With tax breaks for councillors nixed in the 2017 federal budget, local municipalities are now left to pick up the slack.
Oro-Medonte Township council members voted to give themselves a raise recently to try to keep up with the federal tax breaks for councillors cancelled in 2017 by the federal government.
“The township has continued to fall behind the rate of inflation,” said Mayor Harry Hughes. “Most councils are dealing with this now, where one-third (of our compensation) used to be non-taxable. Councils are now adjusting their compensation to try to balance that out.”
In its 2017 budget, the federal government included a change to eliminate the tax exemption for elected officials, effective Jan. 1, 2019. The increase in base remuneration is to offset removal of the tax-free allowance with an increase of 20% to base remuneration.
According to a staff report presented at the Dec. 12 Oro-Medonte Township council meeting to discuss the pay increase, the workload for the mayor, deputy mayor and councillors is also anticipated to expand in response to requests for constituent consultation, increased pressures from growth, provincial regulations and downloading of responsibility/accountability to the lower-tier of government.
The 2018 base compensation for the mayor's position was $31,989, for the deputy mayor was $25,591 and for councillors was $19,947.
The base compensation increase for 2019 will bring compensation for the mayor position to $37,454, the deputy mayor to $26,492 and councillors to $21,518.
Although councils voting on their own raises tends to raise eyebrows from residents, Hughes says he hasn’t heard a word about it from the community.
“As a matter of fact, a number of councillors, when they were knocking on doors, residents who asked about remuneration were taken aback at the small amount of money we’re being paid. Particularly if you compare salaries of councillors of rural areas to cities, there’s a tremendous gap,” Hughes said.
Although switching to a flat-rate system for per diem payments and mileage was suggested in the report as an option, council voted to continue with the existing system of $160 per day.
“Certainly I would be supportive of (this) option... then it’s more equivalent to what we’ve actually done that year. Some years may be busier than others. I think that’s the fair way to deal with that,” said Deputy Mayor Scott Jermey, adding he believes the same way about the mileage reimbursement.
Jermey had one question for CAO Robin Dunn during the meeting, asking how he came to the amount for the suggested increase.
“It’s (taking into account) the same cost-of-living adjustment given to staff members,” Dunn responded. “It’s consistent with the general cost of living.”
“When was the per diem rate established? Has there been an inflationary increase of that figure over time?” asked Coun. Scott Macpherson.
Dunn said that while he didn’t have the paperwork in front of him, that he believed the rate was established in 2011.
“That was the last time a fulsome review and undertaking was taken across the board,” said Dunn.
Council’s raise comes into effect Jan. 1, 2019.
To read the full staff report, click here.
