Bravo to the City of Calgary, which just took a significant step towards creating transparency in the way we pay our elected officials.

Starting as far back as 1947, elected officials in Canada have been able to claim one-third of their salaries tax-free - a perk reserved only for politicians.

This perk ends up masking the true compensation level of an elected official. Elected officials are able to advertise a lower salary than they actually enjoy. Of course, many will qualify their salary with an asterisk or footnote in small print denoting the one-third tax-free status, but few taxpayers are able to quickly quantify or understand the significance of this subsidy.

Furthermore, Calgary aldermen also enjoy various other perks and "allowances." For example, aldermen are paid an extra stipend for acting as deputy mayor, and for using their own car to travel to city hall, meetings and community events. Both of these "allowances" are non-receiptable, non-accountable, and just like their salaries, are one-third tax-free.

Since they're non-accountable and non-receiptable "allowances," aldermen don't have to turn in any proof that they used their payment for the stated purpose, nor do they have to do anything to qualify for it. In fact, aldermen don't even have to own or know how to drive a car to receive the car allowance. It's simply extra cash in their pockets.

But a lot of this is about to change here in Calgary.

Back in May, the Canadian Taxpayers Federation (CTF) made a submission to the Calgary Council Compensation Review Committee, expressing our displeasure with the lack of transparency in how we pay our civic politicians in Calgary.

The CTF forwarded to the committee recommendations to eliminate the one-third tax-free status for council, roll all of the non-receiptable, non-accountable "allowances" into the base salary, not allow any arbitrary wage increases, continue the practice of annually adjusting wages by the change in the Average Weekly Earnings of Albertans, and eliminate the severance payment that wouldn't even be available in the private sector.

The CTF is pleased to see the committee adopted a number of the recommendations, namely eliminating the one-third tax-free perk, and rolling the deputy mayor allowance into the base salary.

While this change is very significant for both the City of Calgary and for Alberta (as Calgary will be the first city in Alberta to adopt a fully taxable salary), Calgary is not the first government to make the change.

The cities of Vancouver, Regina, Mississauga, Burlington, Ottawa and Toronto have all eliminated this perk, as have MLAs in British Columbia, Saskatchewan, Manitoba, Ontario and Nova Scotia. Our federal MPs even vanquished this perk a few years ago.

Calgary city council showed a willingness to address these transparency issues and voted to adopt this new salary structure, with only three aldermen opposed (Andre Chabot, Dale Hodges and Helene Larocque).

Larocque laughably argued their salaries were already very transparent. She correctly pointed out aldermen have a base salary that is one-third tax-free, a deputy mayor "allowance" that is one-third tax-free, a car "allowance" that is one-third tax-free, a transition allowance, a pension, health benefits, a free parking spot, a flexible spending account and other perks. She claims that because the city doesn't hide these facts, they're obviously transparent.

There is, however, a big difference between disclosing this information and making salaries transparent. Further, even if the transparency issue were lost on Larocque, one would hope she should want, at the very least, to be subject to the same tax laws as the people she purports to represent.

Luckily, the rest of city council seemed to grasp that their compensation is far from transparent.

Ald. Gord Lowe stated that peoples' eyes often glaze over when he tries to explain the current pay structure. Ald. Ric McIver further pointed out that many friends suggested he'll now feel the same pain they do, by having to pay tax on 100 per cent of his salary.

While the CTF would have preferred the committee also roll the non-accountable, non-receiptable car "allowance" into the base salary, not arbitrarily give the next council a six-per-cent raise, and eliminate severance pay - it can't over-emphasized how important it is to take this large first step towards full compensation transparency.

Calgary's leadership has now put the focus on our provincial MLAs and the city councils in other Alberta cities to step up to the plate and eliminate their tax-free perks as well.