Nfld. & Labrador

Ending tax breaks for council members will sting municipalities, say mayors

Most council members in Newfoundland and Labrador are paid part-time or barely at all for responsibilities they say are full time.

Mayors of St. John's, Corner Brook and Wabush say they're not in it for the money

Corner Brook Mayor Jim Parsons says the loss of the tax exemption may be swallowed by the City of Corner Brook. (Colleen Connors/CBC)

Mayors in Newfoundland and Labrador say the federal government's move to get rid of tax breaks for elected municipal officials will punch them right in the pocketbooks.

"To reach in our pockets again and to take that little perk that you were getting? I don't like it any time when government's reaching into my pocket and taking anything, and nor should anybody else," Ron Barron, mayor of Wabush, told CBC's On The Go.

Barron is one of many mayors in the province who don't make a full salary for their work in their municipality's top seat. He said he takes home just $9,200 a year as mayor, a sum he calls "a pittance."

"We're not in it for the money," he said. "We all get involved to make our cities better."

Wabush Mayor Ron Barron says the $9,200 he gets paid annually is 'a pittance.' (CBC)

For decades, council members in Canada have been exempt from taxes on a third of their income. But the 2017 federal budget eliminates that perk as of January 2019.

The exemption was intended to make a stint in municipal politics more appealing, said St. John's Mayor Danny Breen, and to help cover those costs councillors incur as a part of their role as leaders.

The costs include tickets to shows, fundraisers and dinners, he said, and mileage outside of regular council-related trips.

"You're always trying to engage as many people as you can and you try to get to everything you can," Barron agrees. "So you're always out of pocket, your gas going to those events or whatever, and none of that's covered by our council."

The tax break allowed municipalities themselves to save a few dollars in their budgets, said Corner Brook Mayor Jim Parsons, by enabling their council members to cover some of those incurred costs with the tax breaks, rather than claiming them for reimbursement from the town or city.

"I think municipalities do pinch pennies better than any other form of government," he said. "I guess it's just another thing we have to deal with."

Councillors paid 'a pittance'

It's an especially big blow for councillors in smaller municipalities. Many towns outside of St. John's have very small budgets and pay their elected officials honorariums or part-time salaries for what they say is full-time work.

Barron said Wabush's entire budget to pay councillors is $24,500.

Parsons said he gets a part-time wage for his position as mayor, which he says is a full-time position.

St. John's Mayor Danny Breen says he incurs a lot the costs associated with being mayor. (Jeremy Eaton/CBC)

Breen makes nearly $130,000 a year, and said the elimination of the tax break will work out to a loss of between $400 and $500 "every couple of weeks."

"It's a significant difference," he said.

Corner Brook could foot the bill

Breen said the City of St. John's will not be adjusting its budget to make up the difference in the salaries of its councillors, mayor or deputy mayor.

Neither will Wabush, said Barron.

But the City of Corner Brook may be swallowing that cost. Council will be voting on a motion to amend salaries for elected officials so they'd be taking home the same amount when the tax exemption stops in January.  

"I'm going to lose $3,200 if the motion doesn't pass," Parsons said.

With files from On The Go

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