BRIEF
The BC Libertarian Party will eliminate the Employer Health Tax (EHT), which coincided with, then replaced the old BC Medical Services Plan (MSP).
SUMMARY
On January 1, 2020, the NDP put a halt to individuals’ Medical Services Plan fees, and put the burden on businesses instead, calling it the Employer Health Tax. British Columbia is the only province that has an extra levy for medical services. To add insult to injury, the revenues collected go to General Revenue and do not necessarily buy BC citizens a higher-level of health care. In one budget speech in the legislature, Finance Minister Carole James said, “B.C. is an outlier in Canada as the only province that levies unfair, regressive MSP premiums that penalize families and individuals.”
The BC NDP fails to take into consideration that all Canadian businesses already match employee Canada Pension Plan contributions as well as 140 percent of Employment Insurance premiums. Additional payroll taxes in BC will make our businesses less profitable, less competitive, and less likely to hire.
As it stands, low-income households are eligible for Regular Premium Assistance. This is financial help for families who have filed their taxes and have an adjusted net income of $42,000 or less.
Further, employers are currently responsible for paying for everyone’s extra health tax, including the wealthiest taxpayers, and not just EHT for their employees. This places an unfair burden on businesses, hindering their ability to grow and provide more jobs. This tax also disincentivizes new start-ups from forming. For a business with say, 40 employees, the additional expense can cost up to $72,000 annually ($1800 premium for a family). If a company’s gross margins are in the neighbourhood of 30% (before overhead expenses such as payroll), it means it will have to somehow increase sales by an extra $240,000, with diminished resources, in order to pay the EHT premiums. Some employers will not survive the extra expense in a downward-trending economy.
The BC Libertarian Party will repeal the EHT and not revert to the MSP.
SOURCES
https://www2.gov.bc.ca/gov/content/health/health-drug-coverage/msp/bc-residents/premiums