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Councillors take pay cut

Removal of tax-free expense allowance affects overall wage
David Brindle
pay cut
WAGE DECREASE: [From left] City of Powell River councillors, including [from left] Rob Southcott, Karen Skadsheim and Jim Palm, will earn less in 2019 after giving themselves a raise last year. David Brindle photo

Soon after City of Powell River councillors received a salary hike, a portion of it will be taken away.

A wage cut and loss of a tax exemption will noticeably affect the wage increase City of Powell River mayor and council voted for themselves last year.

Committee of the whole was told by the city’s chief financial officer at its meeting on January 11 that a new tax exemption will significantly affect councillors’ pay.

A year ago, council and mayor voted themselves a wage increase based on a percentage formula that reflected the 2014 average employment wage of $33,760 per year. The remuneration they approved was $19,600 for councillors and $49,000 for mayor.

The 2017 federal budget that came out in March 2017 cut the tax exemption on remuneration paid to city councillors, mayors, school board trustees and other officials.

The purpose of the original exemption was to provide a one-third allowance for expenses incurred in conducting official duties, including travel, computer and home office.

According to councillor and finance committee chair Russell Brewer, the full $19,600 councillors receive annually will be taxable effective 2019.

“That's about a $2,000 hit, so really that $19,600 now becomes about $17,600,” said Brewer. “We're pretty much back to where we were when we started.”

Brewer said it is not about the money, but added that he worries it might deter people from running for municipal office in the upcoming October general election.

“My concern is the level of remuneration for small communities like ours is it's not enough to maybe attract people from a broad spectrum of the community,” said Brewer.

In addition, another $200 will also be cut from what each council member earns per year.

Because the annual average salary has gone down in Powell River, council’s will also drop.

“I'm okay with that,” said councillor Maggie Hathaway. “I'm kind of incensed that all of a sudden our one third that was tax-free, because we have lots of expenses, is now being removed.”

Hathaway said it was a huge step backward. Before voting to increase remuneration in 2017, councillors earned $16,485 annually.

With the $200 reduction to their base salary, they will receive approximately $17,400, but it will now be taxable.