I had already drafted this blog post on how I think politicians should be paid when I read this article in today's Globe and Mail on how Toronto councillors turned down this year's increase. Way to go Toronto! If you want to avoid attracting skilled people as your future councillors, this is exactly what you should be doing.
We need good people as our elected officials. Highly educated and intelligent people are able to command high salaries as a reward for skills that are in high demand, responsibility for managing a large enterprise or in compensation for extended periods of education where they received low pay and may have amassed high debts (e.g the medical profession, or university professors).
High achievers, however, are unlikely to want to run for public office because in general they will have to take a pay cut that will severely impact themselves and their families. Accomplished people in addition have to consider the stress of public life; the exposure to ridicule, the risk of not being re-elected, and in the case of our provincial and national leaders, the need to travel to a distant parliament and potentially live away from their families for long periods.
Taken all together, this argues for our political representatives receiving far higher pay than they have right now. I would argue that a city councilor in a big city like Toronto or Ottawa should command a salary on the order of $150,000 per year, whereas they currently typically receive less than $100,000. A member of a provincial or federal parliament should command somewhat more because of the need to be away from home so much (perhaps $160,000 + and an extra $5000 for every 1000km that the farthest point of their electoral district is from the Parliament). After the above reform, political salaries should then just be indexed to the lower of a) the cost of living, and b) the average increase in the civil service or city staff. Laws should then be passed that would make it very difficult to meddle with the salaries in future.
I am not opposed to a zero-percent increase for politicians some years, if that is what the staff are getting, and if the base salary is already at a reasonable level. The problem is that it is ridiculous for full-time politicians to be routinely paid less than senior people in the agencies that the politicians ultimately govern.
Stipends above the base salaries for executive politicians (ministers, mayors, etc.) should probably be performance-based. There should be a reduced or no stipend if certain measures are not acheieved, such meeting zero-deficit targets, service levels, unemployment levels, etc.
It is considered unethical in many professions to systematically under-price skilled services. The Code of Ethics of Professional Engineers Ontario (of which I am a member) makes it clear that the principle of adequate compensation must be upheld. Adequate compensation not only attracts and keeps accomplished people, but helps command respect for the profession. This does not mean that altrusitic or bro-bono service is forbidden, just that it shouldn't become the norm for basic work of the profession.