Calgary city council dealt with their annual pay raise in December, and it was not a pretty affair. For reasons I do not quite understand, there was a great deal of confusion surrounding this process. Based on a post by Councillor Farkas, there was a belief that council was due to get a 2.3 per cent pay increase. Councillor Farkas proposed a five per cent pay decrease. The 2.3 per cent figure turned out to be based on old information, and the mayor asked for a retraction and an apology. In the end, Councillor Farkas was kicked out of the council meeting.
Calgary city council receives changes in their remuneration each year based on the overall change of wages in Alberta as given by Statistics Canada’s publication Average Weekly Earnings. I do not understand how there could be any confusion over what the pay change would have been, as it is a simple matter to just look this up in the publication. Eventually someone did this, and it turned out that council actually received a small pay decrease.
When this was all over, some councillors went into public relations mode, congratulating themselves on what good people they were for taking a pay decrease, and also what good people they were to not decide their own pay change as it is based on a rule that is out of their hands.
While I am in favour of removing the right to decide pay changes from council, I do not think basing these pay changes on Average Weekly Earnings is a good idea. As oil and gas is the dominant business in Alberta, this index is heavily weighted toward whatever is going on in the oil and gas sector. From a public relations perspective, council was able to claim a victory on this one due to the extremely poor state of the oil and gas sector in Alberta. At some point, this will turn around and the sector will become healthy again; this is part of the normal cycle. It is hard to believe this at the moment, given the nature of this downturn, but we recovered from the disaster of the early 1980s. Once the turnaround comes, council may face a public relations nightmare. It is not unusual to see this index increase by five to six per cent in any given year during boom times. I would hope that these kind of raises for city council would outrage the average citizen. At one point, the Alberta Teachers’ Association actually had a collective agreement where their pay increases were based on this same index. That is long gone, and it should also be long gone for city council.
If council truly wants to have nothing to do with their pay increases, they should bring in some sort of an outside compensation expert to decide each year. However, don’t hold your breath waiting for this to happen. I suspect that a good compensation expert would find the mayor and council are actually overpaid.
Frank Atkins is a senior fellow at the Frontier Centre for Public Policy.