When Amarjeet Sohi left his position on city council and was then elected as a Member of Parliament, there was a lot of criticism when he accepted a $46k transition allowance. Even current Ward 5 Councillor Michael Oshry seemed to find the transition pay a little distasteful:
Total Compensation
In 2016, the total compensation of Edmonton's Mayor was $279,404.11 and the total compensation for each of Edmonton's Councillors was $148,862.83.
| Mayor | Councillor | |
|---|---|---|
| Salary | $224,582 | $120,285 |
| RRSP Contribution | $24,704.02 | $13,231.35 |
| Vehicle Allowance | $17,161.44 | $8,406.96 |
| Transition Allowance | $12,956.65 | $6,939.52 |
| Total | $279,404.11 | $148,862.83 |
Background
Edmonton's city council does not set their own salaries and benefits. As of 2013, that is set by the Independent Council Compensation Committee. The goal with this committee should be obvious - it removes politicization of Councillor salaries. There can't be secret meetings of council to raise their own salaries by 60%. A councillor who has a thriving business on the side cannot move that salaries be reduced to $1 in order to remove his opponents from office. By and large, an independent committee setting council's salaries is a great thing.
The committee operated with a mandate of setting appropriate compensation, no later than January of 2013, with the following guidelines:
- Compensation must be sufficient to attract individuals from all walks of life
- Compensation must be commensurate with the responsibilities, accountability and time requirement required to hold public office
- Compensation should be reasonable in light of the City's goal for fiscal responsibility, as well as in light of compensation paid to other public offices in Alberta and elsewhere
- There needs to be a mechanism for periodic adjustments to the compensation, without full review
What was the result? Well you can view the full report but here's the summary:
Council Compensation should be fully taxable
The city of Edmonton, both currently and in the past, has 1/3 of their salary and other compensation packages be tax-free. This is perfectly allowed by the Municipal Government Act as well as the Federal Income Tax Act. The committee proposed that instead Council's compensation would be the full, gross amount (therefore no decrease in take-home-pay) and then be fully taxable. This would represent a small cost increase for the City of Edmonton, but the clarity and understandability for the public was deemed worth it.
This was the only item from the Committee's recommendation that council opted to not enact.
Annual Compensation Adjustment
Last year, council got a raise of 3.8%, and this year the raise is 0.88%, but how was this determined? Well, pretty easily (and algorithmically)! Council's compensation is adjusted by the 12-month average percentage change in Alberta Avenue Weekly Earnings from September to September. So council's raises are indexed to the average raise received by all Albertans in the past 12-months.
Note, that their compensation is out-of-date by one year. Just like when you receive your property tax assessment it assesses the value of your home last year, Council's raises are determined based on last year's values.
Base Compensation
In 2013, the committee found that the base compensation values for Councillor's and mayors were actually pretty accurate and in consultation with the community and experts they opted to leave the Mayor's base salary the same and increase Councillor pay by 2.5% for 2013 fully-taxable values of: $198,525 and $109,805 respectively.
Other recommendations
The committee recommended leaving all other compensation options the same as they were, which include:
- 11% of salary to RRSP or 12% of salary to a city-defined pension plan
- 16,495 (Mayor) or 8,015 (Councillor) vehicle allowance, indexed by the City of Edmonton Mileage rate going forward
- Inclusion in the City of Edmonton's Management Exempt Group benefits plan, as well as receive a $500 flex health spending account
Transition Allowance
And the final item in the committee's recommendation package was that Council continue to receive the current transition allowance of 3 weeks pay for each year of service, to a maximum of 36 weeks.
What is interesting is the specific wording of the recommendation by the committee (emphasis mine)
Recommendation: That City of Edmonton Members of Council continue to be provided with a transition allowance upon the conclusion of their service equal to three weeks salary for each year served to the maximum of 36 weeks.
Current: Members of Council are not eligible to receive unemployment benefits for the transition period to re-establish themselves back into the workforce upon vacating office.
Rationale: The existing transition allowance is modest, is comparable to other jurisdictions and to the public sector, and provides appropriate economic protection to citizens who must leave other employment to serve on city council.
Reading the text, it is pretty clear what the spirit of the recommendation is: Councillors are on a four-year contract, and if they do not get re-elected for another term, it can be a pretty jarring transition to get back into the workforce. Perhaps some of their professional skills are out of date. Perhaps some training has lapsed. They need some time and a bit of a safety buffer to return to regular life. The job that they left to run is not likely to be there 4+ years later.
Interesting as well are the comments "upon conclusion of their service" - was it really in the eye of the authors of that recommendation that leaving mid-way through a term is conclusion? Even moreso, the committee made specific references to re-establishing oneself during a transition period, which clearly quitting in the middle of one's term for a better, higher-paying job is not an example of.
Further Compensation Review
Another interesting note is that the compensation is to be reviewed every two terms - since it was enacted in 2013, that means the next review is slated for several years from now, 2021 after the conclusion of the 2017 term.
And now, because I feel that this post may have been just a bit too informative, I leave you with an inflammatory image:
