Kelowna Chamber of Commerce president Tom Dyas. —Image: Facebook

Kelowna chamber doesn’t like new payroll health tax

New tax will help government make up loss of revenue from elimination of MSP premiums

The Kelowna Chamber of Commerce doesn’t like the province’s plan to make up lost revenue from the elimination of Medical Service Plan premiums by imposing a new payroll tax on businesses.

In Tuesday’s budget, Finance Minister Carole James announced MSP premiums will be abolished as of Jan. 1, 2020, one year ahead of the previously announced schedule and a new payroll tax on businesses with payrolls over $500,000 will be introduced.

The NDP government has already cut premiums by 50 per cent and had vowed to get rid of them altogether.

But the Kelowna chamber, in a response to the budget, said it appears businesses will be footing the bill to the tune of almost $2 billion by 2020-21 to cover the full phase-out cost of the MSP premiums British Columbians now must pay.

“This new tax will have a negative effect on growth and investment,” said chamber president Tom Dyas.

The new tax, to be introduced Jan. 1, 2019, will amount to 1.95 per cent of a companies total payroll if the payroll exceeds $1.5 million. Companies with payrolls below $500,000 will be exempt and those in between will face a sliding tax rate scale.

The province estimates by eliminating MSP premiums, an individual in B.C. will save up to $900 per year. Many companies already pay a portion of the monthly MSP premium for their employees.

The chamber estimates the new Employer Health Tax will cost companies with payrolls of $2.5 million $29,250 (at 1.95 per cent), companies with payrolls of $1 million $14,625 (at 1.46 per cent) and companies with payrolls of $750,000 $7,313 (at 0.98 per cent).

“When taken in conjunction with the loss of revenue neutrality (and increase) of the Carbon Tax, and increases to minimum wage and the corporate tax rate, businesses of all sizes are facing the cumulative effect of crippling tax increases that will challenge their ability to invest and grow,” said Dyas.

“Our members like to see balanced budgets, especially with capital investments in infrastructure, education, trade, and housing that support many businesses in the province through direct and indirect job creation. But this budget looks like it’s being balanced on the back of a strong economy and through accumulating tax increases on business.”

To report a typo, email: edit@kelownacapnews.com.



awaters@kelownacapnews.com

Like us on Facebook and follow us on Twitter.

Just Posted

UBC Okanagan nursing students host gala fundraising event

Medical clinics in Ghana and Zambia will benefit from the gala

UBC Okanagan welcomes alumni and the community to campus event

Homecoming is a chance to rediscover and reconnect with the campus

Kelowna still waiting for first legal pot shop application

Despite anticipating ‘hundreds’ of applications, the city has yet to receive one

Kelowna RCMP look for alleged theft suspect

The alleged theft of a wallet was committed inside a Kelowna business

RCMP look to reunite cash with owner

The owner accidentally donated the money to the Salvation Army in a piece of clothing

Sunny skies for the week ahead

Environment Canada is forecasting clear skies for the Okanagan and Shuswap

Trump: Saudi king ‘firmly denies’ any role in Khashoggi mystery

Secretary of State Mike Pompeo is travelling to the Middle East to learn more about the fate of the Saudi national

Microsoft co-founder Paul Allen dies at 65

Allen died in Seattle from complications of non-Hodgkin’s lymphoma

South Okanagan man alleged to have exposed genitals to children

Penticton RCMP said incident occurred at the Kiwanis Park

Transport Canada to take new look at rules, research on school bus seatbelts

Canada doesn’t currently require seatbelts on school buses

Sockeye run in Shuswap expected to be close to 2014 numbers

Salute to the Sockeye on Adams River continues until Sunday, Oct. 21 at 4 p.m.

Michelle Mungall’s baby first in B.C. legislature chamber

B.C. energy minister praises support of staff, fellow MLAs

Canucks: Pettersson in concussion protocol, Beagle out with broken forearm

Head coach Travis Green called the hit ‘a dirty play’

Most Read