Employer Health Tax to affect roughly 60,000 “mostly” small businesses in the province -- “They aren’t going to get any relief”, the response from BC Finance Minister Carole James

This past Tuesday (October 16^th), the BC government stated it was moving forward with its plan to eliminate Medical Service Plan (MSP) premiums and introduce the employer health tax (EHT).  Together, they claimed these two things would reduce taxes on people and businesses by approximately $800 million each year.

Is that true?  

Well all I can say is that does NOT seem to be factual given what many have to say … many who should be in the know.  Here’s just a sampling:

‘BC …less affordable for families and less attractive for business’ is not exactly a slogan for success.  ~~ Fraser Institute

… Select Committee on Finance told the tax would add $700,000 a year in expenses and the City simply cannot "absorb" those costs, as the Finance Minister suggested municipalities could do ~~ City of Prince George

“Ultimately, it’s going to be passed on, I think, to their customers …” ~~ Dent Benefits Consulting

“… this unexpected payroll tax will hit small- and medium-sized businesses hard” ~~ Iain Black (CEO) Greater Vancouver Board of Trade

"The provincial government gets pat on the back for getting rid of everybody's MSP and then we get a kick in the knee for raising their taxes to pay for their MSP" ~~ Kamloops Mayor Ken Christian

Going back to the governments media release, Carole James, Minister of Finance was quoted as saying, “The EHT is a fairer approach, similar to other provinces, and that means lower taxes for British Columbians… less than 5% of B.C. businesses will pay the full EHT rate of 1.95%”

Let's look at this again, and ask the question; "Is it true this plan by our NDP government going to save you and I money at the end of the day?"  Well not according to the Union of BC Municipalities, and the Canadian Federation of Independent Business!

UBCM ~~ researchers found that 29 per cent of local governments that responded expect cost reductions or no change when the tax arrives, but 71 per cent will see an increase. More than a third will pay 25 to 100 per cent more than under MSP, and 15 per cent will see their health payments more than double.

… research conducted in April, the health tax will cost small businesses an average of $15,000 a year and it would affect roughly 60,000, or forty-four percent, of “mostly” small businesses in the province ~~ Canadian Federation of Independent Business (CFIB)

Here’s two more pieces of information to consider … one from the Fraser Institute and one from Benefits Canada, as the government moves forward on this plan.

Given the tremendous tax burden BC families face, it’s no wonder James said her government’s elimination of Medical Services Plan (MSP) premiums will take “some pressure off people’s pocket books” … unfortunately, it’s not the case. ~~ Fraser Institute

Benefits like employer-paid registered retirement savings plan contributions are among payroll components to be subject to British Columbia’s new employer health tax ~~ Benefits Canada

The government states that these measures, the elimination of Medical Services Plan premiums … and the implementation instead of the Employer Health tax … will reduce taxes on people and businesses.

If that’s the case, then why were these words uttered ... 

“They aren’t going to get any relief”

...  by BC Finance Minister Carole James, when confronted with the fact that the Employer Health Tax (EHT) would see businesses paying the employer tax directly, as well as higher property taxes to cover the new municipal costs?

The fact of the matter is, every time government claims to have reduced taxes … they’ll find some other way to ensure that there’s a new tax, or fee, to make up for it.  Which leads, in the end, to more coming out of our pocket.

In Kamloops, I’m Alan Forseth, and I hope you’ll join the discussion on this, or any other topic presented here.  Do you agree … disagree?  Post your thoughts in the Comment Section directly below.