Council increases remuneration to offset tax break
By Chad Ingram
Published July 5, 2018
Haliburton County councillors will increase their remuneration at the upper-tier level so that their take-home pay remains the same, in light of federal income tax changes.
As part of its 2017 budget, the federal government introduced changes to the Income Tax Act that are set to come into effect in 2019. They include the removal of an income tax exemption that’s existed until now, where municipal elected officials were only taxed on two-thirds of their income.
“Historically, the one-third exemption was meant to compensate municipal elected officials for additional expenses incurred to their duties but not officially claimed,” read a report from county treasurer Elaine Taylor.
Taylor’s report laid out three options for councillors. Option A was to keep existing remuneration with no mitigation measures, meaning councillors would have seen their take-home income fall.
Option B was to keep existing remuneration and for councillors to bill additional expenses to the county. Option C was to increase remuneration to offset the increased level of income taxation, thereby keeping council’s take-home pay the same.
As Taylor’s report explained, “Remuneration for council members is composed of two pieces; per diems for council meetings and per diems for other meetings. Currently, both types of per diems are only two-thirds taxed. Both of these per diems are included in our analysis.”
The county warden is paid a per diem of just more than $1,420 per council meeting, the deputy warden just more than $750, and councillors each about $670. Council meetings typically happen once a month.
For advisory committee meetings, council members are each paid $75 per meeting, or $125 if the meeting happens to run beyond a certain time limit. Advisory committee meetings also typically take place once a month.
For 2017, the warden received about $20,000 in per diem payments, most members of county council in the $9,000 to $11,000 range, at the upper tier level.
Haliburton County council consists of the mayor and deputy mayors of each of the county’s four lower-tier municipalities. Local politicians are compensated both at the lower-tier and upper-tier level. The mayors each make about $30,000 at the lower-tier level (with the exception of Dysart et al, where the figure for 2019 will be $26,500), and deputy mayors somewhere in the low $20,000s.
Option A would have seen an expected drop in take-home pay for the warden of about $1,840, about $545 for the deputy warden, and somewhere between $160 and $380 for other members of county council.
Option B included an estimated increase in costs of at least $27,000; an estimate Taylor admitted was likely conservative.
Option C increases the per diem for council meetings by about $200 for the warden, by about $60 for the deputy warden and about $25 for other members of council. Committee meeting per diems will increase by $5, and by $10 for extended meetings.
The anticipated increase in costs equate to about $7,000 per year. County councillors receive an inflation cost of living increase each year based on what is received by staff.
Dysart et al Deputy Mayor Andrea Roberts said she preferred Option A, saying the taxpayers shouldn’t have to take the hit.
“I don’t like that they’re changing this, but I don’t want to see . . . it’s going to cost the taxpayer more with Option C,” Roberts said. “I was willing, this time around, to take the hit.”
“I’m absolutely not willing to take the hit,” said Algonquin Highlands Mayor Carol Moffatt, whose preference was Option C. “I work full-time hours for part-time pay, and I think the fairest thing is to have the net take-home pay the same.”
“We all know we don’t do it for the money,” Moffatt said, but added it was unfair council members should be expected to take a pay decrease.
Dysart et al Mayor Murray Fearrey asked if the tax changes had been finalized by the federal government.
“I don’t believe it is finalized yet,” said CAO Mike Rutter, who added there had been some advocacy to keep the exemption in place for elected officials below a certain income threshold. Rural municipal politicians are typically paid at a rate lower than their urban counterparts. However, local politics in small communities is often considered a part-time job, while in cities it’s considered full-time work.
“Is it not something the new council should decide?” Fearrey asked, in reference to the municipal election taking place province-wide Oct. 22.
“I think we should decide for the new council,” said Highlands East Deputy Mayor and County Warden Suzanne Partridge.
“I agree,” said Algonquin Highlands Deputy Mayor Liz Danielsen. “I think we should decide for the new council, so they’re not put in a position of giving themselves a raise.”
“They need to know, when they are going into it, what their compensation’s going to be.”
Danielsen also preferred Option C, indicating she personally couldn’t afford a cut in compensation.
“When I quit working in order to do this, there was a point beyond which I couldn’t go, and I couldn’t afford to take a hit,” she said.
Ultimately, the majority of council favoured Option C, with Roberts and Fearrey, both preferring Option A, voting against the motion.