BC’s new health employer tax is expected to have a big impact on the City of Vernon.
The tax — which starts next year — is based on payroll, with the city’s totaling 23 million dollars a year.
Mayor Akbal Mund says it replaces the MSP premiums which will be eliminated in 2020.
“When you start giving on one side, you have to find the money on the other side. So, by dropping all the MSP, where are you going to get it from? Somebody has to pay for it, so this is a way to find some of that money.”
The new tax is expected to cost the city 448-thousand dollars a year.
“There is no action that we can do except for finding more money to pay for it right now. Of course this doesn’t kick in until the new council will be in, and obviously they’ll seek direction from administration to see how we are going to deal with it.”
Mund notes that for one year, there will be an overlap.
“It’s almost like a double dip, because with the government health tax being enacted in 2019, the MSP isn’t actually being dropped until 2020.”
Mund says administration is looking at ways to pay for the new tax, part of 1.2 million dollars in expected taxation impact for the 2019 budget.