Municipalities — and municipal taxpayers — get it in the neck once again. This time, it’s the new provincial payroll tax for health care.
British Columbians who cheered the new NDP government for removing Medical Services Plan premiums are being reminded that someone always has to pay the piper. And the only “someone” is those same British Columbians, in their roles as taxpayers and customers.
To replace MSP premiums, the province is levying a tax on employers with payrolls of more than $500,000 a year, beginning Jan. 1, 2020. Those at more than $1.5 million face the full 1.95 per cent levy.
Businesses have the option of passing along the cost to customers or absorbing it, if they can afford to do that. For municipalities, it is going to mean raising property taxes or cutting services.
Victoria estimates it would mean a two per cent tax increase, on top of about 2.5 per cent already expected.
While the NDP campaigned on the issue of removing MSP premiums, voters didn’t expect to get hit in quite this way. Municipalities and businesses certainly didn’t.
Businesses end up paying twice, through their own payroll tax and the increased property taxes to cover municipal employees’ payroll tax.
As the government has found with its property-speculation tax, unintended consequences lurk behind every new fiscal move. The imposition on municipalities and their taxpayers needs a rethink.
