Prince George Chamber of Commerce members are feeling the impact of the province’s Employer Health Tax, according to a member survey.
According to the survey, which garnered results from 79 local businesses, 70 per cent said they would be impacted by the tax, which was implemented January 1 as the province moves to eliminate Medical Service Premiums for British Columbians. 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. British Columbia is the only Canadian jurisdiction to still charge a monthly health-care premium.
The three main issues identified in the survey were potentially moving operations/payroll/head office to Alberta; reducing staffing, wages or locations, which results in less money entering the economy and increased unemployment; less funding available for not-for-profits as corporate donors are saddled with new taxes.
“As a chamber, we are challenged to see businesses exploring options to relocate all or a portion of their operations to a neighbouring province,” said Todd Corrigall, CEO, Prince George Chamber of Commerce, in a news release. “With more than 68 per cent of respondents saying they will be impacted by the EHT, we hope that government will take notice, as our neighbours to the east and south continue to look for new ways to lessen the impacts of taxation on job creators.”
Corrigall said the province is “double-dipping” as the premiums are being phased out by 2020, which has resulted in businesses paying the tax this year and still having to contribute to employees’ premiums.
Responses at a glance:
- Is/Will your business be impacted by the EHT – 70% responded Yes
- Will you need to reduce staffing levels to accommodate this fee – 36% responded Yes
- Will your service/product costs increase as a result of this fee – 62% responded Yes
- Are you considering changes to your structure – 23% responded Yes
“One of the more troubling survey responses was from a not-for-profit, who noted that – while they are not directly impacted by the EHT from a payroll perspective – they are seeing corporate donors unable to sustain giving levels as their costs have increased,” said Corrigall. “As not-for-profits support a variety of services and opportunities in our communities, this impact can be incredibly damaging.”
The City of Prince George has estimated the tax will cost city taxpayers roughly $1.0 million.