B.C. Finance Minister Carole James is on the defensive as opposition MLAs press her on a new health care payroll tax being implemented next year.
The new “employers health tax” takes effect in 2019 at 1.95 per cent for businesses with payroll of more than $1.5 million per year. Some businesses that already pay Medical Services Plan premiums on behalf of employees face the prospect of paying both MSP premiums and the new tax for a year, before the NDP government promises to eliminate MSP in 2020.
In question period at the B.C. legislature Monday, B.C. Liberal critics called the new tax “double dipping” and confronted James with examples of the impact. Surrey South MLA Stephanie Cadieux cited a non-profit organization in her constituency that is wondering what to cut with an extra $39,000 cost next year to pay the tax and the premiums.
@Stephanie4BC says Surrey non-profit paying extra $39K next year paying both MSP and payroll tax. James says Libs doubled MSP, it's a transition away from it #bcleg #bcpoli pic.twitter.com/NIY9iU8bi2
— Tom Fletcher (@tomfletcherbc) February 26, 2018
Parksville-Qualicum MLA Michelle Stilwell said a car dealership in her constituency is looking at a $60,000 bill due to the changes unveiled in James’ inaugural budget last week.
In the legislature, James reminded B.C. Liberals that their government doubled MSP premiums with a series of increases that had it bringing in $2.6 billion by 2017. The NDP government followed through with a commitment to cut the rate by half at the start of this year, and 85 per cent of B.C. businesses won’t pay the new tax, she said.
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Speaking to reporters later, James didn’t have much sympathy for businesses that will pay the tax but aren’t contributing to employee MSP costs.
“Certainly businesses who have not been contributing to medical services premiums will have a little bit more to have to pay for their employees, to contribute to health care in our province,” James said.
She held out hope for non-profits that are looking at extra costs. The new tax begins at a lower rate for organizations with payroll of more than $500,000, with the top rate paid by those at $1.5 million or higher.
“That’s why we give it a year for implementation, so we can have discussions with not-for-profits, with school districts, with municipalities, to determine how those resources are going to be allocated,” James said.