The Opposition Liberals say the NDP’s new budget will result in billions of dollars in new taxes.
“It’s different types of taxes, but we’re looking at about 5.5 billion dollars in increased taxes,” says Vernon Monashee MLA Eric Foster.
Foster says a new employer health tax will come on line in 2019, one year before Medical Service Plan (MSP) premiums are eliminated.
He says businesses with payrolls over a half million dollars will be impacted.
“At the end of the day, they are going to collect more money in the tax than they even collected with the MSP, and it’s going to come right out of the employers,” Foster tells CJIB News.
Foster says when you start taxing businesses in an unfriendly manner, they will move somewhere else.
“They are doing what they said they were going to do: They’re spending all this money and they’re going to tax the people that have more, and that’s socialism. Take from the rich and give to the poor. That’s exactly what they’re doing,” says Foster.
Finance Minister Carole James says once MSP premiums are eliminated in 2020, individuals will save up to 900 dollars a year and families up to 18-hundred a year.
James also announced a speculation tax, and increases in the foreign buyers’ tax, to address housing affordability by reducing foreign demand, and curbing speculation in the residential property market.
Shuswap MLA Greg Kyllo says increased spending on child care and housing are great, but that won’t spark any new business investment in BC.
“(The budget was) a big disappointed for sure, but I’ve got to admit I’m not surprised. It was the typical NDP with tax and spend. It was big on spending commitments, but in no way did the speaker talk about increasing BC’s competitiveness,” says Kyllo.
Kyllo is concerned about the new employer health tax in 2019 which will allow for the full elimination of MSP premiums in 2020.
“That’s additional taxation of the business community that will be kicking in, and that’s being paid prior to the MSP cut being initiated, so that’s additional taxation on business of 463 million,” says Kyllo.
The NDP will invest 1.6 billion dollars over three years on housing measures, and $1 billion over three years as part of a universal child care plan.
“Over three years, an investment of more than $1 billion will set the province on the path to a universal child-care plan that will make child care affordable for parents and caregivers, create more than 22,000 child-care spaces throughout the province and ensure those spaces meet rigorous quality and safety standards,” says a government news release.
“Budget 2018 also lays out a comprehensive housing plan that introduces new taxation measures to tackle foreign and domestic speculation, to close loopholes and crack down on tax fraud, and to stabilize housing prices. It invests more than $1.6 billion over three years to build and maintain affordable rental housing, help finance student housing, increase rental assistance for low-income seniors and working families, and provide supportive housing for at-risk British Columbians.”
Green leader Andrew Weaver says it’s refreshing to see a budget with a focus on people, but he’s concerned challenges presented by the emerging economy, and from climate change are not receiving adequate attention.
“We need a vision for seizing the opportunities and addressing the challenges of the 21st century. Our goal shouldn’t just be to only fix the shortcomings of the last 16 years – as leaders we need to champion a clear plan for the economy and the challenges and opportunities of the coming decades,” says Weaver.
The Canadian Centre for Policy Alternatives applauds the investments in child care and housing, but says more is needed to address climate change and poverty.
“Creation of the child care program — BC’s first major new social program in generations — must be celebrated,” said senior economist Iglika Ivanova of the $1.2 billion investment over three years.
“Not only will this help children get off to a good start, more mothers will be able to work and new jobs will be created, which will boost the economy and increase tax revenues almost immediately.”
BC Teachers Federation President Glen Hansman praised the government’s focus on childcare and housing in the NDP’s first full budget, saying, “British Columbia needs to tackle the current affordability crisis in order to solve the ongoing teacher shortage in BC schools.”
“The new BC budget’s focus on housing and universal childcare will benefit many of BC’s public school teachers,” said Hansman. “BC has several thousand young teachers who were hired following our Supreme Court of Canada win. They and many others will benefit from the start of a new affordable childcare program. This budget’s overall focus on affordability will help recruit qualified teachers from other provinces to BC to help address our province’s ongoing teacher shortage.”
The BC Poverty Coalition was concerned the budget didn’t put enough focus on the poorest British Columbians.
“It is good to see the rebuilding and enhancing of BC’s social services through the budget focus on housing and child care but we are leaving many British Columbians far behind. There are no increases to welfare and disability rates, leaving approximately 180,000 British Columbians struggling to survive on these deeply inadequate rates,” says Trish Garner, Community Organizer of the BC Poverty Reduction Coalition.
The Kelowna Chamber of Commerce is giving the NDP’s budget a C plus. It says investments of more than 6 billion dollars over 10 years to deal with housing and child care will help small business owners recruit and retain staff, but it is concerned the tax increase on foreign buyers and the property transfer tax could lead to a decline in investment that would help increase the supply side of housing.
Chamber President Tom Dyas also says the plan to eliminate MSP premiums by 2020 will leave the business community to pick up a 1.92 billion dollar tab that will have a negative effect on growth and investment.
Restaurants Canada says phasing out MSP by 2020 and imposing a new health payroll tax on businesses in January 2019 will hurt restaurateurs and their ability to grow employment as B.C.’s third largest private sector employer.
“Economic research makes it clear that payroll taxes kill jobs and this new payroll tax will do just that,” says Mark von Schellwitz, Vice President, Western Canada. “This new payroll tax, in combination with significant increases to the minimum wage over the next couple of years, will add sizeable new labour costs to the hospitality industry which will force restaurateurs to reduce employee hours or increase prices to recoup these mandated costs,” added von Schellwitz.
Only small business employers with a payroll of less than $500,000 will be exempt from the new health payroll tax. Businesses with a payroll between $500,000-$750,000 will pay a .98% payroll tax, those with a $1 million payroll will pay a 1.46% payroll tax, those with a $1,250,000 payroll will pay 1.76%, and those with a payroll of $1.5 million or more will pay a 1.95% payroll tax.