The Burnaby Board of Trade does not approve of the province’s Employer Health Tax, according to the board’s budget review.
While the board was pleased to see a balanced budget announced for B.C. on Tuesday, it was not impressed with some elements of the plan, including the health tax.
“The Burnaby Board of Trade maintains that the Employer Health Tax brings in more revenue than is needed to pay for replacing the MSP, and is a net new tax of $1.9 billion on employers,” the review stated. “The Burnaby Board of Trade is disappointed that there was no mention of mitigating the impacts of the Employer Health Tax through an increase in the payroll exemption rates.”
While the Medical Services Plan of B.C. was projected to bring in $1.39 billion in the 2018/2019 budget, the Employer Health Tax is expected to bring in $1.85 billion in 2019/2020 and more than $1.9 billion in 2020/2021, according to the 2020 budget.
The tax was introduced in January 2019 and is an annual tax on remuneration in B.C. for companies that pay out more than $500,000 to employees. Those that pay between $500,000 and $1.5 million get a reduced tax rate.
Those paying out more than $1.5 million pay a tax rate of 1.95% of total B.C. remuneration.
The board was also disappointed that high property values were not addressed in the provincial budget by making changes to the highest and best use method of valuing properties, according to the review. The board would also like to see some items from previous budgets changed, such as the carbon tax, the increase to the general corporate tax rate and the minimum wage increases.
And the board doesn’t think changes to the provincial sales tax go far enough.
“Budget 2020 makes some small changes to the provincial sales tax to increase it in some areas (sugary drinks) while eliminating it in others (pollution control equipment and electric airplanes),” the review stated. “Instead of these type of piecemeal tax changes, the BBOT would rather the provincial government commit to a full review of our tax system to see how we can develop a made-in-B.C. value-added tax that will replace the PST with one that is more fair, easier to understand and more competitive for businesses.”
However, the board was happy to see new funding of $419 million for CleanBC, which promotes energy efficiency with capital funding for schools, universities and hospitals, as well as tax credits for low and middle-income families. The board was also supportive of the initiatives to address childcare costs and create affordable housing.
The B.C. budget forecasts the province will bring in revenues of more than $60.5 billion with a surplus of $227 million in 2020. The budget anticipates surpluses of $179 million in the 2021/2022 fiscal year and $374 million in the 2022/2023 fiscal year.