Employer health tax revision ‘not off table,’ James says

B.C. did not revise its employer health tax this year, but Finance Minister Carole James said Thursday that the possibility “is not off the table.”

James was responding to a question from Victoria businessman Al Hasham, former president of the Greater Victoria Chamber of Commerce, at a meeting attended by about 200 members at the Fairmont Empress Hotel.

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Hasham reminded James that she was asked last year at the B.C. Chamber of Commerce’s annual general meeting if the threshold would be increased from the current $500,000 payroll exemption to $1.5 million. “You stated that you would consider it. We didn’t see anything in the 2020 budget.”

James tabled this year’s provincial budget on Feb. 18. It has been criticized by business organizations for not delivering support to industries and manufacturers trying to compete in global marketplaces.

They complain that measures such as B.C.’s carbon tax were imposed without a way to help offset costs in an already high-cost environment.

James told Hasham that this is a “much more moderate budget year” and that the employer health tax was not looked at this time.

However, she held out some hope for employers, saying the government recognizes there are challenges to expanding business. “So we know it’s a piece that needs to be on our radar for future spending.”

B.C. imposed the employer health tax — applying to public- and private-sector employers — last year as a way to eliminate Medical Services Plan premiums.

Employers with payrolls below $500,000 are exempt from paying it; there is a discounted rate for employers with payrolls up to $1.5 million. The full rate of 1.95% applies on payrolls above that level.

B.C. Chamber of Commerce president Val Litwin criticized the latest budget, saying it did not tackle taxes that are limiting small businesses, pointing out the need to alter the threshold on the employer health tax.

After the province announced in 2018 its intention to bring in the employer health tax, Greater Victoria Chamber of Commerce president Catherine Holt said it would cost most employers far more than medical premiums and noted that it did not consider the health of a particular business or its ability to pay.


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