B.C. Finance Minister Carole James delivers her first full budget, Feb. 20, 2018. (Tom Fletcher/Black Press)

BC BUDGET: Payroll tax replaces medical premiums

Health spending to increase $1.5 billion for drugs, primary care teams

The B.C. government will phase out Medical Services Plan premiums a year earlier than promised in the last election, and impose a payroll tax on larger businesses to recover some of the revenue collected by Canada’s last remaining health care charge.

The “employer health tax” takes effect Jan. 1, 2019 and applies to businesses with annual payrolls of more than $500,000, some of which now pay MSP premiums on behalf of their employees. The tax rate is 1.95 per cent for businesses with payroll above $1.5 million, with reduced rates for payrolls between $500,000 and $1.5 million.

Businesses that pay employees’ MSP, at a rate that was cut by half at the start of 2018, will also pay the payroll tax for a year, before MSP is ended on Jan. 1, 2020. People who pay their own MSP will save an average $900 per year for individuals and $1,800 for families when MSP is eliminated.

Finance Minister Carole James said the decision to stop MSP and recoup some of the revenues via tax is similar to what other provinces have done, and B.C.’s payroll tax has a lower rate than Ontario, Quebec and Manitoba. The tax is expected to raise $1.9 billion per year, compared to $2.6 billion collected when MSP was at its highest rate in 2016-17.

Consultation showed that getting rid of MSP premiums early was preferred for individuals as well as businesses, James said.

“They’re complex, they’re tough to administer, and we’ve heard that over and over,” she said.

Revenue from the new tax will help pay the $1.5 billion increase in health care spending over the next three years. That includes $548 million over three years to improve care for seniors and $150 million to provide primary care teams for people who don’t have a family doctor.

Just Posted

Funicular or affordable housing? City of White Rock to ask input from residents

The city has between $7.78 and $14 million to spend on capital projects

SURREY EVENTS: Rick Mercer here for ‘Comedy Night in Canada,’ and more

Concerts, festivals, plays and more in our weekly events guide for Surrey

Five accused in South Surrey torched-SUV killing ordered back to court in January

Bhavkiran Dhesi died in August 2017; five members of the same family are charged in connection with her death

Elgin Park grad steers UBC to women’s soccer title

Danielle Steer scores winning goal in championship game and semifinal

‘Illegal hotels’ operating in City of White Rock: councillor

Anthony Manning concerned some homeowners are operating unlicensed B&B-style rentals

B.C. to restrict nicotine content, bring in 20% tax on vaping products

Province will also restrict candy and fruit flavoured vaping products to adult-only stores

B.C. woman sends fight to reduce preventable medical errors to Victoria

Teri McGrath and South Okanagan senior’s centre members presented 150 signature petition to local MLA

B.C. First Nation Chief Ed John faces historic sex charges

John served as minister for children and families under then-premier Ujjah Dosanjh

Nearly half of B.C. drivers nervous in winter conditions: BCAA

‘Wait and see’ approach common practice for 32% of B.C. motorists

Yelling at your dog might hurt its long-term mental health: study

Researchers find dogs trained using negative reinforcement are more ‘pessimistic’

At least 3 hurt in California school shooting, gunman sought

Los Angeles County Sheriff’s Department looking for a male suspect in black clothing was seen at the location

Community uses loophole to paint 16 rainbow crosswalks after B.C. council says no

So far 11 rainbows are painted and five planned, all since council denied the first proposal in September

Most Read

l -->