Arguments for pay raise may be compelling, but optics are bad

By Medicine Hat News Opinon on December 21, 2018.

This week Calgary councillors and the mayor accepted a pay reduction dictated by an annual automatic adjustment based on the average Alberta weekly earnings report.

It works out to a 0.08 per cent decrease kicking in on Jan. 1, 2019. It is not a huge reduction; councillors will get about $90 less annually and the mayor $160 less.

Calgary Mayor Naheed Nenshi commented on the “automatic process” being directly tied to the health of the economy and went as far as saying politicians should not be setting their own pay.

Also this week members of the Alberta Union of Provincial Employees, primarily those working for Alberta Health Services, concluded negotiations and settled for no raises.

Finance Minister Joe Ceci talked about the agreements reflecting the province’s fiscal situation. Other contracts with medical and pharmaceutical partners also had no increases in compensation.

In contrast, Medicine Hat City Council voted themselves a significant increase. It is important to note the increase is to compensate them for changes to federal income tax that would have seen them earning less if they’d not approved the increase.

This is the result of an item in the 2017 federal budget that eliminated the tax exemption on a portion of the salaries that were previously not taxable. Locally council voted to require taxpayers to chip in what the federal government is taking away.

Changes to federal tax exemptions are not new. Some are significant enough to be revealed when a federal budget is unveiled. Some you only become aware of when you have your accountant prepare your tax returns. Suddenly the receipts you have been collecting may no longer be of any use because a new rule might apply.

It is something we have all had to face from time to time — either a result of a change in federal income tax law or because a new carbon tax is introduced or the price of groceries is way above inflation.

For nearly all of us there is no recourse. We can’t go to our employers and demand a wage increase because our taxes have increased.

For that reason it seems particularly unfortunate that council voted themselves this change in salaries at this time. They have known since 2017 that the change was coming but waited until the last meeting of the year and the last item on the agenda to raise it.

Council has lots to be proud of including attracting new business to the area with the promise of more jobs. Some of those jobs have materialized, but there are still many people struggling to find meaningful employment and/or make ends meet on reduced salaries.

In Calgary the weekly earnings report indicated to that council that things are not going well for all Albertans. This may well be true for many Hatters as well.

Perhaps the arguments for the raise are compelling but the optics locally — and that is what the public sees — are not good.

(Gillian Slade is a News reporter. To comment on this and other editorials, go to https://www.medicinehatnews.com/opinions, email her at gslade@medicinehatnews.com or call her at 403-528-8635.)

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