COUNCILS FEELING TAX CRUNCH
Town council will be re-examining the federal government’s elimination of a onethird tax exemption for elected officials and its subsequent salary implications, but it won’t be an open discussion in full view of the public.
Under previous federal tax law, such an allowance amounting to more than one third of the official’s salary plus allowances qualified for a federal exemption. Introduced in 1946, the exemption was extended to municipally-elected officials in 1953.
Federal legislation (Bill C-44) passed in 2017 eliminates this tax exemption effective Jan. 1, 2019, and has resulted in “substantive changes to after tax compensation” for elected officials. The decision has been left up to each individual municipality if or how they might act to counteract the effects of the change. Bill C-44 was justified on the basis that the exemption “provides an advantage that other Canadians do not enjoy.” While reimbursements for specific expenses accompanied by receipts are not taxable the federal government took the view that a special allowance that does not require receipt accounting substitutes for salary is therefore a taxable benefit.
Following initial discussion on Dec. 17, town council had voted 6-1 to take no action and accept the change in one third federal tax exemption for information. Coun. Jack Brewin had opposed the motion. While this would have appeared to be an end to the matter, some members of council had other ideas as the issue would resurface for council discussion at the Jan. 14 regular meeting.
“When we were preparing the agenda, Mr. Mayor, you had asked to have this put back on the agenda. In doing so, there was a bit of a concern regarding the procedural bylaw,” said CAO Cory Armfelt. “It’s just not quite clear within the procedural bylaw — the unfortunate thing to me is that it is quite clear in the procedural bylaw that if something is accepted as information, or not accepted as information, the point of the procedural bylaw is that where a resolution has been voted upon, either carried or defeated — other than a motion to table, which the previous motion was not to table, it’s for information — it shall not be able to be brought back during a regular council meeting for further consideration for another six months.”
According to documentation from the Federation of Canadian Municipalities (FCM), without enhanced compensation at the municipal level the tax changes will significantly reduce an elected official’s after tax compensation.
While FCM acknowledged that taking no action effectively decreases take-home compensation for affected officials, it also eliminates the need for a municipality to find cost savings or contemplate property tax increases. In responding to the change, some communities have decided that an overall increase in total remuneration for elected officials is necessary to fully or partially replace lost compensation.
In a back and forth conversation, Coun. Joe Strojwas immediately questioned the request which had originated with Mayor Andrew Prokop.
“Your worship, I gather you’ve asked to put this back on the council agenda?”
“I have, through some actual asks,” said Prokop.
“Can you explain to us why you want to bring this back?” questioned Strojwas.
“Just through the ask of other council members,” replied Prokop.
Strojwas continued to press Prokop for answers.
“So you’re not the only one, there’s several other councillors that have asked for this to come back?” “That’s correct,” said Prokop. “And no reason why?” asked Strojwas. Prokop would yield more information, but focused on the procedural problems involved with bringing the motion back rather than an explanation of why the item was to be reassessed.
“It was simply by information, I guess that’s where that grey area comes into this as Mr. Armfelt indicated there, and I asked the same question. We have had a number of things that we have taken for information, and that same topic comes up at the next meeting, or soon after, for an actual decision. In my mind, and I think other councillors as well, a request for information is just that. It’s not an actual decision for any action, but it is a base motion that is made.” Coun. Garth Bekkering would weigh in on the procedural aspects of the decision, but also pressed for the “subject at hand” to be discussed at another time.