Grey County has increased the rate it pays for mileage when staff and councillors use their personal vehicles for business purposes.
At its meeting on May 23, county council voted in favour of a staff report and recommendation to increase the rate of mileage paid from 50 cents per kilometre to 70 cents for the first 5,000 kilometres and 64 cents thereafter.
CAO Kim Wingrove explained that the county’s current mileage policy was implemented in 2008/09 and has become antiquated with regards to Canada Revenue Agency (CRA) rules on reimbursements employees receive for the use of personal vehicles.
“There has been a growing gap between the county formula and the CRA rates,” Wingrove said.
The CAO said if the rate of reimbursement is too high or too low it could trigger the CRA considering the amount paid as a taxable benefit and to be included as part of the employee’s income.
In turn, this would require deductions for Canada pension, employment insurance and income tax and would make employees eligible to claim all their motor vehicle expenses on their income tax.
“There would be quite a bit of administrative burden on everybody,” said Wingrove.
The new 70 cents per kilometre rate, which is considered reasonable by the CRA, will become effective on June 1 and county staff expect it will cost $34,000 across the organization for the remainder of the year. Departments have been asked to make up the difference within their budgets and any shortfall will be funded through the county’s one-time reserve fund.
Members of county council were supportive of the change, but asked staff to consider other alternatives to staff using their vehicles including: rental cars and pool vehicles owned by the county.
Wingrove said such measures have been considered in the past. However, she said the county’s large geography limits the effectiveness of rentals and pool vehicles.
“Where does the pool vehicle sit to make that useful?” she said. “Is it cost-effective? There is a lot to consider. We’ll continue to look at that.”
