Currently the Federal Government allows elected officials to receive a non-accountable expense allowance which permits elected officials to receive one-third of their salary as non-taxable. This Federal allowance was intended to allow officials to cover incidental expenses without submitting receipts. The 2017 Federal Budget removed the elected officials non-accountable expense allowance effective January 1, 2019.
Since the Town of Oliver’s Mayor and Councillors currently receive one third of their remuneration as a non-accountable expense this change will result in the one third being subject to tax and source deductions. The outcome of this change will be a reduction in net pay for the Mayor and each Councillor and an increase in Town of Oliver employer paid source deductions.
In order to offset Councils decrease in net pay an approximate increase for the Mayor is $2,425, each Councillor is $1,294, and each Water Councillor is $476. The Town of Oliver’s increase to employer paid source deductions would be approximately $423. The proposed increase in the indemnity would take effect January 1, 2019 in order to align with the Federal Governments elimination of the allowance. The ongoing adjustment to the Mayor and Councillors annual indemnity for inflation would be effective January 1, 2020.