Finance Minister Carole James says accommodations may yet be made for non-profit organizations caught up in the new employer health tax.
YMCA of Northern B.C., Amanda Alexander, told James Saturday at a provincial budget session in Prince George, that the new tax, designed to replace Medical Service Premiums, could cost the organization $100,000 in the first year and $50,000 in the second year, as Medical Services Premiums are gradually eliminated.
“We want to make sure there is a level playing field for private and public sector,” James said, adding that the provincial and other levels of government, such as school districts, will be paying the new tax as well.
“Government will pay it,” she said. “But that’s why we’ve said we want to give a year before we implement change because we have to have a conversation with the not-for-profit sector, other community groups and organizations … There are a range of groups of organizations that receive government funds that will be impacted.”
The new payroll tax will come into effect January 1, 2019. Businesses with a payroll of more than $1.5 million will pay a rate of 1.95 per cent on their total payroll. Businesses with a payroll between $500,000 and $1.5 million will pay a reduced rate and businesses with a payroll less than $500,000 will pay nothing. The province estimates this tax will bring in $463 million.
“It’s important to note that the employer’s health tax is not new money coming in,” James said. “These are existing dollars that are already in the system that we are going to transfer over to the employer’s health tax,” said James.
She said there will be consultation with non-profit groups prior to the tax actually being implemented.
She said British Columbia is the only province in B.C. that still charges Medical Service Premiums which, she said, is a regressive tax.
“If you made $60,000 a year or you make $1 million a year, you pay the same MSP premium,” she said. “That’s how it works and that’s unfair.”