June 7, 2010 10:24 am

Parliamentary perk subsidizes MPs’ entry into Ottawa housing market

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OTTAWA – A little-known perk for members of Parliament lets them claim $10,000 a year toward the cost of buying a second home in the Ottawa area, effectively subsidizing their entry into the city’s rising housing market.

A review of property records by the Ottawa Citizen and the Halifax Chronicle-Herald found 21 MPs – including eight cabinet ministers – from outside the National Capital Region who own residences in Ottawa, either directly or through family members.

Together, these MPs and their families have paid $6.2 million for property in Ottawa that is now likely worth far more. Many own condominium units on a popular downtown street, a short walk to Parliament Hill.

House of Commons rules allow MPs to claim a daily rate of $28.85 for "secondary residence expenses," or $10,530 for a full year. The rate increases with inflation.

But which MPs actually claim the costs of their Ottawa homes is secret. The House does not make public the list of MPs with secondary residences and it is unclear which ones count their homes in Ottawa as primary addresses. Local Ottawa-area MPs are not eligible to claim the allowance.

The allowance could in many cases save taxpayers money. MPs who stay in hotels when the House is sitting could run up higher bills on their House of Commons budget.

An MP who paid $100 a night for a hotel every day the House sat last year would have run up a bill of $12,800. And those who rent apartments instead of owning could charge up to $25,000 annually.

But the daily rate paid to MPs for owning a home allows them to accumulate equity in local properties, paying down the cost of property taxes, condo fees and utilities, while the value of their investments rise.

Former Alberta Conservative Bob Mills bought a $133,000 downtown condominium in 1994 when he served as a Reform MP for Red Deer, Alta. Mills later transferred the unit to his holding company then, in 2008, sold it for $260,000 to the wife of his successor, Conservative MP Earl Dreeshen, nearly doubling his money.

Dreeshen said he now collects the $28.85 daily subsidy to help pay for the home.

Saskatchewan Conservative MP Maurice Vellacott said he also collects the allowance for a home in the Ottawa suburb of Orleans he co-owns with his wife. He claimed $9,352 for 10 months in 2008-09 fiscal year, an amount he said is "significantly less than the total cost of downtown hotels or apartment rental annually for an MP."

Toronto Liberal MP John McKay said he comes out behind on the condominium his wife owns downtown. He said the monthly allowance doesn’t even cover condo fees and property taxes that add up to about $900 per month.

"I lose money on it every year," he said. "I think it saves the government immense amounts of money."

McMay said he still prefers to own the place he lives in. "I’m just old-fashioned."

The Ottawa Citizen and Halifax Chronicle-Herald contacted MPs who own Ottawa real estate but only a few were willing to say whether they claimed the subsidy. An e-mail sent to Conservative MPs by a party staffer on Friday said the Prime Minister’s Office did not want them to respond to questions about their homes. That evening, a PMO spokesman denied the e-mail was a gag order and offered to arrange interviews with party MPs.

Among the other MPs owning property in Ottawa are:

– Citizenship and Immigration Minister Jason Kenney, who last year paid $530,331 for a condominium a few blocks from Parliament Hill.

– Environment Minister Jim Prentice and his wife, Karen, paid $500,935 for a unit in downtown Ottawa. A spokesman for Prentice confirmed he claims the allowance.

– Finance Minister Jim Flaherty paid $210,000 for a condo. There was no mortgage registered on the property. A spokesman confirmed Flaherty also claims the secondary residence allowance.

– Conservative House Leader Jay Hill, a member for the board of internal economy, owns a home in the east end with his wife, Leah Murray. A spokesperson for Hill said he has never claimed a penny from taxpayers toward the cost of the home, even though he is entitled to do so.

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