Edmonton council bumps salaries to account for federal budget changes

Salaries and other compensation for Edmonton's mayor and city councillors will become fully taxable this fall, at a cost to taxpayers of about $325,000.

Councillors vote to ensure take-home pay remains the same following the loss of a tax-free portion

Edmonton city councillors voted Tuesday to eliminate a tax break on their salaries, but will increase their wages to make up the difference, so take-home pay remains unchanged. (Lydia Neufeld)

Salaries and other compensation for Edmonton's mayor and city councillors will become fully taxable this fall, a move expected to add $325,000 to the budget for council salaries.

As part of the federal budget introduced in March, Ottawa announced it will end a decades-old tax break for certain elected officials, including Edmonton's city councillors.

Currently, Mayor Don Iveson and councillors don't pay taxes on one-third of their incomes. The exemptions are meant to cover the expenses of public service work.

But with the federal government changing the rules, city council voted Tuesday to eliminate the tax break and have salaries fully taxed as of Oct. 24, after the next municipal election.

The intent is to have individual council members' take-home pay remain unchanged.

But to account for the new approach to taxation, salaries will increase by about $325,000 a year in total.

This year, the mayor is collecting a salary of $173,269, compared to councillors at $98,362. The taxable equivalents to those current salaries have not yet been fully calculated, city officials say.

"Those calculations are complex, and contingent upon other pieces of legislation, and will be performed in the near future," city clerk Linda Sahli said in an email Wednesday.

But previous city figures show that the mayor's 2013 salary of $163,928 was equal to $198,523 if fully taxable. The $90,788 earned by each councillor that year was $107,127 if fully taxable.

In 2013, an independent council compensation committee said the added financial cost of moving to a fully taxable pay system would be outweighed by other benefits, such as supporting openness and transparency, fairness, direct comparison, and ease of understanding to the public.

The federal government plans for its tax changes to take effect no later than Jan. 1, 2019.

City council voted to make the change before this fall's election to provide clarity to election candidates and to avoid having to adjust the next council's pay mid-term.

With files from Lydia Neufeld