Pay cut looming for Edmonton mayor, city councillors

Edmonton city council will vote Tuesday on a pay cut for councillors and the mayor, recommended by an independent committee.

The proposed cut would reduce the mayor’s fully taxable salary by nearly $18,000. City councilors would earn about $3,300 less annually.

Mayor Don Iveson called an independent committee to review the salaries after a federal ruling in March determined municipal politicians could no longer receive a third of their salary tax-free. 

“The only way that we can work through this cleanly and transparently for the public is to have the independent committee do it,” Iveson told reporters Thursday, after the committee released its recommendations.

“Their report is very thorough and looks to external comparables for their rationale,” Iveson said.

Calgary a blueprint

The committee recommended Edmonton’s mayor and city councilors drop their salaries to match what their counterparts in Calgary earn.

“The committee determined that the City of Calgary, as another large Alberta jurisdiction, was the most appropriate municipal comparator for the City of Edmonton,” reads the committee’s report.

As such, the committee recommended Edmonton’s mayor earn a fully taxable salary of $200,747.

Accounting for the federal ruling to eliminate tax breaks, the mayor’s current fully taxable income is equivalent to $218,200.

City councilors should earn $113,416 annually, the committee determined, instead of $116,729.

“They don’t have a vested interest in this at all and they will recommend what they think makes sense on behalf of the public and taxpayers,” Iveson said. 

“Council has always referred to them, for the most part, and in this case I don’t foresee any resistance — certainly not from me — about the recommendations they’ve made.”

Changes to national tax act

Independent committees have reviewed council’s compensation every two years since 2000.

Five years ago, the committee recommended elected municipal officials in Edmonton abandon the tax cut they received on one-third of their income. Council declined the 2012 recommendation, but the federal ruling in March forced its hand.

The 2017 federal budget ammended the national Income Tax Act to eliminate the one-third tax free option across Canada by 2019.

In response, Edmonton city council announced all municipal officials’ salaries would become fully taxable once the new council term starts in October 2017.

Iveson said deferring to an independent committee was the most transparent and objective way to make the transition.

The five-member volunteer group took the federal budget ruling into account before writing its report. The proposed pay cut will take effect in October, if it is approved by council Tuesday.

Iveson has filed a notice of intent for the upcoming municipal election and is seeking another term as mayor.

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