B.C. budget proposes new payroll tax

Measure would replace MSP premiums
By Sheila Brawn
|Canadian Payroll Reporter|Last Updated: 03/29/2018

Beginning next year, employers in British Columbia will have to pay a payroll-related health tax to help fund the province’s health-care system.

Finance Minister Carole James announced the new measure when she delivered the province’s 2018 budget on Feb. 20. The employer health tax will help replace some of the revenue that the government will lose when it eliminates premiums for the province’s Medical Services Plan (MSP), which the government said generated about $2.6 billion in revenue in 2016-17. In the budget speech, James said the government would do away with the premiums on Jan. 1, 2020.

“B.C. is an outlier in Canada as the only province that levies unfair, regressive MSP premiums that penalize families and individuals. Whether a person earns $60,000 or $200,000 a year, they pay the same amount. And MSP fees have more than doubled over 16 years,” she said. “MSP premiums also impact businesses. They are complex and expensive to administer.”