Council passes wage hikes to deal with tax changes

Red Deer City council approved an adjustment to their gross salaries to preserve current net pay

City council approved pay hikes during Monday’s meeting to deal with changes to taxes for elected officials nation-wide.

Council tabled the issue during an October meeting until this week, but notes show that as of Jan. 1st, 2019, the one-third tax-free allowance will be coming to an end due to amendments to the Income Tax Act.

In effect, that would have meant that net pay for the Mayor and councillors would be reduced overall by $59,000.

According to council notes from that meeting, to make up for the difference through ‘grossing up’, councillors would land a pay increase of 13.48 per cent ($60,466.44 to $68,618.16) which would end up being a net pay difference to their overall income of $2.86.

Mayor Tara Veer would see a pay increase of 18.65 per cent ($112,198.95 to $131,940.43) which would result in a net pay overall increase of $1.94.

“Today’s decision to adjust Mayor and City council salaries was done in an effort to respond to the federal legislation change and deletion of the tax-free allowance that takes effect on January 1st, 2019,” said Veer.

“City council is committed to remaining transparent in its finances and has made an adjustment only to neutralize the federal legislated change, similar to communities in our region, across the province and the country.”

Several other municipalities have also opted to ‘gross up’ elected officials’ salaries to keep them essentially where they currently are.

These communities include Strathcona County, Medicine Hat, Kelowna, Grande Prairie and Wood Buffalo.

“The last thing this council wants to be deliberating on is with respect to our compensation,” said Veer. “Because the federal government has made this change, we do have the responsibility to address it.”

During discussions, some councillors pointed out that the role of councillor demands more hours and commitments than some in the public may be aware of.

Coun. Ken Johnston said that the issue wasn’t about raising the wages, but about preserving them.

During discussion, a tabling motion put forward by Coun. Buck Buchanan regarding the issue was ultimately defeated.

Coun. Dianne Wyntjes pointed out she would have preferred including the issue in operating budget discussions in January.

“I would concur that to do this job to the best of one’s ability, one needs to be retired, own your own business and have your own flexibility, or have a very open employer that lets one come and go,” she said, adding that the occasional schedule changes affect things as well.

Coun. Vesna Higham had wished to table the issue, and also pointed to the regular council compensation review next summer to have a comprehensive look at all aspects of compensation.

Coun. Tanya Handley also voted against the move, suggesting expanded expense reporting as an option to help deal with the impact of the tax changes.

Coun. Michael Dawe also voted against the move.

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