By Chad Klassen

City of Kamloops to pay extra $1.1 million in 2019 with employer health tax

Mar 8, 2018 | 3:55 PM

KAMLOOPS — This year, the City of Kamloops will pay half a million dollars in MSP premiums for its nearly 900 employees and has budgeted an extra $100,000 as a cushion. But in 2019, the city will be shelling out another $1.1 million on top of the $500,000 they already pay. 

“For 2019, as we understand, we’ll still be charged half the MSP rate, which is what we have right now,” said Corporate Services director Kathy Humphrey. “But in addition to that, we’ll have the employer health tax added.”

Humphrey noted the provincial government is double-dipping next year in collecting both the MSP premiums and employer health tax. But she said come 2020, the costs will level out with the premiums completely eliminated. 

“Overall in 2020, the difference is only between $100,000 and $200,000,” she said. “So still little bit of a hit to the city, but not significant.”

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Last year, the city paid $1 million in MSP premiums, but with the province cutting them in half starting in 2018, it’s down to $500,000 for this fiscal year. Humphrey said with the $1.1 million jump next year, it’s only going to cost the taxpayer more in Kamloops. 

“I don’t really have an opinion of whether [cities] should or shouldn’t be exempt, but I think the thing to realize is that while the provincial government is saving money, those people are the same ones that pay municipal taxes,” noted Humphrey. “So if it’s being passed along to the municipality, in the end the taxpayer itself is not necessary saving money.”

Mayor Ken Christian said it’s a classic case of “downloading” by the NDP to pass on provincial expenditures to municipalities.

“The provincial government gets pat on the back for getting rid of everybody’s MSP and then we get a kick in the knee for raising their taxes to pay for their MSP,” said Christian. “It doesn’t make a lot of sense to me and I’m hoping [Finance Minister Carole James] is going to look at the impact of this on public-sector organizations like municipalities.”

Christian feels that municipalities should be exempt from the employer health tax.

“The money has to be paid from somewhere,” he said. “This is clearly a provincial responsibility that’s getting downloaded.”

The city is expected to have a $1.2 million surplus at the end of the year to cover the employer health tax for 2019. The city also said it shouldn’t affect any capital projects that are on the books.