Whereas the proposed new Employer Health Tax to fund medical services for British Columbians will require organizations with a payroll greater than 1.5 millionincluding many local governmentsto pay the highest tax rate at 1.95 per cent of their total payroll; And whereas for many local governments, the amount of remittance required under an Employer Health Tax rate of 1.95 per cent of total payroll will be double the amount of the premiums that the local government as an employer paid previously for MSP; And whereas the provincial government has provided selected tax breaks to the private sector, effectively offsetting the additional costs of the new Employer Health Tax: Therefore be it resolved that, in the absence of tax breaks that have been provided to the private sector, the provincial government design the transition to the Employer Health Tax to be cost-neutral for local governments.
Ministry of Finance At 1.95, B.C.s Employer Health Tax EHT rate is tied with Ontario as the lowest payroll tax rate in the country. The tax will bring B.C. in line with the rest of Canada, as British Columbia was the only province that charged regressive medical services fees to individuals. The EHT will apply uniformly to public and private sector employers, and the transition from MSP fees to the EHT will result in a net tax savings of 800 million for British Columbians, making it one of the largest middle class tax reductions in B.C. history.