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

VIDEO: Koch’s OT winner sends Giants to sixth straight victory

Three games, three cities, three victories for the Langley-based hockey G-Men.

VIDEO: New homes for old dogs

Langley event has high number of senior dogs up for adoption

Tardi earns first victory in quest for third national title

A Langley-based junior curling team is in Prince Albert, Sask. for the Canadian championships.

VIDEO: Giants wrap southern swing with 6-4 win in Spokane

The Langley-based hockey team defeated the Chiefs Friday night.

Charges upgraded against mother of murdered Langley girl

Kerryann Lewis now faces first- rather than second-degree murder in the death of Aaliyah Rosa.

VIDEO: Students in MAGA hats mock Native American at Indigenous Peoples March

Diocese in Kentucky says it is investigating the matter, caught on video by onlookers

Want to avoid the speculation tax on your vacant home? Rent it out, Horgan says

Premier John Horgan and Sheila Malcolmson say speculation and vacancy tax addresses homelessness

CONSUMER REPORT: What to buy each month in 2019 to save money

Resolve to buy all of the things you want and need, but pay less money for them

UPDATE: B.C. woman and boy, 6, found safe, RCMP confirm

Roseanne Supernault says both she and her six-year-old nephew are fine and she has contacted police

PHOTOS: Women’s Marches take to the streets across B.C. and beyond

Women and allies marched worldwide protesting violence against women, calling for equality

Anxiety in Alaska as endless aftershocks rattle residents

Seismologists expect the temblors to continue for months, although the frequency has lessened

Women’s March returns across the U.S. amid shutdown and controversy

The original march in 2017, the day after President Donald Trump’s inauguration, drew hundreds of thousands of people

Federal Liberals announce former B.C. MLA as new candidate in byelection

Richard Lee will face off against federal NDP leader Jagmeet Singh

No winning ticket in $10 million Lotto Max jackpot

No win in Friday night’s draw means the next Lotto Max draw will be approximately $17 million

Most Read