The provincial government is taking around $23 out of the average Delta homeowner’s pocket.
That’s what Delta South Liberal MLA Ian Paton is pointing out about the new employer health tax that B.C. employers, including the City of Delta, had to start paying this year.
The city recently announced a proposed property tax increase of 2.99 per cent for this year, and a full one per cent of that will be used to cover the health tax bill the city will be getting from the province, said Paton.
The 2.99 per cent increase works out a $70 increase for the average home, according to Delta’s finance department, and one per cent identified by the city going toward covering the cost of the new tax works out to just over $23.
“The EHT was created by the government to replace MSP premiums, and not only will numerous local businesses be subject to this payroll tax - municipalities including the City of Delta will be hit as well,” said Paton. “Sadly, the taxpayer will ultimately pay the price through increased property taxes. The NDP may claim to be working to make life more affordable, but here’s clear evidence to the contrary.”
To make matters worse, the government will double-bill in 2019, charging the city for both the EHT and MSP premiums, added Paton.
Meanwhile, it could be a triple-whammy for a number of local businesses in 2019 if they pay for their employees’ MSP premiums, are subject to the EHT and are also now subject to a property tax increase, he said, adding it will impact Delta residents as well because some of companies may have to reduce staff, restrict hiring, or raise prices for their goods and services so they can afford to stay afloat.
The province announced last year the elimination of Medical Services Plan premiums by 2020, to be replaced by a new employer health tax. The change will be phased in this year with employers paying a reduced portion of MSP premiums but also the full employer health tax.
The new tax requires employers with payrolls over $500,000 a year to pay a 0.98 per cent tax annually. The tax goes up in increments with large employers hit the hardest as they will pay a 1.95 per cent tax on payrolls over $1.5 million.
According to the city, the new tax combined with still having to pay half MSP premiums will result in an additional $1.4 million this year. When MSP premiums are gone the following year, it would still work out to an additional annual cost of about $850,000. That equates to an increase of just under one per cent if the city recouped it through property taxes, the finance department explained.
The Delta School District, meanwhile, was given a break and won’t be on the hook for an additional $685,000 this year due to a combination of MSP premiums and the new tax.
