Premier mulls ma­jor tax changes in 2017

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B.C. gov­ern­ment set to re­vamp MSP and pos­si­bly pro­vin­cial prop­erty trans­fer tax By Richard Zuss­man, CBC News B.C. Premier Christy Clark has promised to change Med­i­cal Ser­vices Plan pre­mi­ums — which she de­scribed as un­fair — be­fore next May’s pro­vin­cial elec­tion. But Clark would not pro­vide any spe­cific de­tails on how she plans to change the health tax, which brings in $2.4 bil­lion to pro­vin­cial cof­fers each year. “One of the pro­pos­als has been, ‘Let’s take MSP and put it in the tax sys­tem,’” Clark said in a year-end in­ter­view with CBC. “Well that just raises every­body’s taxes.” MSP hikes will hit over 500,000 B.C. fam­i­lies in the new year B.C. MSP pre­mium changes: poor fam­i­lies pay less, mid­dle in­come earn­ers pay more “It moves one tax from here over to here. Well, I don’t think that is what peo­ple say when they want to get rid of MSP,” said Clark. “They want us to trust them to be able to spend their money bet­ter than gov­ern­ment can. And I agree with that.“I would say there are a lot of taxes I want to get rid of be­cause I think we should be fig­ur­ing out how to get more money back into peo­ple’s pock­ets.” Changes com­ing in Fe­bru­ary The MSP changes are ex­pected to be an­nounced in the 2017 pro­vin­cial bud­get next Fe­bru­ary so they can be in­tro­duced three months be­fore the elec­tion. Ma­jor changes in the MSP pre­mium plan have been build­ing for nearly a year as the prov­ince tin­kered with changes to monthly pay­ments. The pre­mium has been de­scribed as un­fair be­cause some­one who makes $51,000 a year pays the same amount in pre­mi­ums a year as some­one who makes $510,000 a year. Last Fe­bru­ary the prov­ince re­moved MSP pay­ments for chil­dren and also pro­vided dis­counts for those who make less than $43,000 as well as se­niors who make less than $51,000. The prov­ince also in­creased the rates for more than 500,000 Bri­tish Columbians. A se­nior, or se­nior cou­ple, who earn more than $51,000 com­bined, or an in­di­vid­ual or cou­ple who make more than $43,000 have seen their bills rise by about $14 a month. Those bills have ar­rived in peo­ples’ mail­boxes this month. The B.C. NDP has also vowed to make changes to MSP. Leader John Hor­gan will re­veal his plans for the pre­mi­ums fol­low­ing the pro­vin­cial bud­get in Fe­bru­ary. Hor­gan says it is hard for Bri­tish Columbians to trust the Lib­er­als con­sid­er­ing the gov­ern­ment has in­creased the rates by four per cent a year ev­ery year since 2008. “They are do­ing away with the cou­ple rate and they are im­pos­ing an ad­di­tional cost of cou­ples with­out chil­dren,” said Hor­gan. “When we get in­un­dated with feel good Christy-Clark-is-do­ing-right-by-you ads that you are pay­ing for, re­mem­ber the 500,000 other cou­ples that are pay­ing more as Christy Clark pre­tends oth­ers are pay­ing less.” Prop­erty tax changes pos­si­ble Clark’s gov­ern­ment is also con­sid­er­ing changes to who pays the prov­ince’s prop­erty trans­fer tax. That tax has been de­scribed by some as a cash grab by the gov­ern­ment, which adds ad­di­tional costs to the pur­chase of homes. Asked whether she in­tended to get rid of the un­pop­u­lar tax, she replied, “That’s not part of the agenda at the mo­ment.”But she did open the door for changes down the road. Cur­rently the gov­ern­ment of­fers the First Time Home Buy­ers’ Ex­emp­tion that pro­vides a dis­count to the tax for homes val­ued at less than $500,000. She said the gov­ern­ment would like to re­duce the num­ber of home buy­ers who have to pay the prop­erty trans­fer tax. “If we were go­ing to start think­ing about next steps on that, we would prob­a­bly do more on where we are, which is creep­ing up the num­bers of home buy­ers that don’t have to pay the prop­erty trans­fer tax at all,” said Clark. Clark men­tioned dur­ing a speech to the Sur­rey Board of Trade on Feb. 19, 2015 that the tax could be re­duced or elim­i­nated some time in the next few years — but not be­fore the pro­vin­cial debt is un­der con­trol. In Septem­ber, Fi­nance Min­is­ter Mike de Jong pro­vide fore­casted the prop­erty trans­fer tax will bring $2.2 bil­lion into the trea­sury this year, up from the $1.2 bil­lion pre­dicted in the bud­get in­tro­duced in Fe­bru­ary.

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