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

Goals for giving hope nets $4,300

Prince Rupert Port Authority presented the cheque to the Salvation Army on Feb. 16

Heart of Our City: A counselor and a competitor

Roberta Edzerza has left a mark on the court and in the classroom

CityWest announces fibre-to-the-home expansion plans

CityWest plans to provide service to half the city by the end of 2018

Prince Rupert Rampage fall to River Kings

The Prince Rupert Rampage were eliminated by the River Kings Sunday, sparking a massive post-game brawl.

Rampage bounce back, force a game 3

Prince Rupert beat Terrace River Kings 8-1 on Feb. 16

Ice skating on the North Coast, a rare treat

Seawolves hockey players bring their gear to Oliver Lake this week to play on the outdoor rink

B.C. high school robotics team ranked first in the world for programming

The Surrey team was also named tournament finalists at VEX Robotics Competition on Feb. 1

Man shot dead in front of Kamloops hotel may be case of mistaken identity: RCMP

Rex Gill, 44, was not previously known to Kamloops police unlike second shooting victim

New trial ordered over banning whales, dolphins at Vancouver aquarium

Park board’s appeal reverses previous decision that found it had no right to implement a ban

Payless to close 248 Canadian stores, saying it’s ‘ill-equipped’ for market

The company will begin closing stores at the end of March

Make sure measles shots up to date, Public Health Agency says

Measles causes high fever, coughing, sneezing and a widespread painful rash

Super snow moon set to rise across B.C.

It is the biggest and brightest moon of the year

Minister says plans to fight poverty, climate change, focus of B.C. budget

The NDP said in its throne speech last week that affordability will be the hallmark of its initiatives

UPDATED: ‘Violent’ B.C. man back in custody after Alberta arrest

Prince George man with ties to Vernon was being sought by police

Most Read