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

Volunteers keep BC Farm Museum running like a well-oiled machine

Collection, started in 1953, continues to expand beyond museum’s capacity to contain it

VIDEO: G-Men seek revenge Saturday night in rematch at Langley Events Centre

Portland’s Winterhawks downed the Vancouver Giants 5-3 during a road trip down south.

UPDATE: Abbotsford murder victim was brother of slain gang leader

Mandeep Grewal gunned down Thursday, brother Gavin killed in North Van in 2017

Children’s author shares her story with West Langley Elementary students

Gabrielle Prendergast toured Fraser Valley schools and libraries from Oct. 15-19.

Nominations wanted for Langley moms in need

The Mama Coach launched the 2nd annual Christmas for Mamas Giveback campaign.

Tommy Chong says cannabis legalization makes him proud to be a Canadian

Legendary marijuana advocate and comedian celebrates cultural milestone at Kelowna event

Pedestrian rushed to Lower Mainland hospital after being hit by car

Friday night crash is latest in rash of collisions involving pedestrians in Surrey

Payette invites critics to ‘come and spend a few days’ with her

Governor General Julie Payette made her first official to B.C. back in March

More pot stores expected in B.C. in coming ‘weeks and months’: attorney general

Attorney General David Eby and Public Safety Minister Mike Farnworth visited the new BC Cannabis Store in the province’s Interior

Telus launches charitable foundation to help vulnerable youth

The Telus Friendly Future Foundation complements other social initiatives by the company, including Mobility for Good

Police say suspicious death of B.C. artist ruled a homicide

Patrick Zube Aylward’s body was found in a residence on a rural road outside of Seton Portage, west of Lillooet, B.C.

Temporary roads being built in areas affected by landslide in northern B.C.

Emergency Management BC news release says Disaster Financial Assistance is available to eligible residents of the Peace River Regional District who may have been affected by the landslides

B.C. tickets win big in Lotto Max draw

Jackpot carried over; B.C. tickets share Max Millions prizes

Most Read