+ RMA Rural Municipalities
of Alberta

Resolution 8-19S

Reinstatement of the Municipal Officer’s Expense Allowance

March 20, 2019
Expiry Date:
April 1, 2022
Active Status:
Clearwater County
2 - Central
Vote Results:

WHEREAS until the 2019 tax year, a municipal corporation or board could pay a non-accountable expense allowance to an elected officer to perform the duties of that office; and

WHEREAS until the 2019 tax year, if the municipal officer’s expense allowance was not more than one-third of the officer’s salary and allowances it was not required to be considered as “employment income” on the employee’s T4 slip; and

WHEREAS federal Bill C-44, which received Royal Assent on June 22, 2017, eliminated tax exemption allowances for members of legislative assemblies and certain municipal officers; and

WHEREAS the municipal officer’s expense allowance tax exemption was a tool that assisted municipalities in keeping municipal council honorariums lower, thereby having less impact on the local taxpayers; and

WHEREAS the elimination of the municipal officer’s expense allowance has required many municipalities to increase municipal officers’ compensation to offset the difference in compensation, thereby increasing the tax burden locally;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta requests that the Federation of Canadian Municipalities ask the Government of Canada to consider reinstating the municipal officer’s expense allowance.

Member Background:

Government of Canada – Municipal officer’s expense allowance:


Bill C-44: http://www.parl.ca/DocumentViewer/en/42-1/bill/C-44/royal-assent

Federation of Canadian Municipalities: Change in “One-Third” Federal Exemption for Elected Officials – A Guide for Canadian Municipalities https://auma.ca/sites/default/files/fcm_taxexemption_guide.pdf.

RMA Background:

RMA has no active resolutions directly related to this issue.

Government Response:

Thank you for your resolution submission to FCM about the One-third Tax Exemption for Municipal Officers. We understand that this issue is an important concern to your community and we appreciate you bringing it to the attention of FCM.

Staff have reviewed the content of the resolution and categorized it as Category D – In accordance with existing FCM policy. This category contains resolutions that have been considered by FCM in the previous three years or that are in accordance with FCM’s standing policy and advocacy priorities. In this case, the resolution will be received by the Board of Directors, at it’s September 2019 meeting, for information only. More details on FCM’s resolution procedures can be found here.

FCM looks forward to continue working with you and your community in representing the municipal voice at the federal level.


The Federation of Canadian Municipalities’ (FCM) response indicates that they have categorized the resolution as “Category D.” According to FCM Procedures for Resolutions, Category D resolutions are defined as follows:

this category contains resolutions on issues dealt with by FCM in the previous three (3) years or that are in accordance with FCM’s standing policy and advocacy priorities. These resolutions will be received by the Board of Directors for information only. FCM staff is authorized to inform a sponsoring local government or affiliate member that its resolution will be categorized as “D”.

Based on this categorization, FCM is already advocating for the return of the municipal officer’s expense allowance. RMA is aware of a guide developed by FCM titled Change in “One-Third” Federal Tax Exemption for Elected Officials: A Guide for Canadian Municipalities that is intended to support municipalities in understanding the implications of the change and considering various options for addressing the elimination of the exemption, including increasing elected official salaries and expanding expense policies.

RMA is also aware of a response that the federal Minister of Finance provided to FCM on this issue, which stated the following:

Government took steps to bring the tax treatment of non-accountable allowances to municipal office holders in line with that afforded to other employees. An employer may reimburse work-related expenses on a tax-free basis, but non-accountable allowances may substitute for salary and are thus taxable.

The letter also indicated that the federal government was not planning to reconsider its decision on the issue. Although the finality of the federal decision is disappointing, the letter provides confirmation that FCM has advocated on this issue, which is the intent of the resolution. Therefore, this resolution is assigned a status of Accepted.

Federal Ministries and Bodies:
Federation of Canadian Muncipalities
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