Starting Jan. 1, 2019, a one-third tax exemption on elected official’s salaries will be eliminated.
This isn't news, it was in the 2017 federal budget.
So while many, if not most, jurisdictions across Canada have already dealt with the ramifications of this new measure, city council was first presented with it Monday at a Municipal Services Committee meeting.
“My preference is that on these issues that we don’t address them on a last-minute basis. We don’t have to be crunched for time on this,” said Coun. Julian Morse.
Oh, but yet council is now fighting the clock, as the city is expecting to declare its pay scheme by the end of September, leaving no time for a the preferred route – a committee-style deliberation.
Instead, administrators are recommending the city hire a consultant to study and make recommendations on councillor compensation as Canada Revenue Agency taxation rules come into effect.
It seems our city leaders have never met a consultant they didn't like – and hire.
But this issue of elected officials losing a tax freebie – while perhaps straightforward and even satisfactory to some ratepayers – poses some real problems for our part-time city councillors.
They especially will be hard-hit when the new rule comes into effect.
City councillors work part-time and are compensated $13,333 annually, plus a tax free allowance of $6,667 and a taxable honorarium of $260 for each day they take off from their full time jobs for city business.
The deputy mayor, also part-time, is compensated $14,333 plus a $7,167 tax-free allowance.
The full-time mayor earns $58,587 annually, plus a $29,294 allowance.
Most part-time councillors put in near full-time hours for city duties, many also balancing that with their own full-time careers.
There is a longstanding debate in jurisdictions across Canada as to how much money elected officials should be paid. After all, we want bright, creative and hard-working people to be our political leaders. We need reasonable laws, strong enforcement and public policy that helps us all feel safe and secure. In addition, the needs of business and the wants of residents must be addressed.
And at a city level, we want to be able to have a group of city councillors who are available to hear people's complaints, suggestions and concerns.
But how do we convince someone to tackle a tough, part-time job with full-time hours that also thrusts them into the critical spotlight shone by entities such as this newspaper?
So while entering public life is a bit of a sacrifice, it's understandable people need to get a decent amount of remuneration.
If the city makes no change to its compensation scheme, councillors' pay will default to 100 per cent taxation, resulting in a take-home pay cut.
So it makes sense, then, to elevate the salaries to compensate for that.
It's just too bad the city decided to wait so long before tackling this issue.
The city is now rushed to meet a 2019 deadline – this while adaptation to the new rules began much sooner in other jurisdictions.
“Because the honorarium for local officials is so low, people aren’t really running for office to make money,” said Kerry Penney, director of policy, communications and economic development.
It also has to be noted that this move by the feds amounts to nothing more than a cash grab from lower levels of government.
Etienne Biram, media relations for the Canada Revenue Agency, argues the change was made to “make existing tax measures more effective, equitable and accessible to Canadians.”
But all it means is the feds get more revenue from taxation, while the municipalities – and ratepayers, through property taxes and various fees – will have to backfill city council's income.