Council Concerned Over EHT

By Cheryl Jahn
June 13, 2018 - 3:34pm Updated: June 13, 2018 - 7:33pm

PRINCE GEORGE - City Council wants a better picture of the implications of moving away from the Medical Services Plan to the Employer Tax. 
MSP will be phased out by 2020, while the EHT will be phased in next year. 
A recent survey by the Union of BC Municipalities conducted on 77 communities of differing sizes painted a grim picture for many municipalities, including Prince George. Under the former MSP program, the City paid out $667,358 in health care premiums in 2017. That dropped to $333,679 this year. However, next year, when the MSP is in its final phase and the EHT is coming in, the City will pay $1.67 million. By the time the new tax is phased in, the City will be paying $1.37 million annually in health care premiums for its employees.

"The numbers that UBCM came out with are staggering numbers on a year-to-year basis.," says Mayor Lyn Hall, who brought up the survey at the latest Council meeting. "That's why we've asked our Manager [of Finance] to take a look at that. I'm not disputing the numbers from UBCM, but we need to have numbers that we pull out and are able to hang our hat on, that are specific to Prince George."

The BC Chamber of Commerce has already sent a message to the government via a resolution from its AGM in late May.

"One of the most profound discussions around that was, the MSP Task Force that was struck in 2017 has produced an interim report. But the completed report is not going to be handled until 2019," says Todd Corrigall, CEO of the Prince George Chamber of Commerce.  "So what we're asking for is to take a step back [from the EHT]. Let's wait and understand what that completed report says so that it can be strategically lead forward in whatever direction it's going to go."

The resolution put forward by the BC Chamber is asking the government to eliminate the proposed Employer Health Tax and if it does move forward, it a series of requests, including a higher threshold for exemption and have it brought in after the MSP is phased out to avoid "double dipping."

In the meantime, the City's Finance Department will crunch the numbers and have a report to the Finance and Audit Committee at a later date. But, there was suggestion during that Council meeting that the implications to the tax levy, based on the UBCM numbers, could be as high as one percent of the tax levy. 

 "That's the only option. If we're going to be hit with increased costs around the MSP piece, then, of course, we're going to have to take a look at the tax base. How do we make up for this, if it's $700,000 or a million dollars, how do we make up for that? Our only option is to go with the tax piece."

Either that or Council will have to look at reducing services.

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