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It’s time to axe Ontario’s health tax

Author: Jay Goldberg 2024/01/23

There’s one tax in particular Ontario taxpayers want to see on the chopping block this budget season: the government’s sneaky health tax.

Ontario taxpayers have been hammered with a health tax for 20 years. Former premier Dalton McGuinty introduced the tax in 2004.

His government designed it to hit virtually every taxpayer.

Anyone who lives in Ontario and earns more than $20,000 is on the hook for the Ontario health tax. The tax is phased in at $20,000 of income and rises as high as $900 for the province’s top earners.

The median income in Ontario is roughly $54,000. Taxpayers making $54,000 are on the hook for $600 a year in health taxes.

Many Ontario taxpayers don’t know about the health tax because it’s charged as a surtax on top of taxpayers’ income tax bill. The tax is referred to as the “Ontario Health Premium” by bureaucrats at Queen’s Park.

But Ontario taxpayers shouldn’t be fooled by the tax’s fancy name: the government takes the money off your paycheque and uses it as revenue to spend on whatever it wants.

If it walks like and tax and talks like a tax, it’s a tax.

And this isn’t a small tax.

The average Ontarian is on the hook for a $600 health tax this year. That could pay for three weeks’ worth of groceries for a family of four.

At a time when more than 50 per cent of Canadians say they’re $200 away from not being able to pay their bills, eliminating the health tax could make a meaningful difference in the lives of struggling Ontario taxpayers.

The government plans to rake in $4.8 billion through the health tax in 2024. That money belongs in the pockets of taxpayers, not in the hands of bureaucrats.

Ontario is also the only province in Canada charging taxpayers a health surtax on top of their income tax bills. If other provinces deliver similar health-care results for their residents without hitting taxpayers with a punitive health tax, why can’t Ontario?

Some might argue that Queen’s Park should have a health tax if it means improving health-care outcomes for patients. But health outcomes in Ontario were better before McGuinty’s health tax became the law of the land.

Thirty years ago, the typical Ontarian waited 9.2 weeks to see their family doctor and then get treated by a specialist. Thirty years later, Ontarians are waiting an average of 20.3 weeks.

And even though outcomes are worse, taxpayers are paying more.

The province of Ontario now spends $2,500 more per person on health care than it did back in 1993, after adjusting for inflation.

There’s no justifying Ontario’s health tax. Outcomes have only gotten worse and family budgets have only gotten tighter.

How could Ontario keep the deficit in check while also axing the health tax?

Consider two facts.

First, Canada has 10 times as many health-care bureaucrats as Germany, even though Germany has twice Canada’s population.

Second, Ontario will spend more than $8 billion on health costs not related to front-line services this year.

If Ford takes a page from Germany’s playbook and prioritizes spending on front-line services rather than the health bureaucracy, Ontario could save billions and easily afford to phase out the health tax in a year or two.

With budget season right around the corner, it’s time for Ford to get cracking. Since coming to office, Ford has only delivered small potatoes when it comes to tax relief.

Putting the health tax on the chopping block would be a boon for taxpayers and show Ontarians that Ford is serious about helping families make ends meet.

Jay Goldberg is the Ontario Director of the Canadian Taxpayers Federation

 

 


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