‘They just got greedy’
Ottawa to eliminate income tax-exempt status for elected municipal officials
Coming changes in how Ottawa taxes elected municipal officials is putting local councils between a rock and a hard place, says a Cape Breton Regional Municipality district representative.
“It’s not right and it’s not fair,” stated Steve Gillespie, a first-term councillor representing the mostly suburban District 5, an area that includes Sydney River, Coxheath and Westmount.
“It’s greed and ignorance, and it’s not fair that the federal government is walking in and changing it halfway through our four-year term – the unfortunate part is that this is a federal decision that affects all municipalities across Canada.” At issue is the decision to eliminate the income tax-exempt status that elected municipal officials enjoy on one-third of their annual salaries.
The new rules come into effect in January and mean that councillors such as Gillespie will gross the same amount but will take home less pay.
“They (the feds) just got greedy and it just doesn’t seem right — they’re forcing municipalities into a situation where they are going to have to pay their elected officials less money than they were making or they’re going to have to top it up so they’re making the same amount of money but at greater cost to the taxpayer,” said Gillespie, one of a minority of CBRM councillors who also holds down a full-time job.
“My personal opinion is that I have no intention of taking home less money tomorrow than I do today to do the same job — I don’t believe that anyone else should, or anyone would want to do that, I just don’t believe there is anyone out there who would take home less money to do the same job.”
CBRM chief financial officer Jennifer Campbell said city hall is aware of the situation and is working on putting together recommendations and scenarios for the consideration of council. She said municipal staff are also evaluating the options in terms of what the impact of the changes will be on the CBRM’s operating budget.
“We’ve had one or two incamera sessions on this topic already and council has asked for an issue paper and recommendation from staff on how to proceed based on the options that are available,” said Campbell.
“The options are to do nothing, that is keep it the same and council members will get taxed on the full salary as opposed to the two-thirds; do a full top-up so that they net the same pay; or do some sort of incremental increase that is somewhere in between.”
Glace Bay councillor George MacDonald represents the CBRM on the Nova Scotia Federation of Municipalities (NSFM). He said he expects the issue to be among the matters of discussion when the NSFM holds its annual meeting in Halifax in early November.
“Our sense is that most municipalities and communities want to off-set the amount lost by the changes — some have done it already, but my feeling is that most of the municipalities across the province will raise their salaries to equate with the loss,” said MacDonald, who added that he will not be seeking re-election in the 2020 municipal vote.
And the veteran councillor knows that any wage issue involving elected officials will prompt at least some public outcry.
“I know it’s also going to be controversial for us in the CBRM and there will be a long discussion on this,” said MacDonald.
“We only have one income, and that’s our tax base, so it’s going to have to come from that — we may say that it’s not a raise, but when the average taxpayer sees that they’ll ask who’s paying for it and of course it’s them.”
Gillespie agreed that no matter what council does there will always be some naysayers and critics.
“There’s always going to be people out there who believe that we’re giving ourselves a huge raise even when you explain to them that we’re just making changes to the way we’re being paid because the federal government is taking away the only incentive they’ve given us to put our names on the ballot to run for public office,” he said.
The pay issue is expected to be on the agenda when council meets in November.
For the record, CBRM’s 12 councillors are considered part-time and make $40,246 per year. The mayor’s salary is about $110,000. They also have a travel allowance which can be claimed either through exact mileage or a base rate of $140 per week.
Councillors with the Halifax Regional Municipality gave up their one-third income taxexempt status four years ago when they opted to earn fulltime salaries. HRM councillors earn more than $85,000 per annum. Mayor Mike Savage makes more than $175,000.