Cities should scrap mayors’ tax-free allowances, group says
Canadian Taxpayers Federation calls for greater transparency
By Daniel McHardie, CBC News
Posted: Oct 9, 2012 5:46 AM AT
Last Updated: Oct 9, 2012 1:19 PM AT
New Brunswick's eight cities are still offering their mayors an outdated payment system of salaries and tax-free allowances similar to a plan scrubbed by provincial politicians several years ago.
CBC News requested a detailed breakdown of all public funds paid to the mayors of the eight cities in September once municipalities became subject to the Right to Information and Protection of Privacy Act.
While every city sets out its own salary and expense policies, each mayor is given a tax-free allowance of roughly one-third of their salary, in addition to the other publicly-funded perks.
Kevin Lacey, the Atlantic director for the Canadian Taxpayers Federation, said citizens should be irked by this policy.
Lacey said the tax-free allowances distort the public's understanding of how much mayors actually receive for performing their roles.
"These are a bad idea because they don't give taxpayers a true picture of what a politician is getting paid by the people that they are supposed to represent," Lacey said.Kevin Lacey of the Canadian Taxpayers Federation says cities should end the system of tax-free allowances for mayors. (CBC)
"That is why they should be eliminated. At the end of the day, taxpayers are owed a clear answer for what their politicians are earning and what they are expensing."
Each council in New Brunswick's eight cities has set out its salary and expense system in a bylaw.
Many city councils approved a salary level for their elected officials on a specific date and then adjust it annually for inflation.
So it can be difficult to easily determine how much a mayor is paid without knowing the inflation rate for every year since the bylaw was passed.
Miramichi, however, sets its mayor’s pay differently. In the northern city, the mayor's salary is fixed by the prevailing labour hourly rate.
Tax laws also allow them to set aside up to 30 per cent of their salary in the non-taxable allowance.
4 biggest cities
So, Fredericton Mayor Brad Woodside, the longest-serving city mayor in New Brunswick, earns a base salary of $36,957. But Fredericton taxpayers also shell out $15,833 in the tax-free allowance for their mayor.
Woodside also has other taxpayer-funded benefits, such as a car allowance and a communications budget, that brings his total remuneration up to $68,996.
In addition, Woodside is reimbursed for his expenses. The city had not yet disclosed Woodside's travel expenses for the last year.
The mayors of New Brunswick's three other largest cities receive similar pay packages.
Saint John's mayor earns a base salary of $38,000 and a $19,000 tax-free allowance, according to its 2004 bylaw.
Moncton Mayor George LeBlanc has the highest salary of the mayors of the province's three largest cities.
Moncton pays its mayor $42,619 and there is a $21,309 allowance with the job. LeBlanc's car allowance and mileage is not factored into these figures.
In the last year, LeBlanc has also collected about $1,000 in per diems and another $1,000 in travel expenses.
Dieppe is New Brunswick's fastest growing city but its pay system is lower than the larger cities.
According to documents released to CBC News, former Dieppe Mayor Jean LeBlanc was paid $21,686 between Sept. 1, 2011, and May 14. LeBlanc did not run for re-election in this year's municipal election.
Dieppe Mayor Yvon LaPierre has been paid $8,260 in salary from June 1 to Sept. 1.
Dieppe's 2007 bylaw also set out an $8,666 allowance and $6,000 in general expenses. The general expenses are paid monthly in 12 equal installments.
In addition, LeBlanc was paid about $3,700 for other expenses in the last year and LaPierre has been paid $1,900 since being elected.
Smaller cities, similar pay structures
Newly-elected Edmundston Mayor Cyrille Simard walked into a similar remuneration scheme when he defeated the northwestern New Brunswick city's incumbent mayor in the May 14 election.Campbellton Mayor Bruce MacIntosh has a salary of $17,370, which is the lowest of the eight cities. (CBC)
The amount Simard receives in salary and allowances is less than his counterparts in the province's three largest cities but it is similar to the mayor of Dieppe.
Simard will have an annual salary of $26,876 and a tax-free allowance of $13,437. But Simard can also claim expenses for city work.
In the first four months as mayor, Simard has charged $1,015 in expenses for work he's done as mayor.
By comparison, Simard's predecessor Jacques Martin billed Edmundston taxpayers $9,338 for work he did before the election.
Miramichi Mayor Gerry Cormier has a total salary of $24,747, which includes his allowance. In the last year, he was paid $31,512 in salary, allowance, per diems and expenses.
The northern cities of Bathurst and Campbellton offer the smallest pay packages for their top elected officials.
Bathurst pays its mayor, Stephen Brunet, $19,577 in salary and $9,788 in an allowance. In the last year, he also charged $8,877 in expenses.
Campbellton Mayor Bruce MacIntosh has the smallest salary of the province's eight city mayors.
He earns a salary of $17,370 and an allowance of $8,685. In the last year, he has also been paid $4,980 in per diems and $9,077 in other expenses.
Provincial rules changed
The tax-free allowance given out to city mayors is not unique. In fact, New Brunswick MLAs were paid in a similar fashion until April 1, 2008.
Under the old plan, MLAs would earn $47,000 in salary and a non-taxable allowance of roughly $23,000. But that was altered so that provincial politicians would earn a straight salary of $85,000, which represented essentially the gross wage offered under the old system.Premier David Alward reformed MLA pensions in March 2011. (CBC)
While the change added greater transparency to how MLAs were paid, it did not come without controversy.
The legislature unanimously approved the changes on the day the legislature and much of downtown Fredericton was bracing for a flood.
Those changes actually caused the pension levels of MLAs to jump because their pensions were based on their salaries, which had been increased by the provincial reforms.
Premier David Alward, who had originally supported those changes while in opposition, announced some of those contentious pension reform elements would be rolled back.
The Canadian Taxpayers Federation's Lacey said cities should also end the tax-free allowance and move to a more transparent system of monitoring the expenses of elected officials.
Lacey called the existing pay scheme for city mayors a "dying breed of a way to fund politicians."
"So really what is surprising in these number is so many of these still exist in New Brunswick, when they are being eliminated in seemingly every part of Canada," he said.
Tax-free allowances, he said, were originally established in 1947 so Members of Parliament could purchase train tickets to Ottawa from their ridings. He said they were not intended for cars and other expenses for municipal politicians.
Instead of the existing pay method, Lacey said all payments for salaries and expenses should be posted online. In addition, he said any expenses should have a copy of the receipt attached for greater transparency.
He said Toronto is following this system and could serve as a model to others.
Lacey said citizens should not just have a right to view salaries and expenses but should also have a role in setting those rates.
"Citizens, themselves, should have a say in the setting of these salaries and their benefits," he said.
"Most times these benefits are voted on by the politicians themselves and that has to change before we can get the whole system reformed."
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