Loss of partial tax exemption on earnings ‘a slap in the face’ to civic politicians - Lunenburg mayor

by Keith Corcoran

Grassroots politicians in Lunenburg are checking to see if there's any cash remaining in the current budget that could cancel out the forthcoming loss of a federal tax exemption on income that's available to officials elected to civic government.

If the cupboard is bare and nothing can be done by January 1, 2019 - when Ottawa ends the partial exemption concerning councillor earnings - then the issue of remuneration will be explored in the 2019-2020 budget.

Given council doesn't want to be in the uncomfortable position of deciding on its own earnings - a decision passed during a recent meeting - requested that an arms-length, objective party examine the matter and offer guidance on what constitutes fair compensation for them.

Lunenburg town councillors make less annual income than average municipal politicians.

Based on 2018 figures, the mayor's annual remuneration is $25,392, while the deputy mayor makes $20,312 and a councillor earns $13,542. If the tax exemption cut was currently in play, the net reduction translates to $385 less for councillors and $1,530 and $1,915 out of the pockets of the deputy mayor and mayor, respectively.

The Canada Revenue Agency is making the change after Ottawa announced during a recent budget that the so-called one-third tax exemption would end. Compensation for elected officials isn't considered salary and a portion has long been excluded from income taxes because of a traditional understanding that civic politicians attend events and travel without reimbursement. The Nova Scotia Federation of Municipalities said the tax rule had been in place 70 years.

Mayor Rachel Bailey expressed annoyance with the issue.

"I think its really quite a slap in the face, frankly, that we're even having to discuss this because any adjustment we make is a greater impact on our taxpayer who is also paying provincial tax and federal tax," she said during the council meeting.

"If the federal government felt that it was that important to take from the pockets, frankly, of municipal councillors who are doing the work building the communities of the country, then perhaps they should compensate us for the money that they're taking from us in tax."

She told LighthouseNOW that she fears the matter could impact the ability to attract candidates interested in seeking public office.

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