BC’s Finance Minister justifies new Employer Health Tax amid complaints

VICTORIA (NEWS 1130) – B.C’s Finance Minister says she understands the rising pile of complaints against her government’s new Employer Health Tax, which went on the books of businesses across the province for the first time this year.

“I recognize change isn’t easy. I recognize this year has been a bit of an additional cost for businesses,” Carole James told reporters Wednesday at a news conference.

But, she says she believes the short term pain is outweighed by the long term gain for British Columbians overall.

RELATED: Act to create Employer Health Tax by Jan. 1, introduced in B.C. legislature

“Individuals are saving $900 a year. Families will be saving $1800 a year. Those dollars get spent directly back into businesses in communities,” she said, adding this year is a one-off for companies.

“Most large employers, in fact, were paying Medical Service Premiums (MSP). They saved 50 per cent last year, they saved 50 per cent this year. That will help them through this transition year. As of January first, Medical Services Premiums will be gone.

Although for businesses that weren’t previously paying employees MSP, they’re not saving anything.

RELATED: Brace yourself for new taxes and tax hikes in 2019: taxpayers group

Announced last year, the tax removes the burden from individuals to pay MSP premiums and places the bill on employers. Businesses and municipalities with payrolls of more than $500,000 a year must pay a 0.98 per cent tax on annual payroll, while those with payrolls of $1.5 million or more pay 1.95 per cent. Hospitals, schools and some charities are exempt.

The Canadian Federation of Independent Businesses said the tax is too hard for small companies. The Victoria Police Department recently cut a program blaming the cost of the new tax, and municipalities like Vancouver have taxes to cover the cost.

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