Mayor Nolan Crouse said he’ll defend himself in writing when it comes to questions about his contract under Crouse Developments Inc. to serve as board chair for the Capital Region Board.
Questions have arisen about why Crouse used his corporation to enter into the contract with the CRB and the disclosure of his monthly remuneration as board chair, which is $2,000 a month.
Crouse said other board members were aware of his pay and it was set out in policies that were public.
“The inference that it was not public is wrong,” Crouse said Friday. Previously Crouse has told the Gazette he used his company at the request of the CRB, something current CEO Doug Lagore has confirmed.
As of Oct. 1 Crouse will be paid personally rather than through Crouse Developments Inc.
While no one’s sure when the policies were posted online, Crouse said since the CRB’s a public body they would have been available for the asking.
He did note it’s still difficult to find some things on the CRB’s website.
“The history of stuff is pretty poor,” he said.
A freedom of information request was needed to access Crouse’s board chair expenses because Crouse Developments is a private corporation under contract with the CRB.
Coun. Cam MacKay has a motion before council that would require Crouse’s CRB board chair remuneration to be disclosed via the City of St. Albert’s books for the sake of accountability and transparency.
A vote on MacKay’s motion – which includes some calculations of Crouse’s pay that some of council took issue with on Monday – is delayed until Oct. 20.
Council policy requires any per diems paid by the CRB to be given to the city, which would then pay the councillors via their expense claims.
Crouse’s CRB per diems do not appear in the city expense claims available online, which go up to the second quarter of 2014, but he said they will be appearing on his future city expense claims.
The Crouse Developments Inc. invoices to the CRB show per diems being charged in addition to the honorarium.
Crouse said St. Albert’s policies don’t address a salary and per diems associated with being CRB board chair.
Tax benefits?
Crouse Development Inc. is a company that was incorporated in the mid-1990s. Crouse and his wife are the only shareholders.
Hugh Neilson, a chartered accountant who is an independent contractor to both Kingston Ross Pasnak LLP and Video News Inc., outlined some information on the possible tax benefits to funnelling funds through a corporation rather than receiving them personally.
Neilson said the tax system generally follows the idea that the total taxes paid on a dollar of income should be the same whether it’s as direct income or as a dividend from a corporation. The result is usually fairly close, Neilson said.
“The big advantage arises when the income isn’t needed for personal spending, so the corporate tax can be paid now, and the personal tax delayed for many years until dividends are taken,” Neilson said in an email.
Income-splitting could be another possible advantage, he said, which can be ineffective if the child is under 18 due to some rules in place, but can be effective in other circumstances.
Neilson noted there is a concept of personal services business. There have been rule changes to impose a high corporate tax rate on businesses that are considered a personal services business.
Neilson said the test on whether a company would be considered a personal services business is if the person could be reasonably considered an employee of the person to whom the services are provided.
