B.C. Finance Minister Carole James has introduced the Employer Health Tax to replace Medical Service Plan premiums. File photo. (CBC)
The B.C. government is moving forward on plans to eliminate Medical Service Plan (MSP) premiums by introducing the Employer Health Tax (EHT).
Finance minister Carole James tabled the bill Tuesday morning in the legislature.
The province says it will reduce taxes for B.C. residents and businesses by about $800 million a year.
In a release, James said, “The last government chose to double MSP fees, costing families hundreds of dollars a year. People deserve a break, which is why we’re eliminating regressive MSP premiums.”
James calls the EHT a fairer approach and similar to other provinces.
The government said it was eliminating MSP premiums when it unveiled the provincial budget in February.
The EHT applies to all employers starting in January and the province says small businesses would be protected by a $500,00 exemption amount that phases-out gradually.
But businesses with payrolls between $500,000 and $1.5 million will pay 2.925 per cent of their payroll minus $500,000.
Employers will end up paying the full 1.95 per cent of EHT for payroll that exceeds $1.5 million, which the province says amounts to less than five per cent of businesses in B.C.
READ MORE: Greater Victoria businesses send letter to BC Finance Minister over new health tax
The legislation sees charities and non-profits get a $1.5 million exemption amount.
The government plans to eliminate MSP premiums by Jan. 1, 2020.
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