Oak Bay council wants province to re-think Health Tax double-charge

Implementation of new tax prior to MSP phase out means municipalities pay twice in 2019

Oak Bay council agrees that the new Employer Health Tax set forth by the B.C Government will adversely affect the municipality. They are calling for more consultation and a stop to the double-charge forecasted for 2019.

The “employer health tax” takes effect Jan. 1, 2019 as a means to phase out Medical Services Plan premiums and it applies to businesses with annual payrolls of more than $500,000. With the NDP government promising to eliminate MSP in 2020, some businesses that already pay MSP premiums on behalf of employees face the prospect of paying both MSP premiums and the new tax in 2019. Municipalities fall under this category and have councillors concerned.

“For Oak Bay the double-charge means a $367,000 increase in costs, which have to be passed on to taxpayers,” said Coun. Kevin Murdoch. “The transition to EHT will result in a direct ongoing increase in cost to Oak Bay of over $200,000, or close 1 per cent of municipal budget.”

A motion presented at council Monday by Murdoch calls on the government to reconsider the 2019 double payment. The motion also asks the government to consult with municipalities and that consideration be made in the implementation of the new tax to reduce the impact of healthcare costs on property taxes and the funding of arts and recreation services.

The motion passed 6-1, giving approval for a letter to be written to Premier John Horgan, Minister of Finance Carole James, and MLA Andrew Weaver asking for the changes.

The motion was in line with a resolution passed by the Association of Vancouver Island Coastal Communities at their annual conference in April requesting that the province meet with the UBCM to discuss the tax and the implications of the tax and to request a delay in its implementation until UBCM has had an opportunity to give feedback to the province.

“The motion last night was very much in keeping with that and kind of builds on it,” said Mayor Nils Jensen.

Submitting comment to council ahead of Monday’s motion, resident Esther Paterson, who has announced that she will be running for a council seat in October, writes: “Provincial election promises that result in provincial financial obligations being redistributed to municiplities needs to be clearly articulated to voters prior to election. UBCM is the logical unified voice to address the issue with the province.”

RELATED: Saanich councillor speaks ill of the new health tax

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