Kamloops MLA accuses province of 'double dipping' with new employer payroll tax

By Greg Fry
February 28, 2018 - 11:40am

KAMLOOPS — Kamloops-South Thompson Liberal MLA Todd Stone is worried Victoria's new employer health payroll tax will have serious consequences for local businesses.

The new tax will replace MSP premiums and take effect in 2019. Businesses with payrolls less than $500,000 will be exempt from the new tax but businesses with payrolls over $1.5 million will be slapped with a 1.95 per cent tax increase.

Therefore businesses that already pay MSP premiums for their employees face the prospect of paying MSP and the new tax next year before MSP is eliminated on Jan. 1, 2020.

While Stone says he's pleased the premiums will be phased out — his Liberal government first made that promise in last year's budget — he says the NDP is going about it the wrong way.

"What is very distressing is the second half of MSP will still be in place this year and next year. And then next year this new employer health payroll tax will be implemented," he says. "Essentially for 2019 the government will be double dipping. It will be continuing to collect half of MSP and it will be collecting this new employer health tax."

Stone says the burden will place an "enormous" burden on small businesses across the province, including in Kamloops.

"Interior Plumbing and Heating here in Kamloops employs about 100 people. They cover the MSP premiums for their employees, which is a good corporate citizen thing to do. This added tax is going to take $185,000 from their bottom line and they're not sure where they're going to make that up."

Ultimately, Stone says it will have to be made up by raising taxes, hiring fewer employees, or in the worst case scenario laying people off.

"So, as someone who has started and run a small business myself, a tech company, these are the kinds of tough choices small business owners have to make. So, we have pressed the NDP government, and will continue to do so, to rethink this plan."

Considering eliminating the MSP was a plan first hatched by the BC Liberals while in government, how would Stone have liked to have seen the NDP approach the issue?

"Well our plan was to eliminate half of MSP on Jan. 1 this year, the NDP copied our plan, and then to remove the second half of MSP premiums and not replace it with another tax."

Stone says he would have liked to have seen that happen "sooner rather than later," but says implementing it over a three year period would have been preferable.

"You do that within the context of continuing to grow the economy and growing revenues."

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