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Report questions B.C.’s Employer Health Tax, but Eby says no plans for change

Eby promises support for struggling sectors after release of report critical of government

Premier David Eby rejected calls for reforming the Employer Health Tax following the release of a report that raised questions about the costs of doing business in British Columbia.

But Eby acknowledged that some sectors are struggling, he added that the government is working with them.

“(Healthcare) is paid for with taxes. This is not a time when we are looking at reducing funding to healthcare. This is a time when our health care system needs that continued support from British Columbians, including B.C. businesses.”

The tax replaced the “unfair” Medical Services Premium, “which increased regularly and penalized regular people,” he said. Some sectors are struggling, but the “province is doing very well economically,” with exports up 20 per cent this year.

Eby made the comments May 26 in Nanaimo, where he was announcing a cancer care centre.

READ MORE: Province has concept plan for new cancer care centre at Nanaimo hospital

But some sectors, such as the forestry sector and parts of the tourism-hospitality industry, are struggling.

“We are going to take the actions that are necessary to support those sectors to make sure that they are not alone in this struggle,” Eby said. “The province is working with them to ensure that we are supporting the workers and the businesses in these sectors.”

BC Greens Leader Sonia Furstenau repeated calls for reforms to the health tax following the release of a report from the Greater Vancouver Board of Trade.

Counting the Costs: Assessing Economic Challenges for Businesses in British Columbia” argues that businesses will have shouldered an additional $6.5 billion in direct costs between 2022 and 2024 because of various governmental policies, including the introduction of the tax in 2019.

The report says that the tax paid by employers based on the wages of their employees accounts for almost 62 per cent of the additional costs in calling for a higher threshold. Employers with payrolls above $500,000 must pay the tax and the board would like to see government raise the threshold.

This demand echoes earlier calls from the BC Chamber of Commerce — which called on government to raise the threshold to $1.5 million — and Furstenau doubled down on it after the release of the board’s report.

RELATED: Health tax changes, expedited permitting top B.C. Chamber of Commerce’s wish list

By raising the tax exemption to $1.5 million, B.C. can offer what much-needed financial to small and medium-sized businesses that would allow them to save thousands of dollars yearly, Furstenau said.

“In an era where every penny counts, this relief can make a substantial difference in the ability for businesses to not only survive but also thrive,” she said. “Small- and medium-sized businesses are the backbone of the economy, contributing to the vibrancy and resilience of our communities. It is the government’s responsibility to create a supportive environment for their success, equipping them with the tools and conditions to navigate these challenging times.”

Other concerns raised by the board of trade include hikes in the minimum wage, an increase in the tax rate for top earners and a new statutory provincial holiday on Sept. 30 to mark Reconciliation with First Nations.


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Wolf Depner

About the Author: Wolf Depner

I joined the national team with Black Press Media in 2023 from the Peninsula News Review, where I had reported on Vancouver Island's Saanich Peninsula since 2019.
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