Red Deer City councillors (from left) Tanya Handley, Ken Johnston and Michael Dawe at Monday nights council meeting. Photo by PAUL COWLEY/Advocate staff

City council votes to boost pay to offset tax changes

Council votes 5-4 to ensure take-home pay stays the same

Red Deer city council narrowly voted to top up its pay rather than take a steep rollback because of federal tax changes.

Mayor Tara Veer would have taken a $12,500 hit to her pay in 2019 and councillors almost $5,800 each because of a federal move to eliminate tax exemptions for all elected officials country-wide.

After some debate, council voted to “gross up” its compensation so take-home pay remained the same.

It’s a move that many municipal councils and school boards have already done, including in Central Alberta, Lacombe city and county councils and the Red Deer Public School Board.

After Monday night’s vote, Red Deer city council salaries will increase next year to $68,618 from $60,466, and the mayor’s salary to $131,940 from $112,198.

Several councillors pointed out that politicians’ pay is often a thorny issue.

Mayor Tara Veer said debating its own compensation is the last thing council wants to do, but it was necessary in this case.

Council remains committed to financial transparency and the adjustment was made only to “neutralize” the federal government tax changes.

Almost all other councils surveyed planned to make similar adjustments.

“I feel very confident that if other comparators had dealt with it differently we’d be dealing with it differently,” she said during council debate.

Some on council wanted to see the tax exemption issue dealt with as part of a larger review of council compensation.

Coun. Buck Buchanan proposed tabling the issue to a future meeting but the motion narrowly failed 5-4 with Councillors Ken Johnston, Lawrence Lee, Frank Wong, Michael Dawe and Tanya Handley against.

Coun. Ken Johnston estimated that councillors’ work weeks range from 30 to 60 hours, and more often than not closer to the high end. Based on hours, councillors are working for about the minimum age of $15 while being required to be accessible and well informed on a huge range of issues.

The tax-free exemption was meant to compensate for councillor’s expenses rather than itemizing them individually.

Coun. Tanya Handley, who voted against increasing compensation, favoured taking a look at expanded expense reporting in the future in light of the tax changes.

Coun. Vesna Higham, another no vote, said the federal government’s move amounts to “downloading” from the federal government on to municipalities.

Councillors Michael Dawe and Dianne Wyntjes also voted against.

Dawe said while having councillors itemize all of their expenses could be “messy” it may be time to go that route.

Wyntjes said she favoured taking a close look at all compensation at once rather than dealing only with the tax issues.

“It’s best to set the table once.”

Council compensation is due to be reviewed next summer as part of a routine procedure to review pay and other issues halfway through the council term.

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