Local governments, including the Regional District of Bulkley-Nechako, may see costs rise as the provincial government implements the Employer Health Tax. (Houston Today file photo)

Employer health tax may strain local governments

RDBN on the hook for an extra $24,000 by 2020

Local governments across the province — including the Regional District of Bulkley-Nechako (RDBN) — may soon be on the hook for a hike in expenses as the province rolls out its new health tax system.

The provincial government is phasing out Medical Service Plan (MSP) premiums over the next two years, replacing them with a new payroll tax paid by employers.

Businesses and organizations with payrolls amounting to less than $500,000 are exempt from the tax, which is based on a sliding scale that reaches up to 1.95 percent for payrolls exceeding $1.5 million.

Bigger bill for RDBN

The new system will increase expenses for the RDBN by more than $24,000 annually, compared to costs under the MSP system — an increase of roughly 50 percent — according to estimates by Kristi Rensby, finance and administration coordinator for the RDBN.

In 2017, the regional district paid $52,919 in health premiums on a payroll worth $3.4 million. Under the Employer Health Tax (EHT), the regional district will be paying an estimated $77,040 in health taxes by 2020 — $24,121 more than in 2017.

The regional district currently pays MSP premiums for permanent employees who don’t have coverage through their spouse’s employer — but not for the directors on the region’s board.

But under the new system, the region will likely be on the hook for directors’ contributions, according to the report.

“This has an added cost to the RDBN, and therefore, to the taxpayer,” said Rensby in an April 18 report to the RDBN’s board.

However, it’s unclear whether a tax increase will ultimately be required — that will depend on a variety of budgetary factors that vary from year to year, said Melany de Weerdt, chief administrative officer for the RDBN.

UBCM finds higher costs

Many other local governments are expecting higher costs with the roll-out of the new employer tax, according to a new study by the UBCM, an organization representing local government in the province.

More than two-thirds of the 77 local governments surveyed for the study, which was published this month, indicated that costs would rise with the EHT’s implementation compared to 2017.

Among the respondents, 36 percent said their costs would rise by 25-100 percent, while 15 percent indicated that expenses would more than double.

Taken as a whole, the 77 communities — which account for 40 percent of all local governments in BC — will see their MSP-related costs double between 2017 and 2020 as a result of the new tax, from about $19 to $37 million, according to the study.

Just Posted

An unexpected sight south of Burns Lake

Cheslatta Carrier Nation Chief finds bear eating another bear’s carcass

Area restrictions rescinded in northwest B.C.

The orders will be rescinded Sept. 19 at noon

Verdun Mountain and Nadina Lake fires 100 per cent contained

Area restriction orders in effect for several fires

Vigil for Jessica Patrick

VIDEOS: Hundreds honour a young mother who lost her life. Jessica Patrick was 18.

Still unclear if Houston will benefit from new opioids crisis funding

Canada’s health minister has recently announced $71.7 million in emergency funding

Video: Flyers new mascot ‘Gritty’ a bearded, googly-eyed terror

The Philadelphia Flyers unveiled their new mascot Monday, and as one would expect of the team that gave us the “Broad Street Bullies,” he’s far from cuddly.

Canada aiming for the moon, and beyond, with new space technology efforts

With an eye on future lunar exploration, Canada’s space agency is calling on companies to present their ideas for everything from moon-rover power systems to innovative mineral prospecting techniques.

New Brunswick Premier meets with lieutenant-governor as Tories, Liberals vie for power

New Brunswick Premier Brian Gallant said the only other leader he had spoken with since results came in was Green Leader David Coon.

Trudeau looks to restart Canada’s UN charm offensive in New York City

Freeland says the question of job retraining in the 21st century — and the uncertainty that surrounds it — is the federal government’s central preoccupation.

Calgary mayor seeks person who leaked details of closed-door Olympic meeting

Calgary Mayor Naheed Nenshi says he will ask the city’s integrity commissioner to investigate a leak of details from an in-camera council meeting.

B.C. MP Cannings spared brunt of Ottawa tornadoes

MP Richard Cannings was spared the impact of the tornadoes that hit the Ottawa region

Edmonton cannabis company revenues more than triples to $19.1 million

Aurora Cannabis revenues more than triple in fourth quarter

B.C. pharmacist suspended for giving drugs with human placenta

RCMP had samples of the seized substances tested by Health Canada

Seattle one step closer to NHL after arena plan approved

Seattle City Council unanimously approved plans for a privately funded $700 million renovation of KeyArena

Most Read