Town of Osoyoos Council has voted in support of a staff recommendation to compensate council members for lost income as a result of federal tax changes.
Only Mayor Sue McKortoff voted against a motion to give the first three readings to a Council Indemnity Bylaw last week.
“This has the potential to be highly controversial, because it seems on the surface that it’s a selfish decision if we decide to go ahead with this,” said Councillor C.J. Rhodes, who argued that the increase to council member remuneration is manageable because the town’s debt ratio is low.
In a report to council, Jim Zakall, director of financial services, noted that previously one third of council members’ remuneration was treated as expenses related to carrying out their duties – a tax-free allowance – and two-thirds of their remuneration was taxable.
The 2017 federal budget, however, eliminated tax exemptions for “non-accountable expense allowances” to certain public office holders because these provide an advantage that other Canadians don’t enjoy.
The new rules take effect Jan. 1, 2019.
In recommending the bylaw to increase remuneration to make up for this lost tax benefit, Zakall noted that council members’ take-home pay would be at the same level after the new tax rules take effect.
But Mayor McKortoff opposed the motion, saying that councillors increased their pay recently. That increase, in August 2016, was the first increase in five years.
“I’m not sure that this is the right time for us to be considering that,” said McKortoff. “I would vote against it.”
Councillor Mike Campol implied his support for the motion would not be self-serving because he is not planning to run for another term.
Council members, he said, need to engage on many committees dealing with such issues as heathcare, education, lake water, downtown revitalization and other issues.
He disputed the perception that councillors simply attend council twice a month.
“What I don’t think the public sees is the amount of other engagement meetings we deal with as councillors, the committees we sit on, the travelling we have to do to neighbouring communities while being on those committees,” he said.
“I’d hate to see the take-home be less than what it is now, so I’m speaking in favour of the motion while making clear that I won’t benefit from it,” he said.
Councillor Jim King also agreed with the staff recommendation.
“This is not an increase in pay,” he said, arguing that it still gives council members the same net pay.
The mayor receives annual remuneration of about $27,822 and councillors receive $16,957. The bylaw would keep the after-tax net pay for the mayor at $24,101 and for councillors at $14,689, assuming a tax rate of 20.06 per cent.
Council must still approve adoption of the bylaw at another meeting.
RICHARD McGUIRE
Osoyoos Times
