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B.C. school trustees association concerned MSP changes will hurt students

The B.C. School Trustees Association is worried schools will have to cut programs to afford the new MSP payroll tax.
The B.C. School Trustees Association is worried schools will have to cut programs to afford the new MSP payroll tax. File / Getty Images

The B.C. School Trustees Association (BCSTA) says B.C.’s newly announced health tax to replace MSP premiums will affect the bottom line and its students who will feel it the most.

BCSTA President Gordon Swan said even when premiums are eliminated in two years, the cost of the tax will be more than current premiums.

“It was like winning the lottery and then being told six months later you’re told you have to pay it back, plus some more,” he said.

READ MORE: B.C. Government ignores advice from MSP task force, brings in payroll tax

The provincial government says the rate of tax depends on an employer’s bottom line, with reduced rates for businesses making less than $1 million.

When the government announced it was cutting MSP premiums, Swan said school districts were planning to reinvest those dollars in classrooms and programs.

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But with an added tax of nearly 2 per cent on their total payroll starting next year, he said there’s a concern those dollars won’t materialize.

“Right now they’re trying to figure out the actual net cost to them. It’s going to cost every district, and they are going to have to decide what they’re either not going to invest in, and what they are going to cut from their programming.”

READ MORE: B.C. businesses to pay new payroll tax, on top of higher minimum wage and more

Swan said next year employers will be on the hook for double until MSP premiums are phased out in 2020.

“And as we go into collective bargaining and say, wage increases, that amount will increase each year.”

Last year, B.C. school districts paid $68 million in MSP premiums.

Meanwhile in Question Period at the B.C. Legislature on Tuesday, school boards being able to cover the health tax was up for discussion.

“School boards are looking at their budgets, and it’s very clear that they are worse off under this new tax grab from this government,” said Liberal MLA Dan Davies.

Davies said Vancouver alone will need to find more than $7 million – and asked Education Minister Rob Fleming if there’s a plan to help.

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“The member’s actually wrong, entirely wrong. This school year Vancouver is actually achieving a $1.5 million savings, and our government has said keep it and put it in the classrooms.

Fleming listed off new funding for schools and savings under the NDP, not saying if there will be additional funds for the payroll tax.