The provincial government has turned over an undisclosed number of Medical Service Plan (MSP) premium accounts to the Canadian Revenue Agency (CRA) to help collect money the province is owed.
According to the B.C. government British Columbians owe $422 million in arrears for unpaid MSP bills. The province does not know how many individuals or businesses this includes or how much of the money is from the last fiscal year.
The government scrapped MSP bills on Jan. 1, 2020 for all British Columbians going forward.
“This tax has always been challenging to administer for businesses and individuals, which is another reason we decided to eliminate it,” Finance Minister Carole James said in a statement.
“In recent years the total MSP premiums in arrears has been decreasing and we expect that outstanding accounts will continue to be resolved as MSP premiums are eliminated and the program winds down.”
Even though MSP has been eliminated, retroactive premium assistance continues to be available to provide financial relief for previously billed Medical Services Plan premiums.
British Columbia has consistently used the CRA in the past to help collect unpaid bills. The ministry says it attempts to contact individuals owing and works to secure payments plans. If a payment plan cannot be secured, collections for MSP can eventually go to the CRA.
The elimination of MSP will also lead to savings of over $50 million annually.
But the Canadian Taxpayers’ Federation says there are concerns the Employers Health Tax (EHT), which replaced MSP, will have similar administrative issues.
WATCH (aired December 5, 2019): MSP premiums coming to an end, burden shifts to employers
“It costs people, it costs taxpayers a lot of money to administer this thing,” Canadian Taxpayers’ Federation B.C. Director Kris Sims said.
“We are very concerned going forward with the Employers Health Tax, is this any better to administer.”
The province is not expecting the unpaid MSP bills to have a large impact on the provincial budget. But BC Liberal MLA Mary Polak says the fact the province is forecasting a shrinking surplus means there are less options to deal with the arrears.
“As far as we can see they are struggling to balance that budget and of course that limits their ability of what they can do with arrears,” Polak said.
“For all that we know from the quarterly reports is that budget is balanced on a razor’s edge.”