Business group says NDP health tax numbers a ‘myth’

The Employer Health Tax is meant to fund the elimination of MSP premiums in B.C.
The Employer Health Tax is meant to fund the elimination of MSP premiums in B.C. File Image

The Canadian Federation of Independent Business (CFIB) has released a report refuting what it calls “myths and misrepresentations” from the NDP government about its controversial Employer Health Tax.

The new tax, unveiled in the February budget, is designed to fund the elimination of MSP premiums. It applies to businesses with a payroll of more than $500,000, and is capped at a maximum of 1.95 per cent on their total payroll.

READ MORE: Majority of B.C. business owners oppose new employer health tax: survey

But the CFIB says while the government claims only five per cent of all businesses will pay the full tax, in actual fact, 44 per cent, or 60,000 businesses, will be on the hook.

“[It] clearly reveals that the government’s tax proposal to implement this new employer health tax is very flawed and it’s going to be punitive for a lot of small businesses and it’s going to impact a much longer list of businesses than the government lets on,” said CFIB vice-president for B.C. and Alberta Richard Truscott.
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The report also states that while the government claims the tax will mainly be a cost on big business, the average small business owner subject to the tax will pay more than $15,000.

READ MORE: BC NDP’s payroll tax could force one business to raise prices by 10 per cent

Truscott argues it is workers who will lose out in the equation.

“Those are the people that will bear the brunt of the new tax is the people that work inside the business and they will do that through lower wages, through fewer bonuses,” he said.

The CFIB says its report draws on government data and a survey of 768 business owners across the province.

Global News has requested comment from the Ministry of Finance on the report.