(08 July 2018) – In the final year of every Council term, before an election takes place, a citizen’s committee reviews the salaries paid to the mayor and councillors. Compensation packages are compared to those paid in other cities. Then it recommends where our people fit in with the others. It is a straightforward process that keeps a firewall between the councillors and their pay schedule. Raises come into effect after the election.
As an example, the 2014 committee found that our mayor was underpaid in comparison to other Ontario cities. It recommended that the job rate should go up by 26 per cent and that the increase be phased in over the four-year term. Cam Guthrie won the 2014 election and has been receiving this raise in pay in addition to the regular increases received by the city’s non-union management staff.
This is the way it should go. The committee is appointed, gathers the information, analyzes it, and makes its recommendation. Council approves the recommendation and life goes merrily along. It worked well, until this year. On June 25 someone threw a spanner into the wheels of city hall and knocked it off kilter. By an 8 – 5 vote, councillors decided to go against the citizen’s committee recommendation.
A couple of years ago, the federal government cancelled a tax exemption that was available to elected officials at all three levels of government. They had been receiving one-third of their salary as a non-taxable expense allowance. The 2017 federal budget took this away, effective next January. This means that starting in the 2019 tax year, our councillors and mayor will pay income tax on 100% of their salary. One effect of this is that next year, the mayor’s after-tax take home pay will be quite a bit lower than this year.
None of this surprised anyone who was paying attention. The Association of Municipalities of Ontario (AMO) launched a campaign and lobbied the government to cancel this budget measure. So far, without success. The review committee knew about this change to federal tax policy and considered its implications in detail. They determined that even with this change, our mayor’s salary would still be in the target range. The recommendation was to make a slight upward tick in councillor’s salary and keep the mayor’s gross pay where it is. The committee members crunched the numbers and reached their conclusion.
It was a fair one. As the Stranger said to the Dude in The Big Lebowski, sometimes you eat the bear, and sometimes the bear eats you. I don’t know, but maybe a chunk of the take home difference will be made up by a larger tax refund at year end. Maybe not. It’s something the committee could have another look at after the dust settles. But this time, the Dude didn’t abide. This time, the bear ate the committee. Or it ate the committee’s report. Not the whole thing. Just the part about the dude’s salary.
On June 25, the councillors – who had not been part of the citizen’s committee meetings and had not assembled and analyzed the available information – decided to give the mayor a raise after all. The recommendation had been to keep the mayor’s gross salary for 2019 at the same level as 2018. Council’s decision was to keep the mayor’s net salary at the same level. Doing this requires an increase from $122,724 per year to $152,500.
Mark MacKinnon, the councillor who moved the motion told me in an e-mail that he didn’t think the mayor or anyone else who voted on it was in a conflict of interest.
“No one on council who voted on this motion has a pecuniary interest,” he wrote, “because the compensation is set for the next council term. Just like the previous council voted on compensation for this current council, all councils set remuneration for the following term. Consequently, no direct or indirect pecuniary interest exists.”
In a perfect world, he might have a point. But in this world, this year, nine of the 13 have already filed nomination papers to keep their jobs. One of them is the mayor who stands to receive the $30,000 raise. He voted in favour of it, hoping against hope that he wins another term. His odds are very good since, as of Sunday morning, no one is running against him. Anyone who decides to contest the election now is going to have a steep uphill campaign to fight. The mayor’s office is Guthrie’s to lose.
Council went against the spirit and the purpose of the review committee on June 25. Councillor MacKinnon’s motion put the mayor in a clear and obvious conflict of interest. Guthrie should have recognized that and excused himself from the chamber until the discussion and vote was concluded.
Council should then have accepted the committee’s recommendation and asked them to follow up on the report by investigating what, if anything, should happen next. Transparency demands that they not only do the right thing but are seen to be doing it. As it stands, the optics are terrible. It’s never too late to take a couple of steps back and do it over again.