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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Mary Lowther column: Attracting beneficial insects to the garden

If we’re lucky, our own oases of pesticide-free gardens and farms will continue to buzz

Snag hit in Lake Cowichan’s A.B. Greenwell property transfer

“We ran into a brick wall,” confirmed Lake Cowichan chief administrative officer Joe Fernandez.

Business notes: Duncan’s Sands Funeral Chapel in the pink for Pink Shirt Day

Staff at Sands Funeral Chapel are wearing pink to demonstrate how important the anti-bullying day is

‘Marvelous Wonderettes’ sets high bar for Chemainus Theatre season

The script is perfect for Chemainus’s small stage

Thieves steal 6-foot gas pump from Duncan yard

Theft took place overnight on Feb. 6 or into the early morning hours of Feb. 7.

Blair says RCMP have met Wet’suwet’en conditions, so barricades should come down

The Wet’suwet’en’s hereditary chiefs oppose the Coastal GasLink project

B.C., federal ministers plead for meeting Wet’suwet’en dissidents

Scott Fraser, Carolyn Bennett standing by to return to Smithers

B.C. mom’s complaint about ‘R word’ in children’s ministry email sparks review

In 2020, the ‘R’ word shouldn’t be used, Sue Robins says

New Jamie Bacon trial for counselling to commit murder charge set for March 3

The trial is set to start on March 3 at B.C. Supreme Court

Federal minister pledges to meet Wet’suwet’en chiefs in B.C. over natural gas pipeline

The Wet’suwet’en hereditary chiefs say they are visiting Mohawk territory

2010 leader John Furlong urges Vancouver to bid for 2030 Winter Games

VANOC said the 2010 games broke even financially

Pipeline dispute: Tories put no-confidence motion on House of Commons agenda

Conservatives say they have no confidence in the Trudeau government to end the rail blockades

Canadians aboard coronavirus-ridden cruise ship to return home tonight

Among the infected are 47 Canadians who will have to remain in Japan for treatment

Most Read