The BC NDP government announced this morning that it will be moving forward with plans to eliminate Medical Service Plan premiums and switch to the Employer Health Tax model as announced in the provincial budget for 2018.
“The last government chose to double MSP fees, costing families hundreds of dollars a year. People deserve a break, which is why we’re eliminating regressive MSP premiums,” said Carole James, Minister of Finance.
“The EHT is a fairer approach, similar to other provinces, and that means lower taxes for British Columbians.”
According to the Ministry of Finance, less than 5% of B.C. businesses will pay the full EHT rate of 1.95%, and the majority of small businesses are protected with a $500,000 exemption amount that phases-out gradually.
The legislation also establishes a $1.5-million exemption amount for charities and non-profits, and is similarly phased out.
MSP Premiums will be eliminated by January 1st, 2020 – a transition that the NDP says will save people over $50 million per year.
EHT will take effect on January 1st, 2019.
The move has received mixed reviews from people celebrating the elimination of MSP and those who are concerned about small businesses having to bear the brunt of healthcare costs.
Its about time! It was such an anachronism that BC was the only province in Canada that still made everyone pay a totally regressive flat health care tax (aka MSP) https://t.co/xquXgBcF9P
— Derek Leebosh (@Dleebosh) October 16, 2018
My column on the damage #EHT will cause in BC: "instead of developing a new system that would benefit all British Columbians, the government have simply transferred the burden of paying #MSP premiums from employees to employers."#tax @BCNDP #bcpolihttps://t.co/pIDvWejDXO
— Greg Kyllo Shuswap (@KylloGreg) September 30, 2018
Wouldn’t it be great to see all BC municipalities share the increase they will see from the EHT and how much they will raise taxes to cover the cost. https://t.co/NM5xqKNUba
— Michelle Stilwell (@Stilwell4BC) September 29, 2018