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.

BC budgetBC Budget 2018BC legislatureMSP

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

UPDATED: Pat Bay Highway blockade ends three hours later

About 80 people from four major Peninsula First Nations blocking major highway

Central Saanich Police prepared for afternoon shut-down of Highway 17

Sgt. Paul Brailey questions efficacy of protest

City of Langford rebrands, announces several projects

‘Langford, where it all happens’ is the City’s new slogan

Fiddler on the Roof brings timely message to Oak Bay stage

Musical starts Friday in Dave Dunnet Theatre

VIDEO: Province promotes ‘lifting each other up’ on 13th annual Pink Shirt Day in Victoria

Students, MLAs, community members gathered at B.C. Parliament Buildings Wednesday

Greater Victoria Crime Stoppers wanted list for the week of Feb. 25

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Prepare for new coronavirus like an emergency, health minister advises

About 81,000 people around the world have now become ill with COVID-19

B.C. residents in Wet’suwet’en territory have right to police presence: Public Safety Minister

Nevertheless, Bill Blair said officials remain ‘very anxious’ for the barricades to come down

Winnipeg police investigating graffiti on RCMP and other buildings

Manitoba Justice Minister Cliff Cullen denounced the vandalism

B.C. seniors’ watchdog calls for better oversight after recent problems at Retirement Concepts care homes

‘There is no financial incentive right now to be a good operator’ - Isobel Mackenzie

Trucking company fined $175K for Kootenay creek fuel spill

Decision handed down last Friday in Nelson court

B.C. Liberals call for ban on foreign funds to pipeline protesters

Sierra Club, Wilderness Committee back Coastal GasLink blockades

Most Read