Budget increase could replace tax exemption for Osoyoos council

Osoyoos Today

Osoyoos council will exactly increase the budget amount it sets to pay itself in an effort to defeat a federal budget measure that will lop more than $9,000 from its collective 2019 remuneration.

Council on Monday gave three readings to a bylaw that would add $9,226.22 to the remuneration budget after a Canada Revenue Agency decision to eliminate a tax exemption enjoyed by “members of provincial and territorial legislative assemblies and to certain municipal office-holders.”

The budget change would “ensure that council’s take home pay remains revenue neutral,” explained Jim Zakall, the town’s director of financial fervices.

“Currently, town council remains under the provision that one-third of its remuneration is being treated as expenses related to carrying out their duties (a tax free allowance) and two-thirds of its council remuneration remains taxable,” Mr. Zakall read from an accompanying report.

“The 2017 federal budget eliminates the councillor tax exemption.”

To “improve consistency,” among the middle class, the 2017 federal budget removed the tax exemptions for non-accountable expense allowances paid to members of provincial and territorial legislative assemblies and to certain municipal office-holders.

“In today’s workforce, many Canadians receive benefits — such as a daily food allowance or transit fare — which are counted as taxable income,” the 2017 federal budget document reads. “Yet certain tax measures allow some individuals to pay less than their fair share of taxes on such benefits. These measures are unfair and they lack a strong policy rationale.”

The exemption, the budget document notes, “is only available to certain provincial, territorial and municipal office holders, and provides an advantage that other Canadians do not enjoy.”

The majority of council, however, appeared to believe the level of income they currently received should remain intact.

“Yes, it is an increase in pay as far as the budget goes, but it’s important to note it’s not an increase in what these councillors are taking home for the job they’re doing,” said Counc. Mike Campol, speaking in support of the change to the Council Indemnity Bylaw.

“I just wouldn’t want to see the earnings that I believe councillors work hard for — I’d hate to see that take be less than it is now.”

In order to maintain the salary status quo, in 2019 the mayor’s remuneration would be increased to $30,148.68 — up from $27,821.52 — and councillor remuneration would increase to $18,374.95 from $16,956.60.

All four councillors — including Coun. Campol, who has already indicated he would not run in October for another term and thus would not benefit — voted to approve the budget increase.

Mayor Sue McKortoff voted against the measure.

“About a year ago, we discussed council remuneration and we did provide an increase to all of council — not a lot but it made a difference,” she said. “I’m not sure that this is the right time for us to be considering that.”

Council voted itself a pay raise in August 2016, the largest bump going to McKortoff, whose salary increased 15 per cent. Councillors received a five per cent increase.

“This has the potential to be highly controversial because it seems on the surface that it’s a selfish decision if we decide to go ahead with this,” noted Coun. CJ Rhodes.

“This is not our municipality that is doing this. This is a situation that was downloaded to us,” he added later.

“I just don’t see this as being a personal increase in salary in any way, shape or form.”