British Columbians are bracing for several new taxes set to take effect in the new year.
Businesses will start paying the province’s new Employers Health Tax on Jan. 1 – a tax announced earlier this year by the B.C. NDP to replace the costs of the Medical Service Plan premiums. Those premiums will remain in effect until 2020.
Kris Sims, B.C. director of the Canadian Taxpayers Federation, said that stacking the new tax on the pre-existing MSP premiums creates a double-dip of taxation on many B.C. employers for the year, including municipalities like Kamloops.
The new tax impacts businesses that have a payroll of more than $500,000, with a 1.95 per cent tax set on businesses with a payroll of over $1.5 million. Sims said this forces many cities to look to budget cuts or increase property taxes — a move already in the works in some regions.
Kamloops finance director Kathy Humphrey has estimated an additional $600,000 cost to the city in 2019. Once the MSP is reduced in 2020, the city will pay $150,000 to $200,000 extra going forward.
In June, Finance Minister Carole James said that replacing MSP premiums follows the lead of other provinces, in what she called a much fairer and progressive way.
James also said most municipalities will be able to absorb the cost, which would at its highest equate to $40 per household in additional taxes or fees.
Locally, Kamloops property owners are looking at a preliminary tax increase of 3.4 per cent, about $65 for the average-assessed property, and a 15 per cent hike in sewer rates, which equals about $54 per average-assessed home.
Kamloops property owners will also pay 1.5 per cent more each year for the next decade on the hospital tax portion of their property tax bill. The increase amounts to about $2.25 for the average household in the hospital district, which in 2018 was valued at $311,000
Other taxes taking effect through 2019 include the controversial school tax, an increase to B.C.’s carbon tax and an increase to the TransLink tax for motorists in parts of the Lower Mainland.
The school tax applies to homes valued at more than $3 million, which is then placed into general revenue.
A tax increase of 0.2 per cent will be placed on the residential portion of a property valued above $3 million. It would increase to 0.4 per cent on the portion above $4 million.
The carbon tax, which impacts everyone across the province, will rise to $40 per tonne from $35 a tonne on April 1. Meanwhile, FortisBC will be increasing its residential customer rate for natural gas by nine per cent – an interim rate approved by the B.C. Utilities Commission.
Then there’s the proposed 6.3 per cent ICBC rate hike, which is being reviewed by the commission. If approved, it will take effect in April and increase basic insurance rates by an average of $60.