Mu­nic­i­pal politi­cians los­ing tax-free al­lowances

The Observer (Sarnia) - - FRONT PAGE - BAR­BARA SIMP­SON

Mu­nic­i­pal politi­cians across Lambton County could start bring­ing home less money in 2019 – a change some elected of­fi­cials fear could shrink the pool of po­ten­tial can­di­dates will­ing to serve on mu­nic­i­pal coun­cils.

Last month, the Canadian gov­ern­ment an­nounced in its bud­get the elim­i­na­tion of the tax-free al­lowance for elected mem­bers of pro­vin­cial and mu­nic­i­pal gov­ern­ments, mu­nic­i­pal util­ity boards and school boards.

Un­der this pro­gram, elected of­fi­cials had been able to claim one-third of their re­mu­ner­a­tion as a non-tax­able al­lowance.

But start­ing on Jan. 1, 2019, Lambton County politi­cians – along with other elected of­fi­cials across Canada – will have 100 per cent of their re­mu­ner­a­tion – with just a few ex­cep­tions – sub­jected to pay­roll tax de­duc­tions.

“This is just nit­pick­ing at the low­est level,” Brooke-Alvin­ston Mayor Don McGu­gan said of the fed­eral de­ci­sion to elim­i­nate taxfree al­lowances.

In 2016, Lambton County coun­cil­lors – who at­tended on av­er­age 27 meet­ings – were paid $17,400 in re­mu­ner­a­tion and mileage ex­penses on av­er­age. This av­er­age ex­cludes the county war­den who brought home close to $62,000.

“This is just nit­pick­ing at the low­est level,” Brooke-Alvin­ston Mayor Don McGu­gan said of the fed­eral de­ci­sion to elim­i­nate taxfree al­lowances.

County fi­nance staff brought this forth­com­ing change to the at­ten­tion of coun­cil’s af­ter­noon com­mit­tee Wed­nes­day. Staff found the change “ob­scured and hid­den” in the fed­eral bud­get, said John Innes, the county’s gen­eral man­ager of fi­nance.

Sev­eral county politi­cians said Wed­nes­day they’re fear­ful the elim­i­na­tion of the tax-free al­lowance could be a game changer for peo­ple con­sid­er­ing run­ning in the next mu­nic­i­pal elec­tion.

“I think it’s go­ing to be harder to at­tract peo­ple in the fu­ture if the re­mu­ner­a­tion is less,” St. Clair Town­ship Deputy Mayor Peter Gilliland said Wed­nes­day.

Mem­bers of the af­ter­noon com­mit­tee ap­proved a motion Wed­nes­day calling for the county to send a let­ter to Ottawa to ex­press their con­cerns with the elim­i­na­tion of the tax-free al­lowance.

County coun­cil will have fi­nal say on that re­quest at its May 3 meet­ing.

While Lambton County politi­cians still won’t be taxed on their travel and county busi­ness-re­lated ex­penses – and could ul­ti­mately de­cide to up their pay in order to make up for the change – Innes agreed dis­con­tin­u­ing the al­lowance could serve as a dis­in­cen­tive.

“At some point in time, there’s go­ing to be a tip­ping point where the com­pen­sa­tion in­volved isn’t worth the time to be in­volved, so that will be un­for­tu­nate for every­one in­volved,” he said.

The change will also di­rectly im­pact the county’s bot­tom line be­cause the county will see in­creases to its Canada Pen­sion Plan and Em­ploy­ment In­sur­ance pre­mi­ums, as well as to its amount of em­ployer’s health tax.

But not all county coun­cil­lors were con­cerned Wed­nes­day about the elim­i­na­tion of the al­lowance.

Sar­nia city/county Coun. Dave Boushy said he didn’t see the need to make “big deal out of it” by send­ing a let­ter.

“For the money we get – all coun­cil­lors across On­tario – it’s not go­ing to mean very much,” he said.

Innes said he sus­pects the fed­eral gov­ern­ment chose to elim­i­nate the tax-free al­lowance as a mea­sure to boost its in­come be­cause it’s an is­sue that won’t likely be protested.

Even find­ing the elim­i­na­tion of the al­lowance in the fed­eral bud­get was a chal­lenge, he said, adding his depart­ment no­ti­fied other im­pacted stake­hold­ers who weren’t aware of the change.

“For a gov­ern­ment that was elected on the prom­ise of be­ing open and trans­par­ent, we still have to ask a lot of ques­tions.”

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