The Burnaby Board of Trade says new details released last week about the new employer health tax don’t go far enough to address business owners’ concerns.
The employer health tax was announced in February as part of the 2018 budget. The tax is set to be introduced in 2019 and is part of the provincial government’s plan to do away with Medical Services Plan premiums.
Last week, the province announced new details about the new tax, including information on rates, calculations and scheduling, as well as payroll definitions and thresholds.
But the details weren’t enough to convince the Burnaby Board of Trade to stop opposing the tax, according to the board’s president and CEO Paul Holden.
“There are a couple of encouraging aspects from it. We do remain concerned about it though and do continue to oppose it,” he told the NOW.
Holden said he was happy to see more information about the $500,000 payroll threshold and that the government has confirmed that any payroll amount up to $500,000 would be exempt from the tax. This is one of the things the board of trade had been pushing for, he added.
When the employer health tax was first announced, the board of trade released a report addressing concerns its members had with the new tax and included four recommendations it felt would minimize impact on businesses.
The recommendations include delaying implementation of the new tax; raising the payroll exemption threshold; and linking annual increases to the payroll tax to the consumer price index.
While the payroll exemption threshold has been increased to $1.5 million for non-profits, the government has not made any plans to increase the threshold for businesses beyond $500,000.
This worries Holden, who said most small to medium businesses would likely be paying.
“For most organizations, that’s going to equate to seven, eight, maybe nine people, which is not, by any definition, big business, so it doesn’t take a lot to get to that level,” he said.
The board of trade would like to see the threshold to be raised to the $1 million mark or more to be more in line with provinces like Manitoba and Newfoundland.
The board would also like to see the province implement the new tax in January 2020, when the government plans to cut MSP premiums.
Until these recommendations are adopted, Holden said the board will continue to oppose the new tax on behalf of its members.
“This is challenging for business, with real estate and minimum wage increase and many other things, and so to be putting on another thing on businesses is something we’re not happy with,” he said.
