Businesses, cities grapple with new tax
“What cheeses us off is the NDP campaigned on getting rid of the MSP but they didn’t say they were just going to replace it with another tax. We fully expect them to do a better job on the money they take in.”
Sims said the cost of the EHT, which starts at .98 per cent and goes up to 1.5 per cent of payroll, will be borne by all large employers. They will have less money to hire new staff or give raises, hurting the working class, she said.
Sims also said the $500,000 exemption cutoff for businesses to pay the EHT will be a disincentive for those small businesses to grow.
And municipal governments will pass the cost on to ratepayers.
Kamloops city hall will pay $1.2 million more for the EHT, $500,000 of that coming from its reserves and the rest from higher taxes, according to the city’s corporate services director, Kathy Humphrey.
“In 2020, we estimate that our EHT costs will be about $200,000 higher (a year) than we were pay- ing with full MSP costs,” she said in an email.
Finance Minister Carole James wasn’t available to comment but her office sent an emailed statement that said implementing the EHT and ending MSP premiums will cut taxes by $800 million a year, “one of the biggest middleclass tax cuts in B.C. history.”
The finance ministry wouldn’t provide data on how many British Columbians pay premiums of up to $37.50 a month for singles and $75 a month for families (low-income families earning $26,000 and less are exempt) but said cutting MSP premiums will save $900 a year for singles and $1,800 for families.
The ministry claims the MSP was unfair because it was “disproportionately paid by working and middle-class people.”
The ministry also claims some municipalities will pay less under EHT. But for those who will pay more and have to raise taxes, it will be “only a few dollars per household per month.”
Other increases include B.C.’s per-tonne carbon tax jumping to $40 from $35 on April 1, and the per-litre carbon tax rising to 8.89 cents from 7.78 cents.
Also, on April 1, a TransLink tax of 1.5 cents a litre of gas (up to 18.5 cents a litre) kicks in, said Sims.
The federation also reported CPP premiums will rise in 2019 by 0.15 per cent, or $98 a year for a worker making $60,000 a year.
CPP is set to rise over five years to a total of $550 a year for a $60,000 a year worker, who will pay $380 extra after offsetting tax cuts.
But EI premiums are dropping slightly to 1.62 per cent from 1.66 per cent, or about $17 a year for a typical worker (plus a drop of $24 a year for employers).
And the federal small business tax rate is dropping to nine per cent from 10 per cent.
For anyone with money left over, Ottawa has raised the amount of savings they can put away tax free by upping the limit for the taxfree savings account, or TFSA, to $6,000 from $5,500 a year.