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

Sources Langley Food Bank can’t find a home

Landlords don’t want to rent to the food bank and time is running out

Vancouver Giant named to Western Conference first-tier all-star team

Young hockey defenceman Bowen Byram is once again lauded for his outstanding efforts on the ice

Giants begin playoff run in Langley tonight

With one win and a loss last weekend, the G-Men now top the Western Conference

WATCH: Langley Glow events denied permission to run

Darvonda Nurseries received a compliance assessment notice from the ALC on March 5.

Arrest and prohibition part of RCMP-CN police education exercise.

Tickets were issued and violations observed, although the focus was to educate drivers.

Fierce feline spotted as ‘aggressor’ in face off with coyote in B.C. backyard

North Vancouver resident Norm Lee captures orange cat versus coyote in backyard showdown

Surrey RCMP investigate alleged assault that may have been a ‘driver dispute’

Police say a vehicle fled the scene after an alleged assault this morning at 96th Avenue and 152nd Street

Second case of measles reported in the B.C. Interior

Case is connected to an earlier measles case in 100 Mile House

Police watchdog investigating after man falls out third-storey window in Vancouver

The man fell to the ground and was taken to hospital with serious injuries

Cheetahs will not prosper in Creston: Permit rejected for two big cats

Earl Pfeifer owns two cheetahs, one of which escaped in December 2015

GM announces jobs, electric vehicle after Trump criticism

The company says it will spend $300 million at its plant in Orion Township

Trucker who caused Broncos crash likely to be deported: lawyer

The Crown has asked that Sidhu serve 10 years in prison

China chemical plant blast kills 47, injures hundreds more

This is one of China’s worst industrial accidents in recent years

Montreal priest stabbed while celebrating morning mass

The incident happened Friday morning at Montreal’s St. Joseph’s Oratory

Most Read