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

Rental housing proposed for Kelowna’s BC Tree Fruit site

Proposal will add 148 new rental units on old packinghouse site

Kelowna-based pot chain acquired by international cannabis company

Compass Cannabis Clinic acquired in multi-million dollar deal by Isodiol International Inc.

Life on Munson Pond looking pretty bright

Earth Day event in Kelowna showcases work that’s four years in the making

Reel Reviews: Parlour games or video games

We say, “Rampage is silly fun and Truth or Dare is just silly”

Rain barrels, compost bins popular on Earth Day in Kelowna

Regional District’s annual sale sees all rain barrels sell in 90 minutes

REPLAY: B.C. this week in video

In case you missed it, here’s a look at replay-worthy highlights from across the province this week

NHL playoffs weekly roundup

Maple Leafs look to stay alive tonight as they face elimination against Boston on home ice

Update: Penticton sign gets upgrade

$10-million competition for Pentic-ten

Woman found dead in car in Kamloops

A woman was found dead in a car in Kamloops, while two men also found unconscious

Electric vehicles more affordable than you think: BC Hydro

Myths blocking road to electric vehicle adoption

Kinder Morgan bungled pipeline public relations: poll

The survey suggests 58 per cent of Canadians believe the company is to blame for poor perceptions

Plane makes a surprise landing on the Coquihalla

Social media was alive Sunday night with pictures from Coquihalla commuters.

Royal baby: It’s a boy for Kate and William

The Duchess of Cambridge has given birth to her third child, a boy weighing 8 pounds, 7 ounces.

Vancouver’s Chinese community receives apology for historical discrimination

More than 500 people gathered at the Chinese Cultural Centre for the event

Most Read