The elimination of the one-third tax free portion of elected officials’ salaries could impact Wellington North to the tune of about $16,000 annually.
Township treasurer Kimberly Henderson presented a report at the July 10 council meeting outlining the changes to council’s remuneration.
The federal government plans to remove the long-standing tax exemption to one third of the salary paid to an elected member of council. The tax-free portion was deemed to be for “expenses incurred in the discharge of the member’s duties.”
The change is to take effect on Jan. 1, 2019 during the next term of council.
Henderson stated it would “reduce the mayor’s annual net ‘take home’ pay by $2,461 and reduce each councillor’s net pay by $1,361” – for a total of $7,903 for council.
She also noted that converting to a fully taxable remuneration would increase the township’s portion of Canada Pension Plan (CPP) and Employer Health Tax (EHT) contributions by $2,185 annually.
Henderson stated the mayor’s salary would have to increase by $3,239 and councillors’ salaries by $1,791 in order to maintain their current net pay.
This would increase the CPP and EHT contributions by another $717. The township also loses a GST/HST rebate for one-third of the remuneration paid to council.
“To maintain current net pay levels that are fully-taxable, the total cost of increased employer contributions and loss of GST/HST rebate would be approximately $16,234,” Henderson stated in her report.
“It’s certainly an eye opener, that’s for sure,” said councillor Steve McCabe.
CAO Mike Givens said the federal government’s plan was “not well received across the province” and suggested sending a letter to Perth-Wellington MP John Nater.
Council accepted the report and directed staff to send a letter voicing their opposition to the removal of the tax exemption.
