Fredericton looking to make councillors 'whole' after tax changes

Fredericton city staff are looking for ways to compensate city councillors after a key tax break for elected representatives was cancelled on Jan. 1.

Previously, one-third of the mayor and councillors' salaries were tax-free.

But changes in federal tax rules means this arrangement won't continue

"We don't know per sehow much that affects each councillor, because of course our tax situations all vary," said Greg Ericson, chair of the city finance committee.

"But it is a significant reduction in what is essentially the take-home portion of your [pay]."

In 2018 a councillor'stotal salary and allowances was $25,266.For the mayor it was $68,820.

Making council 'whole'

Ericson said the portion of the salary that was tax-free was essentially meant to address the costs of being a city councillor.

"There was money built into your pay that would be addressing, say,internet services at home, home office expenses, travel around the community," he said.

Ericson said the committee asked staff to look at what other cities have done to make their council "whole" after the tax changes.

Last November, Saint John council voted to raise their pay by about 10 per cent to compensate for the loss of their tax-free income.

Ericson said Fredericton councillors could see a pay raise, but that they wouldn't know for sure what form compensation would take until staff completes their report.

Ericson said he expects the staff recommendation would be ready by the next finance committee meeting and payments could be made retroactively, asthe new tax rules have been in place since January.

He said he knows the optics of councillorsgivingthemselves a pay hikewhen the city is showing financial restraint aren't great, but added that having insufficient compensation packagescould be a barrier to attracting qualified people to run for council.

Larger report

City staff have also been asked to look intocouncilsalaries in another report that wouldgo beyond just the tax-free portion to examine issues with compensation levels in general.

"How should we remunerate council and to what extent," said Ericson.

"We're below the provincial average when it comes to council remuneration If you look at private sector boards, we're under 50 per cent."

The report into the overall council salary is expected before the 2020 municipal election.