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Business group calls for BC to 'rethink' proposed health tax

(iStock photo)

VICTORIA (NEWS 1130) – The health tax introduced in last week’s provincial budget to replace MSP premiums isn’t going over well with members of a BC business group.

The Canadian Federation of Independent Business has a new poll highlighting the extent of the opposition to this new levy.

CFIB’s BC and Alberta Vice President Richard Truscott says 93 per cent of business owners who participated in the poll say they strongly or somewhat oppose the new tax, which will apply to companies with payrolls larger than half a million dollars.

“There’s a massive amount of concern in the small business community about this new tax,” he tells NEWS 1130. “It’s going to sweep up a lot more small businesses than the government is letting on, and businesses overwhelmingly oppose this.”

He says the system is “interesting”, but believes there’s a better way to design it. “We really think the government ought to go back to the drawing board and try to get it right, or at least better. There’s a lot of really flawed aspects to the proposal, and this is something they ought to take a realy hard, good look at.”

The CFIB believes more than half of its members will need to pay the new levy, which kicks in January of next year.

The survey polled businesses of all sizes within the CFIB’s membership. “The average business size of our members is only about 10 to 15 employees, and based on these survey results we estimate that half of our members will actually be paying the new payroll tax, at least in some amount, and that’s simply not fair. The government needs to go back to the drawing board, make sure that exemption is a lot bigger, more effective, and designed in a way that’s not going to cause huge tax bills the second a business payroll exceeds a certain, specific amount.”

The BC NDP announced in last week’s budget that it would be phasing out medical services premiums by 2020 and instead will have an employer health tax of 1.95 per cent for companies with a payroll tax over $1.5 million.