Viking Air manufactures aircraft on Vancouver Island and in Alberta. (Viking Air photo)

Carole James avoids questions on B.C.’s payroll tax (with video)

Green MLA Adam Olsen cites huge tax increase for local business

B.C.’s new employer health tax to replace Medical Services Plan premiums was quietly made official Tuesday, with legislation presented to impose it on payrolls of $500,000 or more as of Jan. 1, 2019.

Finance Minister Carole James presented two controversial tax bills at the same time, with most of the attention going to the government’s “speculation and empty home tax” on urban areas getting most of the attention.

The employer health tax has much wider effect, triggering property tax increases across the province as municipalities have to pay the payroll tax and the half-portion of their employees’ MSP fees on top of each other for 2019. MSP is due to be phased out entirely in 2020.

RELATED: Fraser Valley greenhouse growers hit hard by tax

RELATED: Survey finds 30% of businesses expect to cut staff

James emphasized the positive results, effectively a personal income tax cut for individuals who pay their own MSP premiums. Non-profits are essentially exempted, health authorities, school districts and post-secondary institutions have been promised budget increases to cover the tax. But larger businesses are in the same boat as municipalities, paying MSP and then shouldering a tax burden larger than the total.

“Employers with B.C. payrolls between $500,000 and $1.5 million will have their rate phased in,” James told the legislature. “Employers with B.C. payrolls greater than $1.5 million will pay 1.95 per cent of their total B.C. remuneration.”

B.C. Green Party MLA Adam Olsen raised the issue Monday, describing how that lands on big employers in his constituency and citing the risk of chasing away major private sector manufacturers. He noted that Viking Air manufactures its famous Twin Otter and other aircraft in Alberta as well as the Saanich Peninsula where it is headquartered.

“If they left for Calgary it would be devastating,” Olsen said.

Another employer that has shared its concerns with Olsen is Schneider Electric, which employs 280 people in Central Saanich.

“They have a payroll of $20 million,” Olsen told the legislature. “In 2017 they paid $42,000 for their employees’ Medical Services Plan premiums, and in 2020 they will pay $390,000 through the employers’ health tax. Schneider’s local management will have to defend to head office why they should stay in the Saanich Peninsula or even in British Columbia.”

Olsen, whose party is keeping the NDP minority government in power, asked James what steps she was taking to make sure the payroll tax isn’t “the final straw” for B.C. employers.

James avoided the question with often-used talking points about B.C. having the lowest unemployment rate in the country and using the payroll tax revenue to invest in health care.

The exchange between Olsen and James can be viewed here.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislature

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

Just Posted

Perry and Stanley awarded top UBC Okanagan rookies

The volleyball star and soccer star won the prize over Heat’s virtual awards banquet

Interior Health officials outline pandemic response in virtual town hall

Kelowna-Lake County MLA Norm Letnick moderates digital discussion, Q&A with Interior Health leadership

Second Vernon-area high school exposed to COVID-19

Kalamalka Secondary School staff, students urged to self-isolate if showing symptoms

Significant snowfall forecast for Interior mountain passes

Allison Pass, the Okanagan Connector, Rogers Pass and Kootenay Pass could see 15 to 25 cm of snow

COVID-19: Changes at Knox Mountain, Canyon Falls, park washrooms in Kelowna

Park washrooms open with extra cleaning on April 1; Knox Mountain Drive, Canyon Falls remain closed

UPDATE: Coronavirus concerns prompt event cancellations across the Okanagan

This is a running list of events cancelled across the Okanagan

B.C. VIEWS: Small businesses need our help

Just as integral in neighbourhoods in Vancouver and Surrey as they are in Prince George or Kelowna

‘Tremendous’ response from blood donors has supply keeping pace with demand

About 400,000 of Canada’s 37 million residents give blood on a regular basis

Morning world update: Cases surge past 600,000; positive news in Germany

Spain suffers its deadliest day as Germany considers April 20 to possibly loosen restrictions

VIDEO: Penguins roam empty halls of Vancouver Aquarium

COVID-19 has forced the Vancouver Aquarium to close access to guests – leaving room for its residents

Kids get back to learning in B.C., online

Ministry of Education rolls out new tool for school

67 more B.C. COVID-19 cases, two more deaths in Vancouver region

Positive tests found in Surrey, Langley long-term care facilities

Most Read