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

PHOTOS: New River’s Edge Haunted Attraction offers Halloween thrills and chills

Mission Arts Council presenting it’s annual showcase from now until Oct. 31

Festival of Light event returns to Mission’s Clarke Theatre

Diwali celebration features entertainment, food, booths and more

VIDEO: Fire destroys historic Silverhill Hall

Community mourns loss of 99-year-old building

Woman sentenced for stabbing in Abbotsford mall food court

Crystal Deines previously served six years for fatal stabbing in Edmonton

Canucks owner says Abbotsford one ‘option’ for farm team

Club’s contract with current home of farm team expires at the end of this hockey year

Secret supper clubs test appetite for cannabis-infused food ahead of legalization

Chefs are eagerly awaiting pot edibles to become legal in Canada

Giants hand Victoria their first lost of the season

Langley’s WHL team went head to head with the Royals for the second day in a row, beating them 3-2.

Students unhappy with SFU’s response after violent incident in class

Professor, students say a man threw chairs and hit a female student

Enbridge to begin building road to access pipeline explosion site in B.C.

An explosion Tuesday knocked out a 91-centimetre line

Man struck by car in Burnaby: reports

Pedestrian was taken to hospital

Andrew Scheer on revamped NAFTA deal: ‘I would have signed a better one’

Conservative leader says he wouldn’t have signed USMCA

Matheson will have NHL hearing after Canucks rookie Pettersson hit

The 19-year-old Swedish centre appeared woozy after the hit

Police looking into VPD-involved collision that sent 3 to hospital

The independent police watchdog has been notified

Police investigate after woman stabbed in Vancouver

Report came in about a ‘disturbance’ in the Killarney neighbourhood

Most Read