MSP cuts are coming, but will tax hikes follow?
British Columbians will see a 50 per cent cut in their Medical Services Plan premiums effective Jan. 1, Finance Minister Carole James confirmed Wednesday.
It means MSP will be chopped in half starting Monday — something the governing NDP promised during the spring election. The government will also raise the income threshold at which no MSP is payable, meaning an individual earning up to $26,000 will pay no premiums. Couples earning up to $29,000 and senior couples earning up to $35,000 also won’t pay any MSP.
“I’m proud that we are moving away from these regressive fees,” James said, while repeating a pledge to eliminate MSP premiums entirely within four years.
“MSP premiums are unfair and place a significant burden on British Columbians.”
The initial 50 per cent rate cut will cost the government about $1.25 billion a year in foregone revenue, and the opposition Liberals immediately raised the spectre of tax hikes to replace the lost money.
“The B.C. NDP are not abandoning the revenue,” Liberal health critic Mike Bernier said. “They are actively looking to find the money and most likely will raise income tax to pay for it.”
James said the government will establish a task force “to examine the best approach to replacing the revenue from eliminating MSP premiums.”
The task force will be made up of “respected experts in economics, law and public policy” and will report back by March 31, she said.
The NDP had earlier committed not to increase the provincial sales tax to replace MSP revenue.
“That leaves, basically, raising your income tax or creating a new tax,” Bernier said. “The B.C. NDP are trying to fool people into believing they are eliminating the MSP when it is clear they are not. They are playing hide-the-tax and hope no one sees it.”
James didn’t rule out tax hikes. “We’re going to be looking at everything,” James told CKNW reporter Liza Yuzda. “Making a fair tax system is important, but also affordability is critical for families.”
NDP Leader John Horgan promised during the election to “protect” low- and middle-income earners from tax hikes.
Asked at the time to define a “high-income earner,” Horgan — now the premier — said it was someone making $60,000 to $70,000 a year or more, something the Liberals continue to seize on.
“Middle-class incomes can be much higher than $60,000 annually,” Liberal MLA Jas Johal said.
“People are justifiably worried about taxes and how much John Horgan and the B.C. NDP are going to whack the middle class.”
But James insisted the government’s top priority is to “make life more affordable” for people while protecting vital services like health care.
She said more details will be contained in her first full budget this February.