BC BUDGET: ADDED BURDENS WILL HURT BUSINESS
The BC Provincial Budget was tabled in Victoria two weeks ago. As anticipated and promised in the election, there was significant focus on housing and daycare. Two items that need attention and will help everyone including business.
Over $6 billion has been committed to stabilizing the housing market over the next 10 years. The stabilization addresses a key challenge for business: attracting and retaining talent.
The surprise of the budget came when the government chose to fund the elimination of MSP premiums by bringing in the Employer Health Tax. Employers will be expected to take on the burden of MSP
premiums, totaling $1.92 billion by the fiscal year 2020. To compound this hit, the tax will kick in one year before the premiums are eliminated.
This new tax was a complete surprise to the business community and went against some of the direction the government’s own task force setup to make recommendations on MSP premiums.
This is only one of the many increases businesses across the province are facing. Beyond the Employer Health Tax, businesses are also subject to an increased carbon tax, corporate tax rate and the minimum wage is on the gradual rise to $15 per hour. The Federal Budget was announced last week. Please click here to see our response on this.
Businesses bottom lines are being hit – hard with new taxes and increases in other areas. The government is discouraging employers from hiring, increasing wages, and increasing hours.
Canada’s biggest trading partner and biggest competitor for talent is moving in the exact opposite direction with respect to taxation and regulation. This widening gap will hurt businesses and ultimately their employees.
In order for our economy to thrive, businesses need to remain competitive in the national and global markets and be optimistic about their future. By continually adding to the burden of business, this becomes more and more difficult. The balanced BC Budget starts to address housing and childcare concerns but the underlying burden being placed on businesses may have a negative impact overall.