Prepare to pay to replace MSP premiums

The John Horgan government billed it as a way to make life more affordable, but watch out : It could jack up the price of your burger and fries.

I’m talking about the government’s decision to phase out much-hated Medical Services Plan premiums and replace them with a new payroll tax on business.

Just one problem: A lot of employers never paid their employees’ MSP premiums to start with, so they’re getting whacked with a brand-new hit to their bottom lines.

And that includes restaurants. The tax will impact businesses with an annual payroll of $500,000 and higher. It means smaller restaurants will escape, but larger ones will get hit.

That includes some fast-food joints, especially if a single franchisee owns a string of restaurants.

Consider the case of one burger businessman, who owns a chain of fast-food franchises across northern British Columbia.

“He’s going to have to put up his prices — he doesn’t have any choice,” said Liberal Mike Bernier, the MLA for Peace River South.

“We aren’t talking fancy, highend restaurants here. We’re talking about fast-food places where a busy mom might take her kids after hockey practice.

“This is going to hit middle-class families.”

Ian Tostenson, president of the B.C. Restaurant and Food Services Association, said he’s heard from several businesses preparing to raise prices.

“I talked to one owner who’s getting hit with $30,000 in additional labour costs because of the minimum-wage hikes and another $6,000 from the payroll tax.

“It’s death by a thousand cuts. Increases here, increases there. You could be looking at menu price inflation between four and five per cent.”

The payroll tax is scheduled to start next year and the government is under growing pressure to reduce the tax or at least phase it in more slowly.

The payroll tax could hit people in other ways, too.

“We will have to raise property taxes by two per cent just to cover the impact,” said Victoria Mayor Lisa Helps.

“It could push the total property tax increase to between 4.5 and five per cent, meaning some business owners will end up paying twice.”

Talk about a taxation double-whammy! Business owners could get walloped by the payroll tax, and then pay an inflated property tax as the city passes on the pain.

Despite growing complaints, Finance Minister Carole James said she won’t back down.

“They aren’t going to get any relief,” James said bluntly when asked about municipal complaints.

But since the tax also hits school districts, health authorities and non-profit agencies, the backlash will only grow.