THE Ministry of Finance has released an Employer Health Tax (EHT) tax notice, as part of the next steps toward the elimination of Medical Services Plan (MSP) premiums and transition to the EHT.
“Our government is working hard to make life more affordable for people in our province. We are proud to be eliminating regressive MSP premiums, and returning up to $1,800 each year to families across our province,” said Carole James, Minister of Finance. “While other provinces scrapped MSP premiums, the former government doubled and downloaded these unfair fees onto middle-class individuals, families, and seniors. Replacing MSP premiums with the EHT follows the lead of other provinces, and is a much fairer and progressive approach.”
The tax notice includes implementation information on effective rates, calculation and scheduling, remuneration, payroll definition, rules regarding instalment payments, locational and threshold rules for non-profits, and other technical implementation details.
A full list of the implementation details can be found at the Ministry of Finance’s EHT tax notice at www.gov.bc.ca/
For over a decade, British Columbia has been the only province to maintain MSP fees. MSP premiums were increased and downloaded onto people and the services they relied on, including schools, colleges, universities and hospitals, the NDP noted.
The transition to the EHT includes funding that ensures public services will not be impacted. This includes funding for colleges and teaching universities, research universities, community-health and social-service providers, school districts and health authorities. After full implementation, the net funding required for the public sector is estimated to be no more than $90 million annually.
Administration of MSP premiums is costly and inefficient. The transition to the EHT will result in savings of over $50 million annually on an ongoing basis, according to the NDP.
The elimination of MSP premiums and introduction of the EHT will result in a net tax decrease of approximately $800 million per year for British Columbians. Families will save as much as $1,800, and individuals will save up to $900 each year.
The government will introduce legislation in fall 2018 to implement the EHT.