At its meeting Tuesday night, Parry Sound Town Council voted 5-2 in favour of raising its members’ salaries by 30 percent retroactive to January 1st, 2019.

Councillors Paul Borneman and Bonnie Keith voted against the resolution.

Changes in Federal income tax legislation effective January 1st of this year has removed an important tax exemption for salaries paid to elected members of Council across Canada including Parry Sound.

Up until this year, Councillors were able to declare one-third of their council remuneration as an expense allowance incurred while performing duties as a Councillor, therefore making one-third of their salaries as Councillors tax-exempt.

As of January 1st, Councillors can no longer claim this one-third as an expense making their Council salaries 100 percent taxable resulting in a 30 percent reduction in their net salaries.

Council passed the pay hike resolution to make up the net loss.

PS Council Salary changes
Source: Parry Sound Town Council Agenda March 5, 2019

In its report, Staff makes the case that Council could have revoked the one-third tax exemption in 2003 but chose not to, saving Parry Sound taxpayers money from 2003 to  2018.

Staff estimates the one-year savings for 2019 would have been $36,452.

Council did, however, reject a motion that would have Staff prepare a follow-up report on group benefits options such as health and dental for consideration at a Council future meeting.

Council also voted in favour of directing staff to present a comprehensive compensation by-law for Council members to a future Council meeting.