Small businesses in B.C. fear they’ll bear the brunt of the new employer health tax. (Patricktomasso photo)

30% of B.C. small businesses expect to cut staff to offset new payroll tax: report

Greater Vancouver Board of Trade said small, medium sized businesses will be hit the hardest

Small- and medium-sized businesses will bear the brunt of the incoming employer health tax, according to a survey from the Greater Vancouver Board of Trade released Monday.

The new tax, introduced by the NDP in February, will take effect on Jan. 1, 2019, and hits businesses with payrolls of more than $500,000. The tax rate is 1.95 per cent for payrolls above $1.5 million, with reduced rates for those between $500,000 and $1.5 million.

Two-thirds of small businesses, defined as those with fewer than 50 employees, say they expect to pay the incoming tax, which is estimated to cost them about $40,000 annually.

One-third of those employers already pay their staff’s current Medical Service Plan premiumss, which won’t be phased out till the end of 2019, meaning those businesses will be double-taxed for a year.

READ MORE: BC NDP getting employer push-back on health care tax

Of those small businesses who foresee having to pay the tax, 30 per cent say they expect to cut staff to help offset costs.

“Payroll taxes are job-killers, as they increase the cost of employing people and growing businesses,” said Chris Gardner, president and CEO of the Independent Contractors and Businesses Association.

“When you add it to the NDP’s carbon, income and other tax increases, record-high gas prices, cities passing along their own payroll tax costs through higher property taxes, and shaken investor confidence in B.C., it’s perfectly understandable that job creators are reeling.”

In defending the tax, Finance Minister Carole James pointed to her government chopping MSP premiums in half at the start of the year.

A finance ministry spokesperson cited B.C.’s real GDP growth of 2.4 per cent, the highest in Canada.

“We’ve taken concrete steps to improve business competitiveness from cutting the small business tax rate and taking the PST off of electricity to tackling the housing and childcare crises,” the statement read. We will continue taking the steps needed to ensure that B.C. is an economic leader today and tomorrow. ”

The province cut the small business tax rate by 20 per cent, down to two per cent.


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Glimpses of Revelstoke’s past for May 22

120 Years Ago: Revelstoke Herald, May 20, 1899 Great improvements had been… Continue reading

Another climate rally scheduled for Friday in Revelstoke

Join students at City Hall to call for climate action

Roads and weather for Revelstoke today

No new fires in the Southeast Fire Centre

Revelstoke Community Calendar for May 22

Downhill Fiver Series May 26, 10 a.m. Get stoked for the 2019… Continue reading

Okanagan-Shuswap weather: rain, clouds, thunderstorms and flash floods

Environment Canada forecasts dreadful weather for Thursday

600 new campsites coming to provincial parks and recreation sites across B.C.

Tourism Minister announced half of the new spots to 13 most popular provincial parks

Raptors beat Bucks 105-99 to move within 1 game of NBA Finals

Leonard scores 35 as Toronto takes 3-2 series lead over Milwaukee

Okanagan housing builds hope for 52 homeless individuals

The 52 unit supported housing apartment officially opens in Vernon

Gardens plant hope for Okanagan residents who were once homeless

Turning Points, in collaberation with Briteland, bring square foot gardening to Blair Apartments

Municipalities protest after B.C. declares marijuana crops ‘farm use’

UBCM president seeks answers in letter to John Horgan government

RCMP set to patrol Okanagan lakes

Vernon-North Okanagan members will be on area waters helping keep boaters safe

Popular Peachland park reopens

Hardy Falls Regional Park has been closed from flood damage since 2017

Summerland students to raise voices in public speech competition

Public speaking component is included in high school English program

CMHC defends mortgage stress test changes amid calls for loosening rules

Uninsured borrowers must now show they could service their mortgage if rates rose two per cent

Most Read