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Clawback on council take-home salaries

The 2017 federal decision to claw back municipal salary tax exemptions will impact all elected officials who will no longer be able to collect one-third of their salaries tax-free beginning in 2019.
Town of Cochrane
Town of Cochrane

The 2017 federal decision to claw back municipal salary tax exemptions will impact all elected officials who will no longer be able to collect one-third of their salaries tax-free beginning in 2019. This fall, Cochrane mayor and council will vote on options including whether or not a base pay hike is in order to compensate for the tax change. It's a weighty decision, but one that some feel is necessary to keep and attract qualified talent for the job. Scott Hennig, vice-president of communications for the Canadian Taxpayer's Federation (CTF), a non-partisan watchdog group, said the move is a plus for transparency. "Our intention was not to pay people less ... we've long said it's a transparency issue and that public service shouldn't have perks that regular people do not," explained Hennig, adding that the CTF is advocating to "gross up base salaries" to mitigate the loss in wages. The decision does not sit well with the Alberta Urban Municipalities Association (AUMA), the association that represents municipalities, towns and cities, nor more than 85 per cent of Albertans. In January, AUMA sent a letter to Minister Diane Lebouthillier of National Revenue Canada asking the ministry " to provide a minimum tax exemption for elected officials as an acknowledgement and appreciation for the public service being provided." The merits of AUMA's position are rooted in the lack of public consultation prior to making the decision, as well as "the appreciation shown for serving the public from the federal government to elected officials has been removed" as a result of the decision. The AUMA maintains that less take-home pay could result in municipalities struggling to attract qualified candidates. “Tax exemptions are an opportunity to attract people to public service, particularly in smaller communities where there is limited funding available,” says Barry Morishita, AUMA president. “Exemptions also exist for other public service work, including paid-on-call and volunteer fire fighters, search and rescue, and other emergency volunteers. Removing the exemption means municipalities will have to explore having to increase salaries for elected officials to make up the difference, which will have an impact on municipal budgets.” Cochrane  With respect to Cochrane town council, the mayor is the only full-time elected official. All councillor positions are part-time. Currently, town councillors each earn a base salary of $28,501 and the mayor earns $84,671. They are reimbursed for work-related travel expense, but do not receive per diem pay. Cochrane's population for 2018 is 27,960. Comparatively, Okotoks' population is at just under 29,000 with a full-time mayor earning $77,661 and part-time councillors earning $38,213. Airdrie's population is just over 60,000, with a full-time mayor earning $97,289 and councillors coming in at $38,915. In 2017, Airdrie adopted the remuneration process being used in Red Deer – where councillor wages are set at 55 per cent of the mayor's, which is reviewed by staff mid-term every four years and is based on comparative analyses with other municipalities. Adjustments are made to the mayor's salary, effective mid-term when a review shows a differential of greater than minus five per cent; if there is a differential of greater than this, a salary freeze will come into place until a review shows the salary to be within five per cent. Cochrane's mayoral position last received a pay hike, outside of standard cost of living adjustments, in 2012. Councillors received a 10 per cent increase, approved by the former council in 2016. The increase is spread out over the four-year term. The remuneration committee, comprised of members of the public, advised council and administration at that time that while the mayor's salary seemed to be in line with comparably-sized municipalities, the salaries of councillors was below average. For four-term Coun. Tara McFadden, who has a tendency to fill her plate with a lot of additional committee and task force appointments, said compensation should be reflective of the commitment and hard work that goes into the position that while stated as part-time is a full-time job. "At the end of the day, money does matter," said McFadden, a mom of two. "You can't do this job well without a passion for it and there is a public expectation that council is focused on the issues – not part-time focused. My passion for Cochrane's future means I step up for the extra work, but it's a sacrifice of family time and personal finances." First-term Coun. Susan Flowers feels that fair pay will ensure qualified candidates continue to seek election. For first-term councillor Pat Wilson, it's a civic duty that fits well into his full-time work. "I realized even a year ago that there would be a significant time commitment involved and this would take away from the amount of time I could commit to my other job," said Wilson, adding that salary was not a major factor in his decision to run. First-term Coun. Marni Fedeyko said she has pursued her career interests out of love, rather than money, but that the juggling act as a mom of three is challenging. For two-term Coun. Morgan Nagel, who has advocated for a wage freeze previously, said increasing salaries to compensate for the tax exemption change needs to be better justified. "I don't think we should be paid more just because our taxes are going up. It doesn't work that way for anyone else in the world. I actually think it's very important for politicians to feel the pain of the taxes they help create. But similar to the private sector, I do believe our pay should match our workload. When we work more, we should get paid more." Jaylene Knight, manager of legislative services for the town, said that the standard mid-term review will take place this year with a full report delivered to council this fall. "This will be a lot more involved this year due to the federal changes and how they impact how council is reimbursed for expenses as well as the gap in councillor salaries that was identified by the 2016 committee," explained Knight


Lindsay  Seewalt

About the Author: Lindsay Seewalt

Lindsay is a senior Eagle reporter who has transformed her penchant for storytelling into the craft of writing.
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