B.C.'s new Employer Health Tax about to launch

Some B.C. employers are sweating over the incomingEmployer Health Tax with registration set to opennext week.

The new levy on businesses with payrolls greater than a half million dollars was introduced in the provincial budget last February.

As of Jan 1,2020, The EHT will replace Medical Services Plan premiums, which are generally paid by individuals.

• Read: Employer Health Tax Overview

"I think like most businesses, you have no choice but to take a look at how you are going to pass that on to the consumeror, in our case, the passenger," said BarryHobbis, the owner of Victoria Harbour Ferry.

The president and CEO of the Business Council of B.C.says the EHTis a double whammy to some businesses that are having to pay both it and MSP premiums in 2019.

"Not only is there a new incremental tax, but we're also paying the old tax previously for a double taxation this year," said Greg D'Avignon.

"In 2019, the employers' health tax comes into effect which collects about a $1.8 billion in additional tax. But, during the same period of time, we're also collecting the medical services premium ...employers have paid about a billion dollars of that."

D'Avignon says the tax has significant implications for the prosperity of the province.

"This is an added cost to business that increasingly and on a cumulative basis makes it very difficult for businesses to start, to employ people, to provide higher wages and create the economic activity to afford government the revenue that they need to pay for their programs."

In contrast, the government has argued that introducing the EHT will make B.C. more prosperous by saving families as much as $1,800 per yearand individuals as much as $900 per yearmoney that willin turnbe spent at B.C. businesses.

The governmentsays B.C.'s EHT rate is tied with Ontario for the lowest payroll tax rate in the country.It also claimsmaking the switch from MSP will reduce administrative costs by $50 million a year.

Non-profits and charities also have to pay the EHTbut only if their payroll tops $1.5 million.

EHT registration opens Jan. 7.

With files from Megan Thomas and Rafferty Baker