Residency requirements put senators in an impossible position

During the last several months, critics have increased the interminable attacks concerning the legitimacy of the Senate with unctuous anger over alleged inappropriate reimbursement to some Senators.

When that herd of independent thinkers known as critics and pundits come together to agree on any subject - and especially the Senate - people who are analytical and empirical should run, not walk, to the nearest computer or library and examine public empirical data.

We must first situate the Senate in the larger context of federal spending in Canada. According to the 2012 Report of the Auditor General of Canada to the Standing Senate Committee on Internal Economy, Budgets and Administration, "For the 2010-'11 fiscal year, the budget for the operations of the Senate, including Senators' salaries and allowances and the Administration, was about $93 million."

In 2010-'11, the Government of Canada spent approximately $250 billion. Therefore, the entire Senate cost about one-third of one-10th of one per cent of all federal spending. Critics are getting their knickers in a knot over infinitesimally tiny amounts of public funds.

But it will be argued, this argument does not address the decline in integrity and confidence of citizens in public institutions occasioned by the alleged inappropriate reimbursements.

There are two issues currently at play in this debate over housing allowances. First, is the issue of who meets the criteria for a Senate appointment and secondly, how senators should be compensated for maintaining two residences. To address these issues, we must review the original foundational rules in the Constitution that govern the appointment of Senators.

Pursuant to s.23 of the Constitution Act, a senator must be over 30 years of age, own property worth $4,000 more than the sum of his/her debts, must be a Canadian citizen and must be a resident of the province from which s/he was appointed.

However, as the recent Deloitte report into the current expenses scandal involving three senators, noted, as have others, there is no definition provided that determines residency.

It was presumably for this reason that the 1998 Blais Commission study, "Supporting Democracy" (five commissions and three independent reviews preceded the Blais Report) concerning the compensation and reimbursement of parliamentarians, attempted to establish a rule grounded in the distinction between primary and secondary residences of senators for the purposes of reimbursement of expenses.

However, these distinctions are as meaningful as attempting to determine which leg is primary and which leg is secondary. The current rule suggests the left leg of a person is vastly more important than the right leg - so long as the left leg is designated as the primary leg of the human being.

Medieval theologians would approve of these arcane indicators. Did the senator fly direct to the home province or did the senator route through Toronto? Does the senator have a driver's licence in that province? Health card? How often did the senator stay in the province of appointment? Did the senator make sufficient phone calls from that province?

Beyond the remarkable invasiveness that no pundit would support if applied to ordinary Canadians, this rule ignores the physical location of the House of Commons and Senate. Restated, neither the House of Commons nor Senate allow virtual voting or proxy voting. This means that an MP or senator must be in Ottawa to vote. And to be in Ottawa to vote, MP and senators must live somewhere nearby. In the vernacular, the Senator must have a residence.

Actually, the Senator must have two residences due to the constitutional requirements cited above.

Indeed, in support of the argument that de facto, every Senator must maintain two residences, the Senate Calendar reveals that in 2013, the Senate will sit from the last week of January to the end of June and from September to December. When we remove the various breaks, the Senate will sit - in Ottawa - for 29 weeks of 52 weeks or 56 per cent of the year, excluding committee hearings held when Senate is not sitting.

These numbers reveal the residency rule and the Senate attendance rules - if taken literally - cannot both be met. A senator cannot be a "resident," narrowly defined, of his or her province - using the typical six-to-eight month minimum residency required for provincial health insurance - and yet attend all the Senate sessions for seven-eight months in Ottawa.

Moreover, we can now, finally, recognize what should be overwhelmingly clear. Every senator (and MP) must maintain two residences - owned, rented or leased - if elected from or representing any place other than Ottawa.

A resolution is now in sight. The Senate rules should be reformed to recognize the reality that senators must maintain two residences - one in Ottawa and one in the province from which they were appointed (excluding those appointed from Ontario or Quebec who were previously domiciled in the National Capital Region).

The Senate can learn from universities which long ago developed the concept of an "honorarium" or "stipend" - whereby the university provides less than full compensation for the activity in question. Likewise, the Senate should develop a "dual residence" honorarium for senators of a specified annual amount - based on Statistics Canada average living expenses - that requires no receipts as it will be for an amount less than what is actually spent. Yet, it will provide generous but not full compensation for the maintenance of a second residence.

These reforms will eliminate future manufactured crises concerning Senate housing allowances.

Ian Lee is a professor in the Sprott School of Business at Carleton Universtiy and a former banker trained in fiduciary responsibilities.