Released November 13, 2018
A long-standing federal tax exemption for elected municipal officials will expire on Jan. 1, 2019
WEYBURN – Federal legislation passed in 2017 will eliminate a tax exemption for municipal and provincial elected officials in the new year.
According to Section 52 (2) of Saskatchewan’s Cities Act, council is to be paid any remuneration and reimbursement set by the council. As well, one-third of the total remuneration is deemed to be paid with respect to general expenses incurred that are incidental to the discharge of the duties of a member of council.
This made it so one-third of mayor and councillors’ total remuneration was treated as a non-accountable allowance and therefore not included in their taxable income.
This tax exemption was first introduced under the Federal Income Tax Act in 1946, to recognize the work of elected provincial MLAs. It was extended to elected municipal officials in 1953.
Measures introduced in the 2017 Federal Budget eliminates this tax exemption effective Jan. 1, 2019, resulting in substantive changes to after-tax compensation for provincial and municipal elected officials.
The federal government justified this change on the basis that it “provides an advantage that other Canadians do not enjoy.”
This legislation received Royal Assent on June 22, 2017 (Bill C 44).
The City of Weyburn’s Council Remuneration Policy states remuneration for mayor and council will be increased Jan. 1, or each calendar year, by the previous year’s Consumer Price Index (CPI) amount. As well, council receives a per diem of $133.77 per day (as of 2018), including travel days, when attending meetings pre-approved outside the City of Weyburn.
The purpose of this policy is to establish procedures and processes to ensure council remuneration is fair, reasonable and puts Weyburn council closest to status quo as possible.
As a result of the newly passed federal legislation, Weyburn’s elected municipal officials will see a decrease in after-tax compensation around 8.5 per cent.
In response to this change, Councillor Dick Michel advised on Nov. 13, 2018, a notice of motion to consider an offset in remuneration to address the elimination of the one-third tax exemption.
The objective of the remuneration adjustment is to protect Weyburn’s officials from an arbitrary pay cut imposed by federal legislation, and to recognize the time commitments of municipal duties.
A public notice can be viewed at City Hall, on the City of Weyburn website (www.weyburn.ca/wp-content/uploads/2018/11/Public-Notice-Council-Remuneration-Nov-2018.pdf) and in the local newspaper for two weeks as of Nov. 13, as per legislation in the City of Weyburn Public Notice Policy.
The motion will be presented at the regular council meeting to be held on Nov. 26, at which time council will discuss the impact upcoming federal legislation has on Weyburn City Council.