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

Family needs help while dad recovering from surgery

Go Fund Me set up to help family recover from father’s two major back surgeries

If you have N7 Nitro Cold Brew Coffee do not drink it

Interior Health advises N7 Nitro Cold Brew Coffee from Cherry Hill Coffee has been recalled

Ground breaks on new hotel project

The Best Western will add 72 new rooms for visitors

An armload of cute!

Spring is here and so are the animals

Spring has arrived!

The first day of Spring arrived today, Wednesday, Mar. 20, at 2:58 p.m.

VIDEO: The ‘most cosmopolitan’ of butterflies could migrate to B.C.

The painted lady butterfly will likely arrive this summer from Southern California

Is it a homicide? B.C. woman dies in hospital, seven months after being shot

Stepfather think Chilliwack case should now be a homicide, but IHIT has not confirmed anything

Indecent caller handed 18-month conditional sentence

Vancouver Island man pleaded guilty to making indecent phone and video calls to women across B.C.

Sources say Trudeau rejected Wilson-Raybould’s conservative pick for high court

Wilson-Raybould said Monday “there was no conflict between the PM and myself”

First Nations public art piece stolen in Nanaimo

Spindle Whorl went missing over the weekend, according to Nanaimo RCMP

Father-son duo at B.C. Children’s Hospital helps new dads fight depression

The pair teamed up to introduce the only known research-based mindfulness workshop for new dads

Mexican restaurant in B.C. told to take down Mexican flag

General manager of Primo’s Mexican Grill in White Rock: ‘I’ve never heard of anything like this’

B.C. NDP moves to provide tax credits, tax cut for LNG Canada

Provincial sales tax break of $596 million repayable after construction

COLUMN: Smart phone too powerful a tool to yank from students’ hands

Rather than ban them from schools, let’s teach kids to harness their phone’s power and use it properly

Most Read