The introduction of an upcoming federal tax on municipal councillor remuneration has placed the Town of Gander in a tough position.
In bringing down its budget for 2019, council approved a $35,000 increase to its overall stipend to help offset the federal tax. Council’s allocation for the upcoming year is $284,800, or 1.9 per cent of the town’s operational budget.
It was noted in the budget, the stipend adjustment would not result in a net increase for the mayor or council.
Stipend increases have been a bone of contention in Gander since 2014, when council approved major increases in pay – 44.92 per cent for the mayor, 41.63 per cent for the deputy mayor, and 43.09 per cent for councillors – to align itself with the rest of the province.
In a legal sense, municipalities can award stipends up to two per cent of a town’s operating budget.
While Councillor Gina Brown didn’t agree with the federal tax changes, she said there is a need to offset the tax.
However, Brown doesn’t believe council should be in the position to make that decision.
“We are in a dubious position as municipal leaders to be in a position to negotiate or make changes to the amount of money we make,” she said. “That’s not necessarily a situation average taxpayers have, and I find it a very awkward position to find myself in.”
Brown said she would like to see some level of independent decision making when it comes to council remuneration.
“Because we are in a position to do this, it doesn’t necessarily mean it’s the right way to approach it,” she said.
In bringing forward her remarks, Brown said, in principal, she wouldn’t take an increase.
“I don’t agree with us making a choice to increase the stipend, and as a result… I will not be taking the stipend increase,” she said.
Councillor Oswald Fudge sided with Brown, stating he would not accept the increase either.
“If I was negotiating a raise with a company, that’s fine, but there is no negotiation here, we are doing it as a council,” he said.
The other four councillors – Tara Pollett, Brian Dove, Pat Woodford, and the mayor all weighed in on the discussion. While they felt it was a hard decision to make, they were willing to accept the increase.
Mayor Percy Farwell stated it’s not an ideal situation, but agreed with the decision.
Farwell said it’s about helping offset a federal tax that has been placed upon every municipality in the country.
By granting the increase, he said, it is helping maintain a level of compensation that councillors decided to run on in 2016.
“I regret that we have to do it, I don’t like the optics of it, I don’t like the fact that we set our own compensation packages, but it is the way it is,” he said. “There’s an increase cost to the tax payers of Gander, no question, but there is no increase, cash flowing into the pockets of council.”