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

Remorse high for Vernon man sentenced for car surfing death

Driver of car that killed friend who was car surfing gets nine months in jail

Lumby featured on CBC show Still Standing

Filming concludes Friday with a comedy show at the White Valley Community Centre.

Vernon taekwon-do pair off to world championships

Student Brianna Li and coach David White of Sundance Taekwon-Do earn spots with national team

Vernon Kin Race Track appeal abandoned

Okanagan Equestrian Society drops appeal of ruling favouring City of Vernon, regional district

French Immersion feedback positive for Vernon School District

Ninety-one families lined up for 88 spots this week

B.C. opioid crisis to get same world-renowned treatment approach as HIV/AIDS

A program that focuses on treatment as prevention will roll out Jan. 17

Olympian snowboarder Max Parrot diagnosed with Hodgkin’s lymphoma

Each year in Canada, approximately 900 people are diagnosed with Hodgkin’s lymphoma

‘Prince of Pot’ Marc Emery accused of sexual assault, harassment

Emery denied the allegations, but a Toronto woman says she is not the only one speaking out

Vancouver Island photographer makes National Geographic’s 2018 elite

Rare double honour for Marston from the 36 best Your Shots out of nearly 19,000 photos

Ex-Liberal candidate in Burnaby, B.C., says volunteer wrote controversial post

Karen Wang dropped out following online post singling out NDP Leader Jagmeet Singh’s ethnicity

Asteroids are smacking Earth twice as often as before

The team counted 29 craters that were no older than 290 million years

Canada’s arrest of Huawei exec an act of ‘backstabbing,’ Chinese ambassador says

China has called Canada’s arrest of Huawei chief financial officer Meng Wanzhou ‘politically motivated’

In limbo: Leftover embryos challenge clinics, couples

Some are outright abandoned by people who quit paying storage fees and other couples struggle with tough decisions

BREAKING: Jury finds man accused of killing B.C. girl, 12, guilty

Twelve-year-old Monica Jack disappeared in May 1978 while riding her bike along a highway in Merritt, B.C.

Most Read