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Saanich mayor and council will usher in new year with a pay cut

Saanich council to wait and see what other cities do with federal changes to tax exemption
Council Monday continued the process of removing references to the Environmental Development Permit Area (EDPA) bylaw from Saanich’s books. Council will start 2019 with a pay cut following Ottawa’s cancellation of the non-taxable portion of salaries for elected officials. File photo

Saanich council was in no rush on Monday to be an example for other municipalities on how to adjust their salary in reaction to the pending pay cut they’ll see beginning in 2019.

As it stands, about one-third of the mayor’s and council’s salaries are non-taxed, which is $34,295 of the mayor’s $102,887 salary and $13,770 of councillors’ salaries of $40,617.55. However, Ottawa has ended the tax-free portion of salary as an option for mayors and councillors in Canada. The allowance was based on the assumption that elected officials incur expenses throughout their working year, to the tune of one-third of their pay.

With Mayor Richard Atwell absent, council voted 7-1 to revisit their salaries, and expenses, during the budget phase midway through 2019. When they do it, they’ll use the same equation to adjust their salary, which is based on the average salaries of mayors and councils in the “comparator municipalities” of Abbotsford, Delta, Kamloops, Kelowna, Langley, Nanaimo, North Vancouver and Victoria.

However, Coun. Colin Plant called it a “spineless” move to put off the decision and use the average based on what the “comparator” councils decide on, rather than make their own decision. Plant had hoped council would use option one of the finance committee’s four options, which would increase the mayor and council pay rates so that, after taxes, the net income (after taxes) would be the same as it is now. To do that, council salary would be increased, to an estimate of around $45,000.

“It’s abhorrent to me, to watch every other municipality in B.C. deal with it and then say, ‘Thank you, Kelowna, thank you, Victoria, we’ll do what they did,’” Plant said.

It means the incoming mayor and council, which will be elected in October, will start 2019 with a pay cut as they’ll be paying full taxes on their wages for the first time. To do nothing for all of 2019 means the Saanich mayor is on pace to lose about $11,000 and Saanich councillors about $3,500 in the coming tax year.

“I think [this is the] best option at this stage, and it has nothing to do with not having a backbone,” Coun. Judy Brownoff said. “It’s a process we’ve used. When I was first elected there was no policy and no incremental increase to council remuneration, and when you went to give one, [those] councils of the day, it was quite high, and I think it’s better if you have a policy and a process so the public can see incremental increases.”

A June finance committee report outlined four options for council. Those options ranged from raising remuneration levels so council members received the same net pay, to not making any adjustments until the 2019, when pay levels could be brought in line with the comparator municipalities.

The four options included:

Raising current remuneration levels (effective 2019) to retain the same net pay for a total cost of just under $57,000 to taxpayers.

Assume mayor and council will have some deductible expenses and increase the salary (for 2019) to offset the difference.

Maintain the same pay levels on the assumption there are enough deductible expenses – which mayor and council will now need to keep track of and report on their tax returns – to offset the increased taxable income.

And the final option which Saanich chose, is not to make any adjustments until 2019 budget time, and at that time use the average mayor and council salaries based on the comparator municipalities, as they’ve been doing previously.

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