Vernon businesses brace for massive tax rate

Vernon businesses brace for massive tax rate

B.C. budget elimination of MSPs downloaded onto businesses

The Greater Vernon Chamber applauds the province for committing to making key investments in housing attainability and available child care, however is concerned that business will be facing a cumulative effect of crippling tax increases that will impact business ability to sustain or grow.

While the Chamber supported an elimination of MSP premiums and recognizes the importance of a healthy workforce it is concerned that MSP will now be fully paid by business and will be a direct cost to the business bottom line.

See related: Liberals lukewarm on budget

“Businesses will be footing the bill to the tune of almost $2 billion by 2020-21 to cover the full phase-out of MSP premiums,” says Markus Schrott Greater Vernon Chamber president. “This new tax combined with other increases to business will have a negative effect on growth and investment.”

Clarity is still required on how the timing of how the new Employer tax will be implemented as it is unclear how much overlap will occur between the current MSP collection that is occurring and whether employers who currently pay MSP will be paying twice.

Another concern is the new allocation of MRDT revenue. Revenue collected from MRDT can now be used to fund affordable housing initiatives through municipal revitalization agreements. It currently is uncertain on how this new allocation will be implemented and who will determine the initiatives.

The provincial government is investing over $1.9 billion over 3 years in a comprehensive housing plan which will help build affordable housing, including homes for growing families, homes for seniors, housing options for women and children fleeing violence and student housing. This investment aligns with the BC Chamber policy on affordable housing which recommends increased rental support through the Shelter Aid for elderly renters and the rental assistance program for lower income British Columbians.

The single most significant change in the government’s fiscal outlook in the current year is a charge of nearly $900 million from losses at the Insurance Corporation of BC (ICBC). Over the longer term, the budget is forecast to maintain a modest surplus in each year of the three-year fiscal plan, in the range of $200 million to $300 million per year. The Province’s operating debt remains on track to be eliminated in the next fiscal year. This does not increase capital spending, but the total debt to GDP ratio (including capital spending) will remain relatively constant at around 16 per cent.



newsroom@vernonmorningstar.com

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