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Employer Health Tax is costing workers

December 11, 2019
Employer Health Tax is costing workers

When it comes to health taxes, Premier John Horgan started with a stumble and then fell over backwards. Now he needs to pick himself up and keep his promise to taxpayers.

Here’s what happened.

During the last provincial election in 2017, Horgan pledged to get rid of the Medical Services Premium, a fee that cost millions of dollars just to administer and cost $1,800 for British Columbian families per year. Axing a tax proved popular with voters.

Unfortunately, Horgan failed to follow through. He cut the MSP in half, but it’s not gone yet. He says it’ll be gone completely on Jan. 1, 2020. But in the meantime, it still cost taxpayers about $1.3 billion this year.

Even worse, that half-kept promise came with an ugly surprise: a whole new health tax.

Now, about 75,000 employers, many of them small businesses, are being gouged by the new Employer Health Tax. Job creators with a payroll of more than $500,000 per year must pay the EHT, including municipalities. That tax will cost taxpayers $1.9 billion this year.

The NDP-Green government hammered job creators by slathering the new EHT on top of the MSP. They hadn’t gotten rid of the old tax before they brought in the new one. Horgan is double dipping.

Because cities and towns are also on the hook for paying the EHT, that has triggered property tax hikes for both the business locations and for the homes of the employers.

Job creators are getting taxed four ways from Sunday because of the Employer Health Tax, and it’s now eating into the raises and opportunities for workers.

“On a company level, it’s costing us about $60,000 each year,” Jayne Kelly, owner of Chieftain Auto Parts in Prince George told the Canadian Taxpayers Federation. “It’s a lot of money, it bites into advancement for wage increases, it holds us back from hiring more skilled staff and it’s made it very difficult.

“The government stole my employees’ raises, and they are the ones that earned it.”

In Kelowna, more than one hundred people are now out of work just before Christmas because the Tolko Mill is shutting down. Business leaders in the region say taxes such as the Employers Health Tax are playing a big role.

“At every turn, it appears taxes and fees are going up and this is having a negative impact on the forest sector and on individuals who are also struggling to make ends meet,” Kelowna Chamber of Commerce President Nikki Csek told the CTF. “We are calling for greater leadership from the province and other levels of government to take action to reduce the costs that are under their control. While there are many factors influencing the situation in the forest sector, it is undeniable that increased taxes and fees are having a negative impact with the Employers Health Tax being a significant contributor.”

The government has raked in $415 million so far in 2019 from B.C. employers via the EHT.

This money should be invested into the businesses being run by job creators and saved by taxpayers who are getting gouged at the municipal level.

Horgan ran on a pledge to make life more affordable for British Columbians and so far, he’s making it tougher for job creators to hire people, give raises and stay afloat. How can life become more affordable if politicians keep sucking more tax dollars out of our homes, jobs, cities, and businesses?

Horgan should make good on his pledge and scrap the EHT when he finally gets rid of the MSP in January. That’s a good New Years Resolution.

Kris Sims is the B.C. Director of the Canadian Taxpayers Federation

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