high as $46.3 billion in the coming years.

Though Canadian officials predict the deficit could reach a high of $14 billion in the next two years, the Canadian Centre for Policy Alternatives (CCPA) warns that the country could be headed for a much higher deficit.

"A major recession starting in the fourth quarter of 2008 and lasting through 2009 could produce deficits of $1.4 billion in 2008/09, rising to $27.9 billion in 2009/10, and $46.8 billion in 2010/11," warned the CCPA in a statement Tuesday.

"The federal government has a lead role to play in cushioning the impact of a recession, both through federal programs and in partnership with the provinces," it said.
Source: IANS
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