Prince Rupert City Hall. (File photo)

Tax change triggers tricky debate on politicians’ pay

January first changes will remove one-third tax exemption for elected officials

Like running the vacuum or taking long drives to nowhere, talking tax policy can be a great way to induce sleep.

But the upcoming loss of a tax break for elected officials across Canada is causing councillors in the region to take notice.

Starting Jan. 1, the federal government will cancel a long-standing tax exemption for provincial legislators, mayors, councillors, school trustees, regional district directors, and other elected officials.

Currently, instead of filing expenses, most of those elected officials pay no tax on a third of their pay.

The idea was that for most elected officials, a one-third tax break is easier to manage than having everyone file claims for the many expenses related to their civic duties.

But in 2017, the Liberal government decided to scrap the tax break, saying it was unfair because it “provides an advantage that other Canadians do not enjoy.”

The change opened a whole can of worms.

First, local representatives faced the question — should they get a raise to offset the loss and keep their pay unchanged?

Second, since the ever-uncomfortable issue was already on the table, are they due for a further raise anyway?

The City of Prince Rupert addressed the issue during its regular meeting of council on Oct. 22.

Mayor Lee Brain explained to council that since the exemption would no longer exist, councillors and the mayor would essentially be taking a pay cut if compensation remained the same.

READ MORE: Council votes to expand proposed cannabis zone in Prince Rupert

Brain suggested establishing a blue ribbon select standing committee to study the issue and suggest solutions for compensation.

The committee is made up of members of the community and will specifically look at: addressing the impacts of the removal of the one-third tax exemption, making a recommendation on the appropriate mayor and council remuneration moving forward and making a recommendation on a appropriate daily Per Diem framework moving forward.

During discussion, councillor Blair Mirau said he agreed with the creation of the committee since the mayor and councillors do require appropriate compensation for time spent attending to city business.

“I’m not really a fan of politicians setting their own wages so I think this is a good idea to get a comparison with other communities made explicit so we can at least have a recommendation on what the benchmarks should be,” Mirau said.

The motion to create the standing committee passed unanimously. While it was originally intended for the committee to make its recommendations by the end of December, Prince Rupert communications manager Veronika Stewart said its report will not be ready until the new year at the city’s Jan. 28 regular council meeting.

Most recently, the issue came up in December’s North Coast Regional District meeting, where the directors voted in favour of an offsetting pay raise, noting that the extra tax burden is just 20 cents for the average valued residential property.

The total pay for the entire 10-member board is $160,568.

While staff recommended the raise and it passed, the vote was not unanimous, with Director and Queen Charlotte Mayor Kris Olsen voting against.

“I don’t think it should be on the taxpayers,” he said.

With files from Matthew Allen

READ MORE council briefs here



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