Watchdog group accuses Saanich of exaggerating effects of new health tax

Watchdog group accuses Saanich of exaggerating effects of new health tax

A local watchdog group questions Saanich’s messaging around the effects of the employer health tax.

Grumpy Taxpayer$ said in a release that the group “agrees and sympathizes” with findings from the Union of British Columbia Municipalities (UBCM). They show local governments including Saanich will feel a “significant” impact on their municipal finances as the new tax leaves Saanich with a menu of politically unappetizing choices.

“We question a tax policy that results in the funding of a provincial service (healthcare) through property taxation,” said board member Bruce Kennedy.“That said, we strongly disagree with the CAO and his alarmist message. There’s no need to cut off a limb, but simply a willingness to go on a diet.”

The provincial government plans to eliminate Medical Services Plan (MSP) premiums paid by each British Columbian (unless exempt) and replace them with the EHT paid by employers with 2019 as a transition year during which the provincial government will collect both MSPs and the EHT.

Saanich, according to the report, will pay $1.78 million to cover the new EHT plus $209,000 for employee MSP premiums with Saanich planning to split the additional cost between property taxes and user fees.

Comments from chief administrative officer Paul Thorkelsson suggests Saanich would find it difficult to absorb the increase without raising taxes.

“Saanich cannot manage a property tax increase [of 1.3 per cent] from this additional expense through simple ‘belt tightening,’” he said. “We would have to amputate a limb.”

Grumpy Taxpayer$, however, questions this language.

Kennedy said Saanich could be more selective in funding capital projects. “Saanich fails to consider slowing the pace of the new ‘nice to do’ capital projects, such as the $5 million next year and $8 million the following year budgeted for the Complete Streets initiative,” he said. “Just pushing that to three years could cover this issue with room to spare.”

Capital projects need a proper business plan and need to be prioritized, so we do what we can afford, he said.

“There’s also a million dollar strategic initiative fund — which even some councilors have termed a slush fund — with money outside the normal budgetary process that escapes scrutiny,” he said.