B.C. businesses say new health tax will raise prices for consumers
VANCOUVER — Eric Pateman says a new health care tax in British Columbia will add about $30,000 to the annual payroll costs for his Vancouver restaurant, and with tight profit margins there is little room to absorb the increase.
Many restaurants struggle to maintain adequate staffing levels, he said, meaning reducing staff at his restaurant Edible Canada isn’t an option. The only area to recoup costs is to increase prices.
“We are continuing to push the upper envelop on menu pricing,” he said in an interview. “As an independent business owner … constantly looking at a shrinking and eroding bottom line, this kind of stuff scares the crap out of you.”
This week’s provincial budget eliminates medical service premiums in 2020, to be replaced by payroll tax of 1.95 per cent for companies with a payroll over $1.5 million. Companies with a payroll under $500,000 will be exempt from the tax, while those in between will pay a reduced rate.