Whitehorse Mayor Dan Curtis says the pay hikes are needed offset a change in federal tax policy for municipal politicians. (Joel Krahn/Yukon News)

Whitehorse council mulls pay bump to make up for tax change

Federal government eliminated rule that made third of council pay tax-free

Whitehorse city council is being asked to consider a bylaw that would increase the annual salaries of councillors and the mayor to account for a change in federal legislation that will see municipal politicians across the country paying more taxes.

Previously, municipal politicians were allowed to deduct up to one-third of their salaries from their taxes. That one-third was considered to be related to “necessary expenses incidental to the discharge of the duties of council members,” said manager of corporate service Valerie Braga at the standing committee meeting Sept. 5.

In 2019 this “long-standing practice of municipal governments across Canada will end,” which means that, unless the salaries of council members are adjusted accordingly, “net pay will be significantly less,” she said.

“With the change to legislation, effectively all of your salaries would go down by (the deductible amount),” Braga told council.

The previously-deductible amount was related only to income from council’s municipal positions, not to income from other sources.

Braga said the increase was meant to “level the playing field,” so that council members would not lose a portion of their income. The salary adjustment would mean that council’s take-home pay would remain the same “within five dollars.”

Mayor Dan Curtis said the proposed changes to salaries are not “an increase, but an adjustment,” which would help the city attract citizens to run for council.

Currently, the annual salary for council members is $20,500, although the mayor makes significantly more at $88,000. The adjustment would increase a councillor’s salary by $3,800, to $24,300. The mayor would get a $12,600 increase, bringing the office’s salary to $100,100.

Curtis acknowledged the change would shift the burden of paying the extra taxes to Whitehorse ratepayers. But he said councillors work hard for their salary and won’t take home more money under the new tax rules.

The increase will be “revenue-neutral” for councillors, he said, and without it they “may take a 23 per cent pay reduction.”

“I think we can all agree … remuneration of $20,000 for council is not unrealistic,” he said. “They work very, very hard.”

With six councillors and one mayor, taxpayers would shell out an extra $35,000 in council salaries.

The proposed bylaw would only take effect after the next election in 2018.

During the question period following the standing committee meeting, Curtis said he planned to run for mayor again next year.

“I’m definitely going to seek another term. I’ve never had a job I enjoyed so much,” he said.

Council will give the bylaw first and second reading at the Sept. 11 regular council meeting.

Contact Lori Garrison at lori.garrison@yukon-news.com

An earlier version of this story gave an incorrect figure for councillor pay. City councillors currently earn just under $20,500 per year.