BC Budget Hikes MSP Tax – Again
- BC Government exempts children from MSP, but raises rates 4%
- Prosperity Fund launched modestly
- Negotiations under way to cap film subsidies
VICTORIA, BC: The BC Liberal government is masking yet another Medical Services Premium (MSP) tax increase with its “kids are free” gimmick, drawing the anger of the Canadian Taxpayers Federation (CTF) at the 2016-17 BC Budget announcement.
Couples making more than $51,000 per year will pay another $72 in MSP tax in 2017, as rates jump 4%. Senior couples making more than $51,000 will see a $240 tax hike.
“Forget the nonsense about kids being exempt from MSP – this is a tax hike, plain and simple,” said Jordan Bateman, the B.C. Director of the Canadian Taxpayers Federation. “The BC government had an opportunity to fix the MSP system and help make life more affordable and they blew it.”
MSP taxes are up more than 40 per cent over the past five years. Next year’s hike will bring in another $124 million.
The BC Liberals’ fourth straight balanced budget increases spending by $1.1 billion and projects a $264 million surplus for 2016-17.
The operating debt – money borrowed to cover previous budget deficits – will be paid off within three years. However, BC will still add $2.4 billion to the debt this year, bringing the total to $67.7 billion.
The government has also established a Prosperity Fund, designed to capture potential Liquefied Natural Gas royalties and pay down debt. However, the province’s initial $100 million contribution to the Fund is tiny.
“A $100-million Prosperity Fund is like a family making $90,000 putting away $200,” said Bateman. “It’s a pittance – but it’s a start.”
De Jong also announced that negotiations are under way to “limit” the film tax credit, which is costing taxpayers nearly half a billion dollars per year.
“With the Canadian dollar cratering, the film industry here is booming,” said Bateman. “Unfortunately that means a bigger drain on taxpayers shelling out corporate welfare to American companies. The province needs to move quickly to save this money.”
Among the other measures announced on Budget Day:
- New housing up to $750,000 will be exempt from Property Transfer Tax; homes over $2 million will increase from 2% to 3%
- The $1,200 RESP contribution has been extended to include children born in 2006
- $9 million to improve records management and responses to Freedom of Information requests
- A new tax competitiveness commission to look at fairness and efficiency –and prohibited from discussing a harmonized sales tax
- ICBC is budgeted to lose $125 million this year, raising the possibility of insurance premium hikes