Tax change brings cascade of pay increases for school trustees, councillors By: Bill Redekop  Posted: 7:00 PM CST Monday, Jan. 28, 2019 Last Modified: 9:22 AM CST Tuesday, Jan. 29, 2019 Updates

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The end of a federal tax perk is prompting once-in-a-lifetime pay increases for elected officials across the province, with trustees becoming the latest group to vote themselves double-digit raises.

St. James-Assiniboia School Division trustees recently voted to give themselves pay increases of up to 15 per cent.

The school board said the raises are to offset the elimination (on Jan. 1) of a longstanding perk that exempted trustees from paying tax on one-third of their compensation.

The increases are 15 per cent for the chairperson (bringing the role’s salary to $23,000), 12 per cent for standing committee chairpersons (salary now $19,000), and nine per cent for trustees (salary now $18,000).

SASD isn’t the only jurisdiction making such a move. Both Winnipeg School Division and Pembina School Division have also issued healthy raises to make up for the loss of the tax exemption. Indemnities went up 14 per cent for Pembina trustees, and about nine per cent for WSD trustees.

Elected municipal officials are also losing the exemption.

The Rural Municipality of Springfield council recently took the first steps to give its councillors a 20 per cent pay raise. Elsewhere in eastern Manitoba, Brokenhead and both the RM and Town of Lac du Bonnet are in the process of boosting council’s compensation.

The federal tax perk does not apply to Winnipeg city councillors, who traded away their tax-free exemption several years ago.

While the increase passed quietly in the WSD, many people are irate in St. James-Assiniboia.

“(School trustees) aren’t taking a pay cut. It’s just they weren’t paying taxes like everyone else does,” said Tracey Drexler, a mother with a child in the division’s school system. “I pay taxes on my income. Why shouldn’t they?”

Drexler added the optics are terrible coming at a time when the province is holding the line on education spending and trying to freeze civic employee salaries.

“People are horrified,” said Drexler, who has been active on social media on the issue. “What other profession gets to vote themselves a raise?”

She is organizing “a peaceful protest” for the next school board meeting Feb. 12.

“People are horrified. Who has been active on social media on the issue. “What other profession gets to vote themselves a raise?” – Tracey Drexler

A telephone interview was scheduled Monday with St James board chairwoman Cheryl Smukowich, but she cancelled at the last moment.

Is the federal government merely downloading taxes by eliminating the tax deferral?

Todd MacKay, prairie director of the Canadian Taxpayers Association, doesn’t think so.

“This is a perk that never should have existed and now it’s getting fixed,” said MacKay. “We’re all Canadians. We don’t like special exemptions for special people, whether you’re the mayor or the plumber.”

That does not mean that everyone who lost that benefit should immediately get a raise, he said: “It shouldn’t be automatic.” Rather, elected officials should consult with constituents before deciding.

“A lot of people are having tough times. A lot of people haven’t had a raise in years. This is a good time to show leadership and restraint rather than just automatically level out your pay,” MacKay said.

However, the Association of Manitoba Municipalities views it differently.

“A lot of people are having tough times. A lot of people haven’t had a raise in years. This is a good time to show leadership and restraint rather than just automatically level out your pay.” – Todd MacKay, prairie director of the Canadian Taxpayers Association

Joe Masi, AMM executive director, recently called ending the tax perk “an arbitrary pay cut.” The Federation of Canadian Municipalities has issued a guide to help municipalities respond to the tax changes.

In Pembina Trails, which passed its bylaw in 2018 to go into effect this year, trustees will be paid 14 per cent more: chairperson, $27,195; vice-chairperson, $24,974; and trustees $22,789.

In Winnipeg School Division, trustees received pay raises of just under 10 per cent. The chairperson’s pay rose to $29,500 from $27,000; the vice-chairperson to $27,000 from $24,500; and trustees to $24,000 from $22,000.

Alan Campbell, president of the Manitoba School Boards Association, said he is aware of the St. James payment increase and knows other school boards are considering similar moves. He expects more will adjust their indemnities.

The MSBA does not have a policy on the issue, and is letting each school board make its own decision.

Many are still undecided. The Louis Riel School Division has not made a decision at this time, said a spokeswoman.

There are 38 school boards in the province and about 280 trustees. School boards have either five, seven, or nine trustees each.

bill.redekop@freepress.mb.ca