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The “employer health” tax, as it is dubbed by government, requires companies with payrolls over $500,000 a year to pay a 0.98 per cent tax on annual payroll. The tax goes up in increments up for every $250,000 in payroll. Big companies will be hardest hit as they will pay a 1.95 per cent of tax on payrolls over $1.5 million.


Since the government is one of the biggest employers in B.C., the public sector will account for about 20 per cent (ultimately $400 million a year) of the revenue that new tax brings in when fully implemented, Finance Minister Carole James said.

The tax is projected to bring in $463 million in 2018-19 (it applies for only the last three months of that fiscal year), $1.85 billion in 2019-20, and $1.92 billion in 2020-21. MSP premiums brought in $2.6 billion annually in revenue so there will still be a revenue gap to make up.

A government-appointed group will make other recommendations by the end of March on ways to offset the remainder of revenue lost through MSP premium elimination. An income tax surcharge is one possibility. Budget documents say the final analysis will focus on “progressivity, fairness and competitiveness of the tax system.”