Orders of the Day

Hon. M. Farnworth: I call second reading of Bill 44, Bud­get Measures Implementation Act.

Second Reading of Bills

BILL 44 — BUDGET MEASURES
IMPLEMENTATION (EMPLOYER
HEALTH TAX) ACT, 2018

Hon. C. James: I move that Bill 44 be read a second time now.

This bill enacts the employer health tax, along with the Budget Measures Implementation (Speculation and Vacancy Tax) Act, 2018.

[R. Chouhan in the chair.]

This bill is another piece of an important measure that was announced in Budget 2018 and is part of our government taking action to make life more affordable for British Columbians. I think, in all of the issues that have been raised with me since becoming an MLA in 2005, I have to say, often in our MLA offices — I’m sure I’m not the only one; I’m sure other MLAs have had this experience — we have heard the stories of families struggling with rising Medical Services Plan premiums.

[1:35 p.m.]

While other provinces, over the last number of many years, have been phasing out medical services premiums, in fact that didn’t happen here in British Columbia. We were the last province left with Medical Services Plan premiums. Not only were we the last province left with medical services premiums; we also saw — and families, most importantly, across this province saw — Medical Services Plan premiums increase year after year after year. In fact, they were doubled by the former government. That left individuals paying more than $900 a year and families paying over $1,800 a year.

I just want to stop for a minute to imagine the pressure that that puts on a family budget if you think about being a senior on a limited income and you’re paying $900 a year for basic medical services supports or if you’re a tradesperson and you’re getting work that may be working towards a full-time position and you’re having to put out $900. Or if you’re a young family, $1,800 a year is a huge amount of money. That’s a huge bite out of a household budget.

Not only that, but Medical Services Plan premiums really hit low- and middle-income earners much more than they hit high-income earners, because this was a regressive tax. Whether you earned $45,000 a year or $250,000, whether you earned $50,000 or $500,000, you, in fact, paid the same amount when it came to Medical Services Plan premiums. Not only was it a huge burden on families; it was an extra burden on low- and middle-income families. They had a larger burden because of the regressive tax, and that just isn’t fair.

That’s part of why we are bringing this forward. That’s part of why we were committed to eliminating medical services premiums and working to make life more affordable for people, making sure the tax system works for all British Columbians. Part of my mandate as Finance Minister is a fair tax system across British Columbia.

We started, in February’s budget, with a 50 percent cut to medical services premiums, already returning hundreds of dollars to people’s pockets and hundreds of dollars, as well, to businesses who’ve been paying medical services premiums for their employees, who also receive that 50 percent tax break this year and next year, when it comes to paying medical services premiums. It means that millions of people will have more money to spend in their communities.

When people have more money to spend, they actually spend it in their local communities, which will, again, support businesses throughout British Columbia. As I mentioned, employers are also saving the 50 percent this year and next. I think that’s a critical piece as well.

People have already talked to me about the difference it’s making in their lives. I mentioned the amounts earlier. If you’re paying $900 a year on a limited budget or you’re paying $1,800 a year as a family, to all of a sudden get 50 percent of that back and then to know that next January, you’re going to have all of that money in your pocket, it makes a huge difference.

Families have talked to me about the fact that it’s going to make a difference to buying school supplies for their kids in September. It’s going to make a difference around extracurricular programs their kids are going to be able to go to. It makes a difference to rent. If you’re a family and you have $1,800 a year additional, that gives you the ability to make those kinds of differences in your family budget and differences in your family’s lives.

After the increase in medical services premiums, after the challenge of that regressive tax, it is wonderful to be able to talk to people about that break — that 50 percent break that has already come and the 50 percent break to come.

What kind of approach are we taking? Well, through this legislation, we’re taking a fair approach that other provinces have already taken. In fact, many years ago most provinces already moved to the same approach that we have decided to use, which is to transition to the employer health tax.

Just so we’re clear on the numbers, medical services premiums in this province raise $2.6 billion annually, while the employer health tax will raise about $1.85 billion. That means there’s $800 million in savings — $800 million in a tax break for businesses, for individuals in this province, resources that are not coming back to government, in fact.

I’ve heard some people describe this as additional tax. Well, in fact, the employer health tax is bringing in less than medical services premiums do, which means those dollars stay in families’ pockets and in businesses’ pockets as well.

The other piece I just want to address for a moment is the issue of competitive tax systems. It’s another issue that I’ve heard people talk about — that after the employer health tax is put in place, that’s going to make us less competitive.

[1:40 p.m.]

In fact, B.C. continues to have one of the most competitive tax environments in the country — the lowest personal income tax in Canada for individuals earning less than $125,000 annually, tied for third-lowest in general corporate income tax rates among provinces and the second-lowest small business tax rate among provinces. Not only that, but we’ve taken a number of measures that in fact have continued to help with competitiveness. Businesses made it very clear they wanted to move on the PST on electricity. We cut it by 50 percent. There’ll be another 50 percent coming, which will eliminate PST completely on electricity, which, again, makes a big difference for businesses.

We’ve acted on two of the biggest areas the businesses raised for us, around recruitment and retention. As people may know, again, when I talked about the competitive tax environment in British Columbia, we also have a very competitive labour market, best employment in the country. We are a province that is doing very well when it comes to employment.

What we hear from business is that they’re facing some real challenges when it comes to recruitment and retention. In addition to, as I talked about, the PST cut on electricity, the small business tax rate, competitive rates on our other taxes, we have also acted with major investments in two of the areas that businesses have said are critical to their recruitment and retention, and those are housing and child care. When we talk about business competitiveness related to the employers health tax, we in fact are investing over $500 million when it comes to business supports in this province.

Then the other piece, of course, is the issue of employment and skills training. Again, when you take a look at the environment that employers are facing in British Columbia, where everybody is competing for employees, putting in place new post-secondary spaces, putting in place further training, makes a huge difference to recruitment and retention.

All of that translates into providing B.C. with one of the strongest economies in Canada. Again, our GDP is estimated to grow by 2.4 percent in 2018, which is the highest among provinces and higher than the national average. We continue, as I mentioned already, to have the lowest unemployment rate, and wages are going up. It’s another interesting piece.

If you take a look at statistics, wages, after a great many years of stagnation…. In fact, in this last year, you see wages increasing and finally going up, which, again, is a very positive sign around a well-rounded, sustainable economic plan — and very positive signs, obviously, for people who’ve really been struggling with affordability issues and positive signs, as well, for businesses that have been unable to attract and recruit workers because of our affordability crisis.

Getting rid of MSP means more people have money in their pockets to spend in their communities, which again, as I’ve mentioned, supports local businesses and the economy. It also means that we can continue to deliver the services that people rely on — services that, as I mentioned, add to business competitiveness — to be able to ensure that we keep people here.

I think the important piece of building a sustainable economy is ensuring that the people of British Columbia benefit from that strength in the economy and that we invest in the people to help continue to build that strong economy.

Whether we’re talking about our education system — training the next round of entrepreneurs or engineers or nurses — whether we’re talking about a well-funded health care system that supports people when they’re sick or whether we’re talking about the infrastructure that’s needed to build a strong economy — roads, bridges, transportation systems getting people where they go — those are all part of the importance of the resources that will come in, as I said, through the employers health tax.

Just to go through a couple of details on the specifics of the employers health tax. This will be, I’m proud to say, tied for the lowest payroll tax rate in the country, modelled very much on Ontario’s approach. The tax design protects small businesses, which really are the cornerstone and key to a sustainable economy in British Columbia. Very similar to other provinces, charities and not-for-profit organizations will benefit from a higher exemption amount, and charities and not-for-profits with multiple locations will also be eligible for the exemption at each location.

This bill contains nine parts, and I’ll just run through those quickly. Part 1 of the bill sets out the definitions and interpretation rules for the act. These definitions set out who’s considered an employer, what’s considered a B.C. payroll for the B.C. payroll tax.

[1:45 p.m.]

Part 2 of the bill outlines the calculation of the tax. Just the basics: employers with payrolls under $500,000 will not be required to pay the tax; employers with B.C. payroll between $500,000 and $1.5 million will have the rate phased in. For people who are looking for examples, an employer with a payroll of $750,000 will have a tax rate of 0.98. An employer with a B.C. payroll of $1.25 million will have an effective tax rate of 1.76 percent. As you can see, it phases in. Then employers with a payroll greater than $1.5 million will pay the 1.95 percent of their total B.C. remuneration.

In order to preserve the integrity of the $500,000 exemption, employers that are part of a group of associated employers must share that exemption when determining their tax liability. To align with the treatment of non-associated employers, if the total B.C. payroll paid by a group of associated employers is greater than $1.5 million, then there’s no exemption to share among them.

Very similar to other provinces, as I said earlier, a specific tax treatment is also provided to charities and not-for-profit organizations. These organizations calculate their tax at each of their locations.

Again, locations with an annual payroll under $1.5 million are not subject to the tax. Locations with an annual payroll between $1.5 million and $4.5 million will see their tax rate phased in — very similar, as I said, to the earlier piece I identified. Locations with annual payrolls of greater than $4.5 million will pay the 1.95 percent on that location’s total payroll.

Part 3 establishes the rules to enable administration and enforcement of this tax. In particular, it sets out how taxes will be assessed and reassessed. It sets out the administrator’s power to undertake audits and the administrator penalties to enhance compliance. It outlines how interest will be charged on unpaid amounts, how overpayments will be refunded, and it includes a general anti-avoidance rule to limit taxpayers’ ability to exploit loopholes — again, very common language in a number of tax bills and very similar to provisions in other tax statutes.

Part 4 of the bill sets out the appeal process if a taxpayer disagrees with their tax assessment. Again, this is very similar. Many of the clauses you’ll see are mirrored on other tax provisions, other legislation.

Part 5 of this bill sets out the rules for collecting unpaid tax, including the actions the administrators may take in order to collect outstanding taxes — again, similar to collection provisions in other B.C. tax statutes.

Part 6 of the bill sets out a variety of administration rules. It talks about how documents can be received and sent, and it provides that the tax will be administered in-house by the B.C. government. It also creates rules about how taxpayer information can be used, which includes safeguards to ensure that information is kept in the highest confidence and that those pieces are taken care of.

Part 7 of the bill sets out the actions that can result in prosecution, as offences, including any related penalties if convicted of an offence.

Part 8 of the bill provides the ability for the Lieutenant-Governor-in-Council to make a variety or certain regulations that might be necessary for the operation of the act. Again, it’s very common in provincial legislation for certain matters, within limitations, to be dealt with through regulation.

Finally, part 9 of this bill sets out the regulatory-making ability and transition rules for the first year of the tax.

Our government continues to work to make life more affordable for British Columbians. I have to say that bringing forward this bill to eliminate medical services premiums, by transitioning to the employer health tax, is a key step that is going to return hundreds and hundreds of dollars back to the people of British Columbia.

Medical services premiums bills have been burdensome — burdensome for families, for businesses — and the administration has been very costly for government.

Again, I think it says everything when many of our constituency offices had a line to call for constituents who couldn’t get through to medical services premiums offices to try and deal with their plan and the challenges they faced. For employees who would have their Medical Services Plan premiums paid with one employer, then move to another employer where they weren’t paid, the nightmare of trying to deal with the administration of that, to ensure that the medical services premiums plan people were up to date on what was going on with those premiums — it was a nightmare for people.

[1:50 p.m.]

I know seniors who were in tears in offices, talking about the collections office that was coming after them because a mistake had been made in the collection of their Medical Services Plan premiums.

I think another positive part of bringing forward this legislation is that we will eliminate that inefficient system. Remember, a regressive system. Whether you made $50,000 or $500,000, you paid the same amount. But also, as I said, a very inefficient system. Right now it costs more than $50 million to administer the Medical Service Plan premium system. When the system for the employer health tax is up and running, it’s going to cost $2 million to administer. Just those savings alone make a huge difference.

Today I’m very proud to speak to second reading and to announce once again that in one more year there will be no MSP bills taking money out of people’s pockets and no regressive fee for the universal health care system, which really is a cornerstone for our country. To be able to put money back into the B.C. economy…. As I mentioned, we’re not bringing in as much as was being taken by the Medical Service Plan premiums. Making life more affordable for the people in British Columbia is a major mandate in our government and something I’m very proud of.

B. Ma: I seek leave to make an introduction.

Leave granted.

Introductions by Members

B. Ma: I’d like to inform the House that we have 34 students from Bodwell High School with us here today with their teachers Mr. Chris Macintosh and Ms. Kathryn Stewart. Bodwell is an international high school in North Vancouver. Would the House please join me in making them all feel very welcome.

Debate Continued

S. Bond: I very much appreciate the opportunity to stand in the House today. Certainly, we’ve done that over the course of the last few days. I guess I want to begin my comments…. It will sound eerily familiar to people in the House, because we find ourselves in exactly the same position that we were the last time I stood up to speak about a tax issue in British Columbia.

We fully expected this afternoon to be continuing the debate on a very significant issue that’s happening in British Columbia. As we speak, envelopes are arriving in people’s mailboxes across this province. I can tell you that there is confusion. There is concern. People have found abandoned envelopes. People don’t know how to fill out those ballots.

This afternoon we should actually be continuing the debate on what is basically the future of the electoral system in British Columbia. Much has been said in this place. Certainly, the members of the Green Party and members of the opposition talk about how much different it would be if we could just collaborate.

Well, this afternoon, once again…. I think it probably had something to do with the rousing speech from the member for Surrey-Cloverdale just prior to lunch. The fact of the matter is we call emergency debates all the time. We had one on climate change. Well, I would like to suggest to the members opposite that we probably have an emergency happening in British Columbia as we speak. This afternoon, instead of continuing the debate on ensuring that British Columbians actually know what they’re voting on and how….

I can’t imagine that members on the other side of the House haven’t been getting the calls and the emails that I have. “Help me. What do I do? Do I mail it? What do I do?” That, in and of itself, is an indictment of how poorly this process has been designed.

Okay. No Bill 40 this afternoon, despite the fact that it’s probably the number one issue on people’s minds this afternoon. But let’s cast our minds back to the last time we had a discussion about taxes in this House. Just prior — once again, a chance for collaboration and awareness and conversation — we get a news conference in the rose garden about some tweaks to the other piece of tax legislation that British Columbians have been forced to deal with.

At that time, we were informed by the leader of the Green Party and the Minister of Finance that, lo and behold, they’d come to an agreement, and there were going to be tweaks and changes. There were going to be amendments.

[1:55 p.m.]

Just so British Columbians know, since that time, not one word has been shared with the Finance critics — my colleague and me. We have no idea what those amendments will look like. We have no idea how that will be changed here on the floor of the Legislature. So let’s be clear. While there’s an opportunity….

The argument continually on the other side of the House is about: “You know what? We need a different system to be collaborative.” I have news for the members. There is every opportunity to do that now. But that’s not what we see day after day.

This afternoon I want to make some remarks about the employer health tax, though my heart is actually very concerned about what British Columbians have been asked to do by this government in terms of electoral reform. It’s fine to stand in this House, stand up and talk about: “Oh yes, change is necessary.” Yet not one member on the other side of the House will stand up and tell British Columbians which model they prefer. Just pick any one of them. Just pick any one. Is that fair?

Having said that, I digress.

One of the things that’s been very obvious…. I always preface my remarks, because there are people who get uncomfortable in this place when tough questions are asked. Maybe the tone is a bit more edgy than people would like, but policy decisions matter.

I always preface my remarks about the Minister of Finance personally. I have a great deal of regard for her personally, but that doesn’t mean that I don’t get to come to this place on behalf of British Columbians who are impacted by the policies of this government and ask tough questions. That’s exactly what we intend to do.

Let me outline for the minister and for the government the pattern that has been set by the members on the government bench. Here’s what happens. The budget comes down. Announcements are made. There’s a huge backlash. People react. “Whoa, I wasn’t listened to. I wasn’t consulted. That’s a mess. This is a mistake.”

Then what happens? There’s a fix, a tweak, a change — just enough to sort of make some adjustments. Then what happens? The government plows ahead. This isn’t the first time we’ve seen that, with the employer health tax, because as the Finance Minister…. It is her job to do this, to stand up and sell the virtues of her tax policy.

There is another part to the story. There is another side to this story that is completely ignored and rebuffed by this government and by the Finance Minister. We’re going to talk a little bit about that today.

But announce, cause a big reaction, get people all upset and worried, and then: “Maybe we’ll tweak it a little bit, but we’re going to plow on.” All we have to do is look at other things that we’ve discussed in this House: a speculation tax that does not target speculators; it targets British Columbians. The minister and her team can call it a speculation tax all they want. I and my colleagues do not consider hard-working, taxpaying British Columbians speculators.

We’ll get to that bill, because, heaven knows, the next time Bill 40 is up, when we want to talk about proportional representation, I’m sure that somehow, some other bill will appear. We also have an education tax that really little has very little to do with education. It’s all in the title.

So the employer health tax. I want to spend a couple of minutes talking about something else that’s emerged over the last number of months since this government has been on that side of the House. The government has underway, currently, dozens and dozens of consultations, task forces. “Let’s get advice. Let’s find out what people think.” Then guess what happens. They don’t take the advice that’s been given to them. What on earth would give me licence to say that? Well, we’re about to walk through what happened with this particular tax.

[2:00 p.m.]

I want to recognize that I don’t disagree with the Minister of Finance. I don’t think anyone on this side disagrees. I don’t even think the Green Party disagrees with the fact that the MSP was a regressive tax. For the Minister of Finance to suggest that the government is the only group that actually wanted to deal with that is just simply not true.

She also spoke passionately and in a very caring way about low-income British Columbians who were impacted by the MSP premiums. She forgot to mention that many, many low-income British Columbians didn’t pay MSP premiums. And that’s the right thing. There’s the other side of the story.

What did we say about eliminating MSP premiums? We didn’t disagree, but here’s the approach we took. We said we were going to reduce MSP premiums by half and then eliminate them completely when we could pay for that to happen. I’m sure the Green Party had something in their platform. Certainly the government did as well.

Not anyone in this House said we shouldn’t eliminate MSP premiums, but boy, did the path to getting there differ. This Finance Minister, instead of figuring out how we pay for this in a reasonable way, decided to do something that surprised people. She basically sandbagged employers across British Columbia. “Guess what. The budget’s tabled. We’re going to get rid of MSP premiums. Oh, and by the way, you employers and business owners across British Columbia are on the hook for that lost revenue.”

If that wasn’t good enough, not only were we going to start and begin to collect the employer health tax. “By the way, you’re still going to be paying half your MSP premiums for a year.” The minister has tried to find a way to dance and juggle her way around that. It is a fact. The minister thought it was acceptable to double-dip. I can assure you, we never once contemplated, on our side of the House…. Yes, we wanted to eliminate MSP premiums too, but we wanted to do it in a reasonable and appropriate approach, not double-dipping on the very people who are job-creators in British Columbia.

In fact, the decision has been described by those very people impacted as a “double whammy.” During the transition period, while MSP premiums are being reduced by 50 percent, many businesses will have to continue paying MSP premiums, albeit at 50 percent of the previous rate, and the new employer health tax.

I thought it was really interesting. In the minister’s opening comments, she talked about: “Let’s ensure that in British Columbia, we have a fair tax regime.” Well, I don’t know about you, but I can’t think that there are very many employers in British Columbia today who think it’s fair that for an entire year, they will not only pay half of the MSP premium rates; they will pay the new employer health tax. I don’t know whose definition of fair that fits in, but it’s certainly not our side of the House.

What the Finance Minister has done is actually transfer a substantial portion of the cost of the health care system from individuals and employers that participate voluntarily. She’s transferred it squarely to small, medium and larger businesses in our province, all the while talking about the affordability agenda.

What’s missing is the connection between adding additional tax burdens to job creators in British Columbia, to small and medium-sized enterprises…. Who on earth does the Finance Minister think is going to end up paying for those additional tax increases? All the taxpayers of British Columbia. Whether it’s in service fees, whether it’s in extra property taxes, someone has to pay.

[2:05 p.m.]

That’s the disappointing part of the discussion around the employer health tax in this chamber and beyond by the Finance Minister and her colleagues. “It’s simple. Just send it over to employers and businesses in British Columbia. Don’t worry. There’ll be no impact.” Of course there will be an impact. But what’s most disappointing?

I think asking for advice is a pretty good thing. So, I admit, I thought: “Good idea.” The Finance Minister appointed an MSP Task Force. In fact, in November of 2017, she asked for advice on how and when to eliminate MSP premiums and replace significant forgone revenue from MSP premiums. She appointed some very impressive British Columbians: Dr. Lindsay Tedds, David Duff and someone who I happen to know very well because he was an MLA in my part of British Columbia, a cabinet minister, a person who worked very hard on behalf of his constituents.

I admit it was an interesting time, because he was the Minister of Education and I was the school board chair. Then when circumstances changed, I became the Minister of Education and he was on the other side, critiquing everything I did. It’s interesting how those things happen. That was Paul Ramsey. He served as an MLA for many years in my region of the province.

So what happened? On February 1, a written interim report was provided to the Finance Minister with some initial advice. I can assure you the task force worked hard and in good faith to do exactly what they were asked to do. Let’s talk a little bit about what they were asked to do.

This is relevant, because this is exactly the pattern that’s emerged. Whether it’s the Small Business Task Force, who, by the way, wrote a report…. The advice was going to be provided back to the Minister of Jobs before Small Business Week, and indeed it was. But what did we see? Nothing.

The only thing small businesses had to celebrate during Small Business Week was the fact that they were being hit by tax after tax, increases to the minimum wage that they are going to struggle with trying to meet — all this coming from a minister who says that we have to have a fair tax regime in British Columbia. Why does that matter? I will speak to that in a moment.

I quote from the MSP Task Force report — actually, the cover letter that was sent back to the minister on February 1. Here’s what it says. “The MSP Task Force was charged with advising the Minister of Finance on how best to eliminate MSP premiums and replace the forgone revenue from premiums.” Well, they were asked to consult with citizens, businesses and interested parties and ensure they were provided with an opportunity to express their views and to consider how other provinces eliminated similar medical premiums.

Ironically, the minister stands in this House and talks about “we were the only province” and that all of those things needed to change. Wisely, in my view, she asked for help. She asked to talk to the people who were going to be impacted by whatever decision was made. “In developing our options,” the letter goes on to say, “we were asked to assess them according to the principles of” — imagine this — “fairness, efficiency, competitiveness, simplicity and revenue stability” and to ensure that there is “a more progressive tax system for British Columbians.”

You know what? Even I can agree with that. I think that makes good sense. So what happened when the recommendations came in? We go through, and the letter lays out in a comprehensive way “What We Heard,” “Initial Advice,” “Measures Under Consideration.”

Here’s what happened. Under the “What We Heard” category, on page 2, it says this: “The most striking theme that arose from consultations was a strong expectation that the MSP revenue would be replaced with a combination of personal income tax and payroll tax, similar to the approach taken by Ontario.” We have heard the minister stand in this House and laud the work done in other jurisdictions. In fact, that’s exactly what the letter said.

[2:10 p.m.]

Let’s go take a look at what happened in Ontario. It was a combination of measures that generated the forgone revenue. “While some opposed the use of a payroll tax, even they expected that a combination of income tax and payroll tax would ultimately be implemented by the government of British Columbia. Several groups, comprising a mix of labour, business and public policy groups recommended that the needed incremental revenue be split between personal income tax and payroll tax.” The letter goes on with some very, very specific comments.

After talking to all of those organizations, engaging in dialogue, trying to look at how you create good tax policy that isn’t going to impede economic growth, cause job loss, all of those things, what advice was the minister given?

Here’s what the letter said: “While we have not completed a detailed analysis of the available options or come to firm conclusions…we have three pieces of…advice. First, what­ever mechanisms are chosen to replace MSP revenue, we feel strongly” — not “we think,” not “we hope,” not “we wish,” but “we feel strongly” — “that there should not be any phase-in of the new measures and phase-out of MSP. Rather, we suggest MSP be eliminated at a specific date and that the new revenue measures take effect fully at the same time.” Pretty straightforward advice — make sure that one stops and one starts.

What did the Finance Minister do? She decided to double-dip. She decided that employers in British Columbia would be forced to pay 50 percent — I grant her — of the MSP premium rates and a brand-new employer health tax at exactly the same time. Advice given and ignored.

It just fits the pattern. If we look at the speculation tax, British Columbians across this province have some pretty tough questions for this Finance Minister. How on earth did communities get in and get out? Why isn’t there an opt-out clause? How were those decisions made?

We have no answers. People came. They provided their opinions. And the answer was: “Nope, not for you.” “You’re in, and you’re out.” “Oh, by the way, now you’re out, and you’re in.” That’s not how responsible and important tax policy should be determined in British Columbia.

This minister knows full well that when she announced the employer health tax, there was an enormous degree of upset, concern, frustration and outright fear, particularly on the parts of charities and non-profit organizations in British Columbia. Announce, cause a big reaction, tweak it, and then plow on. It’s exactly what’s happened with every piece of tax policy and financial legislation we’ve seen in this House and outside of these walls.

Let’s go back to the initial advice. “Second, we believe it is important that reasonable notice be given about when the change will take effect.” Well, there was notice, all right. The budget was introduced, and major organizations across British Columbia — boards of trade, the chamber of commerce…. I’m going to go down the list in a few minutes. All of them felt like they had been sandbagged. That’s exactly the word that they used.

How on earth does that provide for a working relationship where businesses small, medium and large are critical to the growth of the economy? The minister stood in the House and outlined the state of the economy in British Columbia. I, for one, know exactly what the state of the economy in British Columbia is, because our government took this province from have-not status to the top of the country — top job creation numbers, the strongest economy in Canada.

That is the economy we handed over to this Finance Minister, so I know the details inside and out, as we worked tirelessly every single day to support small businesses in this province, to make sure that the economic engine of British Columbia, small businesses, were supported with important and relevant policies that did not hinder their ability to grow and to hire people. But nope. Initial advice given, ignored.

[2:15 p.m.]

This is the last piece of initial advice. “Third, the amount of revenue to be replaced, approximately $1.3 billion” — and in probably the most understated sentence in the entire report, it goes on to say — “is a sizeable amount of money.” Yes, indeed it is. “Our analysis to date of the available options makes it clear that no one option is preferred based on the principles we were asked to use to assess the options against.”

Let’s just repeat that: no one option is preferred based on the principles. The minister provided the task force with a set of principles on which to assess the advice she was given, and the answer was that there’s not one preferred option. “All revenue options that have been identified represent trade-offs among the criteria, each having some positive and some negative implications. Therefore, we feel that it is important the revenue be replaced by a combination of measures in order to best mitigate the impacts of each.” Advice given and ignored.

On the final page of this letter…. The minister went on at length here this afternoon to talk about how businesses in British Columbia require a competitive tax regime. Of course they do. We are surrounded by jurisdictions that we need to be paying attention to, because every time we load up more expenses, taxes and regulations on small businesses, it impedes their ability to compete. Here’s the advice the minister was given about that: “A payroll tax would have the advantage of raising a portion of the revenue from all businesses, not just those that currently pay employees’ premiums voluntarily as an employee benefit.”

Let’s not just deal with the businesses that are voluntarily paying MSP. Let’s spread the pain out. Let’s make sure all the businesses have to pay a part of this. Here’s the key sentence for me: “A payroll tax would reduce the competiveness of B.C. businesses at a time when they are facing several competitiveness challenges, including expected increases to the minimum wage, CPP increases and recent tax reform in the United States which improve the competitive position of many U.S. businesses.” Let’s repeat that: a payroll tax would reduce the competitiveness of B.C. businesses.

I can assure you that as we go through committee stage, we will be asking the minister what kind of modelling she did to look at the impacts. Competitiveness matters. We live in a globally competitive economy. With a stroke of a pen and the signing off of a piece of legislation, this minister imposed costs on small, medium- and larger-sized businesses in British Columbia that her very own task force said would potentially hurt B.C. businesses.

Why does that concern us? Well, we hear from the other side all the time that all we care about is the top 1 percent. The minister knows full well what the definition of a small business is. It’s not megacorporations; it’s not giant companies. When you ask people who are part of that sector, the definition of a small business is 50 employees or less. That’s the vast majority of people who work hard every day and try to grow their business. If she doesn’t think that this employer health tax will have an impact on those businesses, that would be wrong.

Every…. I shouldn’t say every; that would be unfair. The majority of organizations that represent small businesses in British Columbia — and medium-sized and larger ones — have made it clear to this minister that this tax is a problem for them. Just like we’ve seen in the case of the spec tax, in the case of the Small Business Task Force, it doesn’t matter. We’re going to announce, cause a big fuss, get people upset, tweak and then plow ahead.

Interestingly enough, we’ve got a handpicked task force that comes back with advice. The funniest part of this whole thing, although it isn’t amusing…. When we look at the report that was finally provided to the minister, the MSP tax reform proposals, which were provided in March of 2018…. I love the way this was characterized.

[2:20 p.m.]

I think the people on the task force — I have to admit, I can’t imagine how disappointed they were — actually handled it remarkably well. Here’s the paragraph:

“In Budget 2018, the Minister of Finance announced that MSP premiums would be eliminated effective January 1, 2020, and that a payroll tax, the employer health tax, would take effect January 1, 2019, one year prior to the phase-out of MSP premiums…. As a result…the purpose of the task force as set out in the terms of reference and the direction of the task force’s work outlined in the interim report was changed.”

Well, no doubt it was changed. They provided their initial response. They gave advice to the minister, and what did they do? They completely ignored it.

Imagine the surprise of the task force and everyone else in British Columbia when, in Budget 2018, delivered on February 20, the Finance Minister announced that MSP premiums would be eliminated effective January 1, 2020, and that the forgone revenue would be replaced with the employer health tax. The minister asks for advice. It comes back and says explicitly what she would be doing.

The Finance Minister and her government continue to perpetuate the myth that this new tax is about making life affordable. The fact is that the government has simply replaced MSP premiums with a payroll tax. To suggest that the impacts of that decision will not be felt by British Columbians is simply not accurate. The tax will have an impact. The tax will drive up costs across the province for customers, for taxpayers and for businesses.

Deputy Speaker: Thank you, Member.

S. Bond: I’ll be the designated speaker.

British Columbians who were paying the MSP premiums themselves will no longer pay it, but many of those same taxpayers will pay a price as a result of this new surprise tax.

One of the most frustrating things about this tax is that the minister refuses to admit that she has downloaded the costs of the elimination of MSP. She has created a replacement tax. Again, it’s not about telling British Columbians the whole story. It’s the part that “we’ve eliminated MSP premiums,” and the next question is: yes, but who’s going to pay for it? British Columbians will pay, one way or another. Ultimately, the employer health tax will hurt families.

The first place this new tax is going to hit families is at the local government level. Municipalities across the province have expressed concerns about the extra costs the tax is adding to their bottom lines. There are estimated financial impacts that we have heard right across the province. In fact, it has the potential to cost the city of Vancouver $13 million a year. Surrey will have to fund $3.35 million; Richmond, $2.5 million; Abbotsford, $1.7 million; Kamloops, $700,000. The list goes on, the costs go up, and the argument about affordability is simply not credible.

The other thing we’ve come to recognize…. We’ve been carefully monitoring the impacts on the budget this government tabled. Every single time there is a tweak, a change, an amendment, where do people think that revenue is going to come from? How does anyone think that we can continue to have a credible, balanced budget when there are constant tweaks, changes? Maps are drawn differently. Boundaries are changed. Different people are exempt.

I’ll tell you. It is going to be a stretch for this Finance Minister, after all of the things that she’s announced, tweaked, changed, to prove to British Columbians that they have a balanced budget. It is that serious.

[2:25 p.m.]

Every one of us here today knows exactly where the municipalities will, reluctantly, be forced to make up those shortfalls: the pockets of taxpayers. It can play out in a lot of ways. In a city, a regional district or a town council, it could be higher recreation fees. It could be higher property taxes. It could be higher costs added to new developments. But make no mistake about it. At the end of each and every one of those options, guess who’s standing there. It’s the taxpayer. That taxpayer is facing higher costs and life that is less affordable than the one they were promised by the members opposite.

There was an interesting article in the Vancouver Sun just at the end of August. I’m going to quote from it, because it’s important that members on the opposite side of the House actually hear how other elected organizations, other elected officials, feel about what this minister has done. “Lower Mainland municipalities are lobbying the province to make the transition from paying Medical Services Plan premiums to the new employer health tax…neutral for local governments…. ‘During the transition period, some local governments will likely be required to pay both MSP and EHT. The Lower Mainland Local Government Association would like the province to design a better transition.’”

That association represents local governments in Metro Vancouver and the Fraser Valley and Squamish-Lillooet regional districts, and it said in a resolution that will be heard at this year’s Union of B.C. Municipalities that in the absence of tax breaks provided to other sectors, the province should design the transition to the new tax to be cost-neutral.

Here’s what the Union of B.C. Municipalities member survey showed:

“More than 70 percent of the 77 municipalities that responded will see their costs go up, 36 percent said their increases will be between 25 and 100 percent, and 15 percent of those municipalities said the increases” — get this one — “will be greater than 100 percent. The transition year,” the note goes on, “of 2019, in which MSP premiums are retained while the EHT is phased in, will also create an extraordinary single-year increase in which MSP-related costs will more than quadruple for the respondents.”

Guess what the article goes on to say.

“Municipalities said they will have to cover the costs by raising property taxes or reducing services…. ‘There is a significant impact for local governments in having that on their tax roll now,’ said UBCM president Wendy Booth.”

I should point out that it’s not a geographically isolated issue, because Fort St. John put forward an almost identical resolution. Vernon has a resolution that asks specifically for the tax to be delayed until January 1, when the MSP has been completely phased out.

Here’s a really powerful statement. Rarely in local government do you hear anyone say this: “Everybody’s on the same wavelength.” Everybody but the Minister of Finance and the government of British Columbia realizes that the employer health tax is going to have a significant impact — not only on small, medium- and larger-sized businesses but also on municipalities right across British Columbia.

The minister and her government are wilfully ignoring the fact that driving up costs for employers is going to have one of two impacts. It will either drive up the price of the goods and services they offer, or it will lead them to reduce non-mandatory costs. Do you know what that translates to — non-mandatory costs? It means people. This tax has the very likely outcome that businesses in British Columbia will make decisions about how many staff they have, whether or not to hire new staff. Let’s face it, there are thresholds in place.

[2:30 p.m.]

While the minister might stand in the House and talk about the $500,000 threshold and imply that that is a high threshold, we should be clear about that. A small business is an employee group that is 50 people or less. It doesn’t take very many people working for an organization to reach the $500,000 threshold.

[L. Reid in the chair.]

Operating a business, no matter the size, is challenging enough without being surprised, sandbagged, by additional financial pressures and constantly changing fiscal policy. The minister has, to put it simply, downloaded new and significant costs on hard-working business owners and investors who work tirelessly to pay their staff, provide them benefits, build better futures for themselves, their staff and their communities.

It’s going to be hardest for those companies that have been helping their employees all along — those employers who have been paying the employee portion of MSP premiums. And let’s remember the double whammy that employers will be paying for 50 percent of MSP premiums and the new employer health tax in 2019. There has been an overwhelming reaction to that from business organizations, employers, all across the province. The minister just keeps avoiding that part of the discussion.

Let’s see what some of those organizations had to say. Well, the Greater Vancouver Board of Trade and the Independent Contractors and Businesses Association released an independent survey of business owners. According to their survey, small and medium-sized businesses will bear the brunt of the new employer health payroll tax. That survey was conducted not by the B.C. Liberal Party or the opposition but by Mustel Group, between March and April, right after the minister made an announcement.

Businesses with 50 employees are defined as small businesses. Those with payrolls of $500,000 or higher will be subject to the employer health payroll tax.

“Many of our members are established businesses who employ British Columbians in the Vancouver area and around the province, creating jobs and contributing to their communities. More than 60 percent of our respondents who are small businesses expect to pay the tax. Among the overall membership of our organizations, 75 percent of them” — you know, the minister wants to quote numbers; this is an independent survey conducted about who will be impacted — “say they have payrolls exceeding $500,000 and will be impacted by the tax.”

And 61 percent of their members with fewer than 50 employees will pay the tax; 36 percent of their member businesses with fewer than 50 employees presently pay MSP premiums. They will be double-taxed for one full year.

That’s one of the surveys that was conducted. Let’s hear what the Burnaby Board of Trade had to say. This is an interesting one because there’s an update right at the beginning of this article, and here’s what it says: “The Burnaby Board of Trade has presented our concerns and suggestions to all four Burnaby MLAs in person.”

Well, I’m wondering if those Burnaby MLAs who heard in person from the Burnaby Board of Trade actually got up, went down to the Finance Minister’s office and said: “My members, the people I represent, say no to your employer health tax.” I’m wondering if any of them stood up and said: “Nope. Burnaby doesn’t want your employer health tax.”

Let’s see what Burnaby actually did say. In fact, the Burnaby Board of Trade also said that they had contacted the Minister of Finance. Oh, and they presented their concerns in person to the Attorney General at a recent round table with the minister.

Well, that, apparently, had a lot of impact, because nothing changed. Direct presentations to the people who represent Burnaby, and nothing happened. “Nope. We’re listening, but we do nothing when we hear those things.”

[2:35 p.m.]

Let’s hear what the Burnaby Board of Trade said.

“The Burnaby Board of Trade does not support imposing the new employer health tax on businesses and not-for-profits. Businesses and not-for-profits were not expecting this new tax, and for some, it will be a significant new expense. Should the tax go ahead, the Burnaby Board of Trade is advocating for several changes to be included in the final regulations, legislation, to minimize any undue negative impacts of this tax.”

Then, to give credit to the Burnaby Board of Trade, they have laid out an excellent document that outlines all of the concerns that they shared directly with the MLAs from Burnaby, with the Attorney General and, apparently, the Finance Minister. And guess what tops the list. I’m sure you can imagine what it is — double taxation in 2019.

This minister didn’t stop with just announcing she was going to have an employer health tax. She decided that they would pay their MSP premiums, albeit only half of them, and a whole brand-new employer health tax for an entire year, and she stands in this House and tries to pretend that that will not have an impact.

Well, here’s what the Burnaby Board of Trade said:

“This tax has been framed as a way to fund the removal of Medical Services Plan premiums on individuals. However, while the tax comes into effect in 2019, MSP premiums will not be eliminated until January 1, 2020. Therefore, an organization which currently pays MSP premiums on behalf of its employees may be faced with paying both expenses for the 2019 year.”

What was the fix? They actually gave the minister a fix right here in this paper. They met with her in person, and the four Burnaby MLAs apparently heard the story: “Postpone implementing the tax until 2020 so it coincides with the removal of MSP premiums.” Oh, wait, let me think. That was exactly the initial advice that was provided by the handpicked task force that the minister had. So advice provided and ignored again.

Guess what the next item on the Burnaby Board of Trade list of concerns was. Exemption thresholds are low. “B.C. Budget 2018 says that the employer health tax will not apply to small business but provides exemptions for payrolls up to just” — not my word; their word, “just” — “$500,000.”

Do you know what that translates to, Madame Speaker? Eight or nine employees at the median salary. “Few would define” — again, not my words, the Burnaby Board of Trade — “ten or 11 employees” — and I love this because it’s in quotations — “as a ‘big business.’” Remember, the criticism we hear on a daily basis is that we over here are all about big business.

Well, apparently, big business to the Minister of Finance is anything over eight or ten employees. I can tell you this. In my community, the heart of my community and probably every MLA’s community in this House…. The heart of our communities is businesses with five or six or eight or ten. But in the minds of the government and the new employer health tax, a big business could be ten or 11 employees — as defined by the Burnaby Board of Trade, not by me.

Here’s how they characterize the threshold: “This low threshold means thousands….” Not a few, not a couple. We keep hearing about the percentage: “Oh, it’ll only impact this many.” Here’s what the Burnaby Board of Trade said: “This low threshold means thousands of true small businesses…will still have to pay this tax.”

The minister said that we were behind the times, that we needed to get rid of that regressive tax. Let’s go look at what everybody else is doing. Well, guess what the Burnaby Board of Trade pointed out. “In some provinces with similar health payroll taxes, the thresholds are set much higher.”

Now, I’m not arguing that we should have an employer health tax at all, because I actually supported the approach that we took, which we believed was prudent: get rid of half of the MSP premiums, and do the other half when we can afford to pay for it, instead of reaching in the pockets of job-creating businesses.

The thresholds are higher, $1.25 million in Manitoba and $1.2 million in Newfoundland, to allow greater exemptions for small businesses. So the fix? “Increase the payroll exemption threshold to allow for more true small businesses and small non-profit organizations to be exempt from the tax.”

[2:40 p.m.]

The Burnaby Board of Trade goes on with a number of other fixes. So I am really hopeful that the MLAs who were met with in person, who represent Burnaby, actually took the information, took the document, sat down and lobbied the Minister of Finance and said: “Nope, not for Burnaby. We don’t want it. Our businesses are going to be impacted, and you need to fix it.”

Let’s look at a couple of other organizations that had something to say. “For members with stores in British Columbia, the B.C. government releases parameters for the employer health tax.” Well, you can imagine…. This is from, obviously, people who deal with retail in British Columbia. And I can tell you. They aren’t happy with what’s happened either.

Here’s what the Retail Council has to say. Once again, straight over to the Minister of Health. “The RCC opposes the employer health tax. Our position is that health care services are more appropriately funded through a broad-based tax such as income tax. The payroll tax penalizes those who employ British Columbians over those who sell goods into B.C. from other jurisdictions. The Retail Council will continue to make the case with the B.C. government that the number of coincident and significant increases to payroll cost….” And here’s a pretty powerful statement. It’s not: “Oh, we just don’t like it,” or “Could you change it up?” Here’s what they say. It “jeopardizes economic growth, employment and…the health of independent retail stores.”

That’s a pretty serious statement about the impact of the employer health tax. And the list goes on, one after another. There continue to be organizations, people that simply said to the minister: “Not us.” You need to make sure that there are appropriate exemptions. You need to make sure that people and small businesses are not impacted by the tax. Raise the threshold. Get rid of the double-dipping.

Not, as I said, that we would for a moment support the employer health tax. But at least this minister heard a lot of advice from people who run businesses every day of their lives and try to figure out how they’re going to continue to hire new employees, to take good care of them, to grow the economy in British Columbia.

The minister stood up at the beginning and touted the economic record of British Columbia. As I said earlier, we know all about that. We know exactly how hard it was to bring British Columbia….

You know, it was one of the things that actually caused me to run in the first place. It was the fact that during the tenure of this government previously, they took British Columbia from first to worst in Canada. I could not tolerate that in this proud, incredible province. We were considered a have-not province, this incredible, beautiful British Columbia, heavily laden with resources.

In fact, what did it take? It took prudent tax policy. It took incredibly hard work by the people of British Columbia. The very businesses that this minister has hit with her employer health tax — higher minimum wages, speculation tax, you name it…. It took them years and years to dig themselves out of the hole.

The member opposite can sit and be smug about the past. I’ll just tell him this. Where I lived — where I live — in the end of the 1990s, the people in my community were turning off the lights, closing the doors and fleeing British Columbia because of the economic policies of this government.

I can tell the member opposite that British Columbians.…

Interjections.

Deputy Speaker: Minister.

S. Bond: The member sits and says it’s not true. That is nonsense, and he knows full well.

We went from first to worst in Canada. And you know what? We’re headed that way again. Every single time this minister comes up with a tax policy, somehow it impacts somebody, and she’s not prepared to talk about that with anyone. The only reason this minister is in the position that she is in…. She admitted it in her pre-budget comments. She inherited a gift, as Finance Minister. What did that mean? She inherited the top economy in Canada. The member who is scoffing on the other side just needs to go look up Stats Canada and see what the job numbers were.

[2:45 p.m.]

We are the top job producer. That’s because it took hard work on the very part of these businesses that this minister sandbagged with her employer health tax.

Here’s what Val Litwin of the B.C. Chamber of Commerce had to say. Here’s the title: “New Employer Health Tax Is Unhealthy for Business.”

“B.C. businesses aren’t being dramatic with their ‘startling cries’ over the new employer health tax” because it’s startling. “To be clear, the MSP was a regressive, outdated and cumbersome tax.”

They give the minister that. And as I said, all three parties in this House agreed with that and came up with a plan on how to deal with that.

“The EHT is simply too much for business, especially in conjunction with the loss of revenue-neutrality” — oh, we haven’t even talked about that one — “on the carbon tax…increases to the minimum wage, increases to Canada Pension Plan contributions and the corporate tax hike.”

Let’s just layer it on.

“At first blush,” the article goes on to say, “the $500,000 threshold for EHT exemption might sound fair. Government’s message is that the vast majority of businesses in B.C. are small and will, therefore, be exempt from this tax. In reality,” not a few, not a couple of hundred, but “tens of thousands of small businesses will be affected.

“Nelson Stowe in Fort St. John is a perfect example. His company, Ideal Office Solutions, sells and services business machines. He employs 21 people and, by every definition, is a small business owner. But because his payroll exceeds $500,000, the EHT will cost him $17,600 a year.”

That may be small change from the Finance Minister’s perspective, but to him, Nelson Stowe, it “represents roughly 50 percent of the cost for an additional full-time entry-level employee. Stowe says the new tax will force him to reconsider making his next hire.”

There are hundreds of Nelson Stowes in British Columbia, whether they’re in Fort St. John or Courtney or Quesnel or Comox. All across this province, small business owners like Nelson Stowe are going to be impacted by a tax that was a complete surprise to the business community in British Columbia.

The opposition has raised an ongoing litany of complaints and concerns about this tax. From the moment the minister announced her new payroll tax, it caused anger and concern across British Columbia. One of the biggest concerns related to the treatment of non-profits and charities under the proposed taxation regime. I can’t imagine that there is a single MLA in this House that didn’t immediately hear from dozens of organizations in their communities about the costs that this new tax would impose on them and the impacts that it would have on the people they serve. If the tax was imposed as announced, it would mean reduced services, fewer staff and program cuts. The list goes on. Ultimately, some of the most vulnerable people in our province would be hurt.

Yet the minister stood in this House day after day after day, when the opposition raised this issue and brought examples of non-profits and charities from all across British Columbia to the floor of this Legislature to say this is a problem. It is an ill-thought-out tax policy. And do you know what it did? I met with — and I know that my colleagues did and, I’m sure, members on the other side of the House did too — literally groups of people in non-profit organizations and charities, and they were afraid and upset. Why? Because they didn’t know how they were going to find the money it would take to pay an employer health tax. Their biggest concern was for the people they serve. I won’t forget those meetings in my office and others.

[2:50 p.m.]

All of that could have been avoided. So what did we have? An announcement, chaos, angry people, upset people, upset non-profits, upset charities. Why on earth didn’t the Finance Minister figure out before she made her announcement that those service providers were going to be concerned and worried about how they would continue to care for the most vulnerable?

We hear a lot from the members of the government benches about how important it is to make life affordable, to care, to provide services, yet: “Let’s just make an announcement, cause chaos.” Where was the homework? Where was the modelling? Believe me, we’re going to be asking those questions when we move into committee stage.

We asked dozens of questions on this side of the House. We pointed out the issues. We did that in the Legislature and beyond. The answer was: “Well, we’re thinking about it. We’re looking at it.” Kind of like the situation in the rose garden. “Yeah, we’re going to tweak it up. We’re going to change it. We’re going to back down on that promise that we’re going to fight the speculation tax.” I am looking forward, as is my co-critic, to figuring out exactly what those amendments are going to look like, because we’ve heard nothing since the announcement in the rose garden. I look forward to the spec tax.

The pressure paid off. Dozens of questions, dozens of examples about organizations small and large, charities, non-profits across British Columbia who were upset and worried because of this minister’s announcement. Well, guess what. That pressure paid off. Thank heaven because, when we finally see the bill, there is some mitigation to address the concerns that are reflected in this bill that was tabled. But the bottom line is this. It wasn’t necessary to upset those organizations, simply not necessary. Once again, policy on the fly, flip-flops, requiring changes — all of which have a fiscal implication.

That’s not all. There’s more. Municipalities. “You’re out. You figure it out. Pass it on in property taxes. Do whatever it takes, but you’re paying the EHT and, by the way, half of the MSP premiums for a year.” Taxpayers are on the other end of that decision.

What about school districts, universities, colleges and hospitals? All of them are facing increased costs. Basically, it’s take it out of one pocket and put it back in the other. Let’s see what the government did when it flip-flopped on that, because again: pressure, questions, concerns raised by members of the opposition, by our Education critic, by others.

Here’s what they said. Press release, July 4: “The transition to the EHT includes funding that ensures the public services will not be impacted.” Does it sound familiar to you? The speculation tax — people are in; they’re out. Nope. They’re going to be impacted. No, they’re not. Well, guess what. Now we’ve been told that this includes funding for colleges, teaching universities, research universities, community health and social service providers.

And I go on. “After full implementation, the net funding required for the public sector is estimated to be no more than $90 million annually.”

Well, they were in. Now they’re going to get an exemption. There’s some amount of money set aside. We have absolutely no idea whether that’s enough money or not. Once again, tax policy on the fly. There was an enormous backlash, pressure. There have been some accommodations — and for that, we are grateful, particularly on behalf of non-profits and charities — which members of this House raised day after day after day in the Legislature. So we’ve seen some changes.

The devil is in the details. Will all of those incremental costs be covered or only a portion of them? We have no idea. I’m not sure anyone has those answers, but we will certainly try to get more clarity during committee stage.

Communities, businesses, organizations across the prov­ince will be impacted by the employer health tax. And it has no credibility when the Finance Minister stands up, tells one side of the story and forgets to talk about the other side.

[2:55 p.m.]

Yes, MSP premiums are being eliminated. But that is happening by downloading those costs on the very people that hire British Columbians — people that create jobs, people that make sure that families have well-paying, family-supporting jobs. From our perspective, advice was provided and ignored. Issues have been raised across the province, not in one part of B.C. or another.

Employer after employer, organization after organization, has stood up and said to this Finance Minister: “This is not right. Fix it.” Just like organizations and communities are saying about the spec tax: “We want out.” For a minister that speaks about transparency and about a willingness to listen, there have been pretty deaf ears on the part of this government.

I can assure you that we had a plan to eliminate MSP premiums as well, but it didn’t involve downloading millions of dollars on the economic generators in British Columbia.

Madame Speaker, I very much appreciate the time to speak today. I can assure you that there will be a significant discussion and debate during committee stage, because British Columbians deserve to have their questions answered. When a handpicked task force comes back and says to the Finance Minister, “Whatever you do, don’t do it this way,” and that’s exactly what she does, I think it’s time for some answers to some of those tough questions.

I appreciate the opportunity to speak to the bill today.

A. Weaver: I rise to take my place in the debates on Bill 44, Budget Measures Implementation (Employer Health Tax) Act, 2018. This bill, as we have heard, is a bill that’s proposing to replace the moneys that were lost in eliminating the MSP premium by a payroll tax applied on employers.

The payroll tax would be at a rate of 1.95 percent for employers having a payroll submitted of over $1½ million. It would be nothing for a payroll below $500,000, and if the remuneration paid by the employer is greater than $500,000 but not greater than $1½ million, the tax to be paid would be 2.925 percent of the amount by which remuneration paid exceeds $500,000. The idea here is to bring the payroll tax in British Columbia to a level similar to…. I think it’s the second-lowest in the country.

Now, I’ve been working on this issue of MSP premiums for quite some time. I’d like to give a little bit of the history of this, but first, let me start off by saying that we, as a caucus, wholeheartedly endorse the elimination of MSP premiums. It’s something we campaigned on, something we’ve been working on for many years.

We would not have done it this way. We recognize that this is not the approach we would have taken. With that said, we understand government has chosen to do it this way. I’ll outline the process by which this is come to and ultimately…. In the two-part presentation, my colleague from Saanich North and the Islands will also speak a little bit about some of the impacts that we have to be careful of with respect to medium-sized business — not so much large business or small business but medium-sized business. I’ll cover much of the history and the rationale for this approach.

Let me say that I’ve spoken to numerous, numerous people on this issue. I have spoken to leaders within the business community. I’ve spoken to small business, intermediate business.

I know that for some large businesses, this is actually viewed as very positive. Those companies that right now have negotiated contracts such that they have to pay the MSP premium for their employees once those employees retire — typically much larger, huge firms that have negotiated that in collective agreements — are very pleased that the government is no longer requiring MSP premiums to be collected. In their case, they see this as no longer having to cover the retired people who used to work in their organization. At least, I’ve been told that by the people I’ve spoken to in that area.

[3:00 p.m.]

People in small business, despite some of the fearmongering that we hear, are largely unaffected. If your payroll is below $500,000, you aren’t affected. In fact, you benefit, because as individuals, you no longer have to pay the MSP premium.

It’s in the intermediate area that we have to be careful to ensure that what we don’t do in introducing this is affect the competitiveness of our medium-size industry and affect the ability of medium-size industry to grow in British Columbia. My colleague from Saanich North and the Islands will cover that in more detail.

I brought this issue to the Legislature back in 2015. It was an issue that was brought to me directly from a town hall I had in my riding with seniors — in the Monterey Centre, no less. The issue that was raised was the issue of health care premiums and how some of these seniors there were very concerned about the health care premium that they were paying, and how it was not a progressive form of payment. It was a very regressive, one-size-fits-all payment. In looking at this, I completely agreed.

Actually, if you go back, you’ll see that there was a Post-it I wrote on my MLA blog post on January 21, 2015, where I outlined some of the regressive natures of the health care premium and the way it’s one-size-fits-all — in essence, a form of a head tax. It’s essentially a one-size-fits-all approach that had an incredibly large bureaucracy associated with it. I outlined in this post some of the issues with respect to the debt that’s incurred. I pointed out, for example….

I knew examples of people who went away to college in another country or another jurisdiction. They might have worked for a few weeks before going there, and their employer might have paid their health care premium on their behalf. Then they went away somewhere, and they were no longer working at this place. They were just students working casual work. They came back, and MSP presented them with a massive bill for all the years they were away.

Retroactively, they were being required to pay for services that they’d never had access to, nor were they actually using, you know, in the case of students who went to Europe. In many of the European nations, the health care would be covered under the essential rules that govern health care — in Britain or France or other jurisdictions. So they didn’t need MSP, because they wouldn’t use it there.

They would come back after a couple of years away, and there would be the big bill. Now, of course, there were collection agencies starting to get involved. People were getting angry phone calls. This kind of very punitive approach was neither effective nor, in my view, managed well, in terms of requiring an administrative overhead.

Every single month British Columbians from north to south, east to west, were getting in their mail an MSP bill. It’s costing us a buck per letter to send out these bills every single month. I can’t even estimate what the cost for the mailouts would have been, but I would imagine it would be large. Every single month, people would open their bills, and they’d write their cheques. Some would forget, some would defer, debt would increase, and collection agencies would come about.

This was a very inefficient system, and inefficiency is something that we as a caucus believe is not in the best interest of good fiscal management and good fiscal policy.

I’m surprised that it has been in place for so long. In fact, a form of MSP premiums has been in place since the 1960s. So it’s not that the Liberals can claim any high road or, frankly, that previous NDP governments can claim any high road. Simply, since as long as I’ve basically been following what’s going on in British Columbia — I was a little kid before that — MSP premiums have been in place. They survived government after government after government as a regressive approach to funding health care.

It’s regressive because it does not reflect your ability to pay. In most of our taxation system, we tend to favour moving towards progressive systems. If I have the ability to pay more than perhaps you do, I pay a little bit more.

In speaking with many, many British Columbians over the last five years, I understand that there’s a willingness in British Columbia for people who have the ability to do so to pay a little bit more, because there’s a recognition that in a society like ours, it’s important that the difference between those who have and those who don’t have not get too large, because that leads to social instability, and social instability is not good for anyone.

It’s with quite great pleasure that I was, in the budget, listening to the fact that MSP premiums were going to be removed.

[3:05 p.m.]

We’ll come back to some of the history of that a little later.

I should say at this juncture that I am the designated speaker on this file. I won’t be too long, but I might perhaps run just slightly over the allocated 30 minutes. I can see the member for Peace River South was applauding that I said I wasn’t going to be too long. I promise that I won’t.

Coming back to 2015, there were a number of headlines going on in news media at the time, picking up our public call to eliminate MSP premiums and to make it into a progressive system as opposed to a regressive system. Pundits started writing. At that time, one of the headlines said: “Advice for the B.C. Finance Minister on MSP Premiums: Listen to the Green Party.” In there, we were given a lot of credit for leading the charge on eliminating MSP premiums. What it said, which I quite liked — and I’ll link to this as I put this on my website later — was as follows: “Perhaps the B.C. Green Party knows more about economics and tax policy than many give them credit for.”

Well, I would hope so, because the chair of our policy committee is a senior economist with more than 30 years of experience in the B.C. government. We have an economic adviser team that is second to none, and we look forward to continuing providing critique on economic plans brought to this Legislature from an evidence-based point of view.

On February 26, 2015, again, I wrote a piece in my blog highlighting a petition I tabled here in the Legislature on February 23. That petition was 6,662 British Columbians calling on the government to replace the regressive MSP premium poll tax with a fair and equitable option to fund health care services.

On February 26 in the Legislature, I was up during question period. I used the opportunity to ask the, at that time, Minister of Finance whether or not he would empower the Select Standing Committee on Health to examine innovative and progressive ways of revising how MSP premiums are charged in British Columbia. The minister actually responded that, in fact, it was within their existing mandate to do just that. So on April 13 of that year, I wrote a letter to the select standing committee, seeing whether that committee would be willing to actually consider exploring, as part of its mandate — it was a sitting committee — innovative ways of reducing the MSP premiums.

I got a letter back from the select standing committee that said that they were not willing to consider that at that time. That’s most disappointing. That was in May of 2015. The response, to say the least, was disappointing. The chair of the committee stated: “They consider only those matters that are referred to them by the Legislative Assembly.”

Given the minister’s response, it didn’t make any sense to me that the minister said it is within their mandate to do this and then the chair of the committee says that it’s not in their mandate to do this because they haven’t been given a mandate.

Well, I was somewhat perplexed as to that. In fact, I was very troubled by the fact that the chair, in the letter that I received, said: “The committee is currently working to identify potential strategies to ensure the sustainability and improvement of our health care system, while ensuring its financial sustainability.” How on earth could the committee be looking at that and not be considering innovative ways of replacing MSP with other forms of taxation?

I think the B.C. Liberals missed the boat on the MSP premium. This was an issue that was very, very dear to the hearts of most British Columbians. They couldn’t understand why we continued to have this regressive system — the only province to do such a regressive approach. A one-size-fits-all tax, whether you’re literally earning…. Well, it changed a little bit with time. But back in 2015, if you’re earning $33,000 a year or $33 million a year, you pay the same amount. That’s not fair. I think British Columbians recognized that that wasn’t fair.

At the time, what we proposed and what we campaigned on was not what governments introduced. We proposed following along the lines of what Ontario does, which was to introduce something called a health care premium. That health care premium would have been progressive. It would have been collected like EI, collected like CPP.

But there would be another thing called a health care premium that, in negotiated contracts with unions and employers, you might have had your employer pay. That amount would be a progressive amount. In Ontario, if you earned under $20,000, you pay nothing a year. If you earned over, I think, $200,900 or something like that, you pay $900 a year.

[3:10 p.m.]

This was a system we proposed to do here, because in talking to British Columbians, people earning hundreds of thousands of dollars a year don’t mind paying a little bit more for health care than those who are struggling to make ends meet. It’s patently unfair that someone struggling to pay the bills at the end of the week to keep their children in child care, to actually ensure that they have clothes, is paying an amount similar to somebody who has literally bought a Lamborghini on Monday and flies to Paris for a dinner on Tuesday.

This was unfair, and British Columbians across our province believe that to be so. I’ll come to some evidence for that in a second in another petition that was brought to the Legislature by me.

In addition, one of the things we argued at the time in 2015 is that British Columbia really has not advocated effectively to Canada in terms of the Canada health transfer. Right now we are getting between $200 million and $300 million a year less than we should be getting in the Canada health transfer. The reason why is that Canada health transfer is simply based on how many people are in your province.

Now, we know, if you look at the demographics of British Columbia, that our province is older on average than most other provinces. We know a lot of British Columbians — for example, younger British Columbians, historically; now they’re working at home — would go to places like northern Alberta, work there and then come back here and retire. We know, for example, that when people are working in a jurisdiction like Alberta or Manitoba or Ontario, they’re working and paying taxes there, and they retire here.

We also know that the amount that you cost the health care system — another way of phrasing it is the amount that is spent on you as an individual in the health care system — is a direct function of how old you are in that…. Well, it’s not a direct function. That’s actually mathematically incorrect. It’s more like it’s exponentially related to how close you are to your final years. You spend a little more than average when you’re very young, and then you spend very little on health care here in British Columbia per person. But the tail of that is very, very high.

The most we spend on people in health care is in the last years of their lives. Yet we know British Columbians across our province come here from other provinces. They’ve worked elsewhere, but we are the most beautiful place to live in. With respect to my family who live in Winnipeg, who wants to live in Winnipeg in your retirement, with minus-30-degree weather and mosquitoes in the summer, when you can live a block from Beacon Hill Park? There’s a reason why people come and retire here.

But the money for health care does not follow them, so what we’ve been pushing for is government to actively advocate at the national level to ensure that the Canada health transfer reflects the actual real expenses on medicare that are age-related. It’s a very legitimate argument. We know people pay taxes elsewhere, and they use their health care in another place.

I hope this present government will pick that up, and the Health Minister will continue to do that. I will give credit to the former minister, Terry Lake, who initially did make some steps in this regard, but I don’t think enough has happened.

Coming back to the MSP premium, in January of 2016, the B.C. Business in Vancouver, a magazine that is very much focused on the economy, what’s good for business in British Columbia, had an article. The headline of the article was this: “If the B.C. Liberals Really Want to Cut Red Tape, They Should Chop MSP.”

This was around the time that we were celebrating the soon-to-be-forgotten Red Tape Reduction Day — that legislation brought forward that created, along with Douglas Day, Family Day, Terry Fox Day and Holocaust Memorial Day…. There’s one more that I forget. We’ve now got Red Tape Reduction Day.

This article was pointing out that we, as the B.C. Green Party, were promising to reform MSP as one of the first things we’d do. Again, I outlined the means and ways we would have done it were we given the situation to have a majority in this Legislature, which clearly we don’t since there’s just three of us here. But we still are very supportive of the elimination of this regressive tax.

On January 7, 2016, we issued, as a party, another renewed call to eliminate MSP premiums. At the time, I pointed out that the tax is applied to anyone living in B.C. for six months or longer and requires them to pay monthly premiums for health care coverage. While some individuals can apply for premium assistance, these subsidies soon dry up, as soon as a person’s income reaches $30,000.

[3:15 p.m.]

Back in 2000, I pointed out that the MSP premium for a single individual was $36 a month, and today — today being January 7, 2016 — the same individual paid more than twice that, at $75 a month. Just since 2010, there had been a 40 percent increase for a family of three. The new rate on January 1, 2016, was $150 a month, up from $142 the previous year.

It was very clear to people following the budgets brought in by the previous Liberals that, at least over the last half-dozen years or so, MSP premiums were viewed as an indirect way of taxation without actually increasing personal income taxes. What was so regressive about that whole approach was that the taxation was precisely that: regressive. Picking on people who are making ends meet is not something British Columbians supported.

It was reflected in, I think, some of the minds of people, going to that decision on ballot-box day, as to who they voted for. They felt it was important that this tax be eliminated. It was campaigned on and promised by both the B.C. NDP and the B.C. Greens. The B.C. Liberals had campaigned on it. And they did. They reduced it by 50 percent, and the NDP kept that in place. So credit to the B.C. Liberals on that. However, it was clear that this is something that British Columbians wanted to be dealt with sooner than later.

On February 11, 2016, in this Legislature, I had the distinct honour of presenting a petition that had been put together by a woman named Michelle Coulter from Ucluelet that had 65,721 signatures on it. That’s an awful lot of British Columbians. They were calling again on the B.C. government to abolish the regressive approach to collecting MSP premiums. As the petition was stated, it said B.C. should follow the lead of other provinces in eliminating its flat-rate MSP premiums.

Even in February of 2016, in the throne speech, the B.C. NDP at the time suggested an amendment to that throne speech. We were debating the amendment, which was the B.C. NDP adding the following words, “That the government recognize the cumulative effect of the increases in MSP taxes, hydro rates, ICBC premiums and other fees and hidden taxes, on British Columbia families.” Those words were added after…. It says that we asked the Speaker to now leave the chair for the House go into the Committee of Supply. I guess that would have been the budget, amending the budgetary speech.

I supported their amendment but added a second subamendment at the time. One of the things I added was…. I was grateful to the B.C. NDP, who supported this subamendment, which was to say to add on to that “And in order to ease the burden facing these families, support rolling the currently regressive and unfair MSP premiums into the income tax system in a revenue-neutral manner to create a progressive health care levy.” That was the amendment, supported by the B.C. NDP.

It’s not what they’ve done. They have taken it to the payroll tax. Again, our approach was to do the health care levy, which would have gone in the income tax system, as I outlined earlier. Again, I would have suggested that it was…. I was surprised, actually, given the two parties that are currently sitting on this side of the aisle — although one of them is in government and one’s in opposition.

The now opposition didn’t listen to the people of British Columbia, who were really calling out for this. This was a no-brainer — good, important piece of public policy, to go after a regressive tax that’s mired in red tape, because of the collection aspects of it, that was disliked by all and sundry, that was more efficient to get rid of. I cannot understand why the B.C. Liberals did not campaign on eliminating this regressive tax. Frankly, I think it was a strategic error on their part.

I look forward to them supporting this now, to say that, in fact, maybe this isn’t how they would have done it either. This is not the way I would have done it. This is not the way they would have done it.

[3:20 p.m.]

I tell you, if government’s going to eliminate MSP premiums, we have to weigh out the benefits of elimination with the negative aspects of what they’re doing to get the revenue. On the balance of things, I cannot disagree with government that the benefit of eliminating this regressive taxation outweighs the negative effects. There are real negative effects with medium-size business.

That is something that I can support, and I hope the mem­bers opposite support it, not just say no for the sake of it but recognize that what they’re doing here in supporting this bill is supporting British Columbians — people, regular people, people who are paying every single month, the payment, whether they can afford to or not. They have an opportunity here in the House to stand up and support this legislation, and I certainly hope that they do. Even though I recognize, as they probably do, that this is not how I would have done it.

In 2017, governments changed, and the B.C. government announced that it was establishing an MSP task force. The mandate of the task force was to provide government with advice on how to replace lost revenue when MSP premiums were eliminated. The task force issued its final report on March 31, 2018. The problem with that is, in the February budget, instead of waiting for the MSP Task Force recommendations, the minister outlined exactly how it was going to replace the tax.

Now, I understand it’s difficult in budgetary discussions. You can’t start consulting widely and having leaks about what you’re exploring. And I understand that government vowed to eliminate MSP premiums right at the get-go. And I understand that if you’re going to do that, you have to find where the lost billions of dollars are going to come from.

What I don’t understand is why government would have created a committee just for the sake of it, and then had it go through a process, when it had already decided what had been done. I think that’s most unfortunate, because some of the recommendations of that committee are things I can get behind.

Tax on sugary drinks — there’s a health cost. That’s about taxing behaviour that you think that might have a cost with it. There’s a health cost to our society from a preponderance of sugary drinks being drunk, and a little tax on that might have been something that government could have got behind, if it listened to its task force.

A small employer payroll tax might have been part of a package — well, it was part of a package — recommended by the committee, smaller than is done here. Perhaps some personal responsibility as well. A small adjustment in terms of either through a levy or an income tax rate could have been done.

As I said, I still haven’t really got a satisfactory understanding as to why the Minister of Finance would’ve rushed into doing this or would’ve struck the committee beforehand and, essentially, moved forward without listening or waiting until the report was done.

We have comments directly in the MSP Task Force report that say this: “A payroll tax would reduce the competitiveness of B.C. businesses at a time when they are facing several competitiveness challenges….” The report also said this: “We feel that it is important that revenue be replaced by a combination of measures in order to best mitigate the negative impacts of each.”

As I said, the only conclusion one can reach is that the Minister of Finance either read the MSP Task Force interim report but chose to ignore its key recommendations, or rendered her decision to implement the employers health tax prior to the interim report actually being available. I suspect it’s more of the latter, in light of the fact that budget deliberations are often done in the fall and must be done in a confidential environment. Still, it’s most unfortunate.

On May 17, 2018, I stood again and rose and asked a question on medical service premiums. I asked again about the savings the province was going to realize as a direct consequence of eliminating MSP, and the answer I got from the minister at the time was that it looked like it would save about $175 million annually. So that’s a good thing.

In eliminating MSP premiums, we often get focused on the costs, and we often tend to ignore the savings. Well, maybe we can celebrate this, this year, on Red Tape Reduction Day. That savings of $175 million is a very real savings in red-tape bureaucracy inefficiency — good conservative fiscal economics.

[3:25 p.m.]

It’s a real savings of having to mail out monthly bills. It’s a real savings of no longer requiring collection agencies to chase after past debt. Although, I’m still unsure as to what government’s going to do about the existing debt from unpaid bills. That might be something to explore at committee stage in this debate.

Coming back to the support of this bill. We are faced with the following challenge. This is not how we would’ve done it. We understand that government is moving forward and piling all of the costs on a payroll tax. We unequivocally support the elimination of MSP premiums by replacing a regressive into a progressive form of taxation.

What we would rather have seen, as I mentioned earlier, is one that attached a bit of personal responsibility in there, a health care levy along the lines of what was done in Ontario, one that had a progressive amount attached to an individual’s ability to pay.

That’s not there, but we are but three MLAs in this Legislature, with government on one side and official opposition on the other. In each and every decision we make, we must render an analysis of the benefits of going with or the costs of going against.

As I outlined earlier, the benefits of eliminating this form of regressive taxation outweigh the costs that are going to occur or the problems that will arise by piling that on to a payroll tax. In essence, that payroll tax isn’t going to go…. It’s still going to be the second-lowest in the country, and my colleague from Saanich North and the Islands will explore that a bit further in the next debate.

We did that balance, and I really, sincerely hope, for once, that members opposite in the official opposition stand back and ask the same question. On balance, if you put a scale there…. We recognize this wouldn’t be how you’d do it. It’s not how we’d do it. Do you really think it is better to eliminate the bureaucracy and red tape of this inefficient tax, this regressive tax, one that piles on all British Columbians…? Do you think it’s really worse to actually…? Do you think it is better to eliminate that? Or do you think it is better to vote against this bill, recognizing that that tax will still be the same as it is?

It’s a soul-searching issue, and I really hope they do think about this. Think about this not from an “Oh, we’re going to try to score it with our friends” but from an actual governing sense — not just complaining and saying no for the sake of it.

Think about governance here. We are elected to govern in this province. We are elected to make tough decisions. Can they actually stand up and recognize that this isn’t the way they would do it, as we are? We recognize this is not the way we would’ve done it. But we’re going to support it, because, on balance, people in British Columbia are better off.

I don’t know that they can. This will be very telling in the debates ahead, whether, for once, we can actually have a debate in this Legislature that puts people first — people — in a fair manner that eliminates a regressive approach with one that is still progressive but not one that we would do.

Let’s see what happens over the next coming days. I sincerely hope government and opposition and the Third Party can stand united on this. I would love to stand there with the opposition and say: “No, neither of us would have done it this way, but we recognize it’s the right thing to do at this stage.”

B. Stewart: It gives me great honour to speak about something that, of course, has had a lot of attention since February 20, when the employer health tax was announced by the Minister of Finance.

I think that one of the things that I want to talk about is that this is really the NDP’s attempt at trying to make it look good that they’re saving British Columbians money by getting rid of MSP while simultaneously raising taxes through a replacement employer health tax.

[3:30 p.m.]

The NDP is pretending that this new tax is about making life more affordable for people. I think, on the surface, that probably is…. It’s obvious that people do like to have it. It’s obvious that people do like to have it. I know that in January, many people were surprised by the fact that their premiums were half of what they were the previous year. But I think that one of the things is that, in reality, this tax is going to cost people more — more for employers, more for school districts, more for charities, more for municipalities and many, many other groups that I haven’t mentioned.

Where does the cost of that come from? Currently — in the remarks that were made by the Finance Minister when she spoke about this, she talked about the fact that people were going to be relieved of this tax — how many British Columbians know that over two million British Columbians pay no MSP today because they’re seniors, because they’re low-income? The fact is that there have been exclusions with the current MSP system for a long, long time. The reality is that we’re ignoring the fact that those exemptions existed.

[R. Chouhan in the chair.]

I don’t disagree with the previous speaker in the fact that streamlining, finding that efficiency, is really important to making certain we maximize the value in terms of administrating government services. Especially, these added costs are…. It’s stated, many times over, that businesses are going to pay these additional costs, and it’s going to be big businesses. There are many statements about the size, that it’s not going to impact them very much. But I know that the numbers are staggering, even for big businesses. Under the employer health tax framework, everyone pays somehow.

I do want to congratulate the NDP on one thing. They borrowed a promise from our previous B.C. Liberal government and followed through with it. British Columbians who were paying MSP themselves will no longer pay it. We promised to eliminate MSP, and the NDP followed through on that promise. For that, we’re on the same page. Where we differ, now, is actually how we get there.

On this side of the House, we believe in the honest elimination. I think it’s fundamental that we see things very differently. The fact is we concluded our last fiscal year with a budget surplus of almost $2.8 billion. I’m looking at some of the math since then and the increase in expenditures in the provincial budget. This may be disputed, but it looks to me like we’re going to see an increase in spending, by the provincial government, of over $6.6 billion, a 14 percent increase. That’s a staggering amount. That’s a lot of money, a lot of tax, and it’s got to come from somewhere.

When I think about the employer health tax, I think about the fact that even if the MSP were being paid by the provincial government for all 30,000 employees or health care workers or all of the people that are on the front lines, the bottom line is that that is an increased cost to government. It’s a tax shift in the way.

The reality is, I think, that the people that are going to be, obviously, the most affected by this are the people that are somewhere between that $500,000 exemption — which, roughly based on British Columbians’ average wage today, just under $27 an hour — equates to about nine employees. People above that are going to be paying this, on the incremental basis of 1.95 percent, for up to $1½ million in payroll costs. Then, of course, it jumps up to almost 3 percent on the higher part.

I think it’s this idea of honest elimination. It’s far too respectful of taxpayers for the Finance Minister, though. Instead, it’s kind of a game, in the sense: “If you look over here, we’re going to take away this, and you’re not going to pay it anymore. That MSP premium is gone.”

I think the reality is we’re actually having to create the tax. We’re having to find more ways to get it. And it’s being distributed across such an enormous — all the public sector, the universities, the hospitals, the colleges…. Who’s paying for those, the colleges and universities? It’s the students, the users. They’re paying at least a third of the overall cost. Does that mean that their tuition is going to be frozen and that the other two-thirds is going to be covered by government and local taxpayers? I don’t know the answer to that.

[3:35 p.m.]

The government is adding taxes that are going to hurt families. The first place this new tax is going to hit families is at the local government level. We’ve talked a lot here, since the Legislature changed in July of 2017, about affordability of housing. One of the things is that with housing comes the cost of ownership — the cost of having to make certain you pay your municipal costs. Now, no doubt, there’s a litany of other taxes — recent tax increases in the Lower Mainland for transportation — but the reality is that this one, for municipalities, is going to add up.

The amount for the city of Vancouver is $13 million a year that they’ve got to get out of the pockets of their taxpayers. Surrey is going to have to come up with $3.35 million; Richmond, $2½ million; Abbotsford, $1.7 million; Kamloops, $700,000; Coquitlam $600,000; and the city of Cranbrook, on the far side of the East Kootenays, $240,000, just in 2020. The list goes on.

That’s tens of millions of dollars that municipalities have to find. How are they going to do that? What’s their choice? What’s their option? Obviously, the easiest option is to pass on that tax increase and blame the provincial government for this particular tax. That’s not really…. It’s a tax shift. Not just employers but homeowners now have to bear the burden of what is called the employer health tax. Is that fair? They’re homeowners, right? They may be working for somebody else, but they’re now having to carry that burden.

One of the things UBCM states is that the cost of MSP, before being halved, was $19 million a year for their members. The employer health tax will cost municipalities $38 million a year. That’s a lot of local money and a lot of local taxes for people who have maybe bought their first home. It doesn’t matter if you’re a first-timer or you’re a long-time resident. Everybody is going to have to pay. That tax increase is going to be passed on.

Now, it could be a reduction in services. It could be less hours at the pool or the fact that they’re not going to spend as much money on public parks. It could mean that they’re going to just decide to reduce services — period — and it’s going to be a combination. Every council, of the 161 municipalities and regional districts in British Columbia, is going to have to sit down. They’re already having these tough discussions.

Here it is, only a few days after municipal elections. The first thing they now know is that they’ve got…. Most of them have big payrolls, because most municipalities represent a good-sized number of employees — more than nine, I’d say — and are certainly likely to be over the $1½ million. So they’re going to be paying the full brunt. In some cases, it’s not only the full brunt; they’re actually going to be paying the MSP that they negotiated through contracts with their employees or whatever arrangements they’ve made with their senior staff. That means that they’re going to paying, on January 1, employer health tax plus MSP — the smaller portion of MSP that has been reduced. I mean, the math…. It’s a way to get there, but it’s not as transparent.

I’m going to take this down to a more granular level. Really, I think that the people that are most affected by this are going to be the people that you think you’re helping out by taking this. The bottom line is that there are all sorts of things, extra costs that they’re going to be facing.

I mentioned the property taxes on the Mainland, but here in Victoria, property taxes — which have gone up, year after year, well above inflation — are going to go up another 2 percent just to help with the employer health costs. You know, it can play out so many ways in a city, a regional district or a town. We talked about higher recreation fees, less services. It could be just higher property taxes. You know what? No matter what path it takes, it always reaches the taxpayer. Taxpayers pay a higher cost, and life is less affordable than the one that was promised by the members opposite in the last election.

I go back to the increase in expenditures. The idea that we’re going to make life more affordable…. Money has to come from somewhere, right? The cost of our health care system, which is almost 45 percent of our total provincial budget, is being funded by the provincial government.

[3:40 p.m.]

There’s some transfer from the federal government, but at the end of the day, it is the type of tax where people at least respect the fact that they’re getting these services from a health care system that is virtually no cost and without user fees and the fact that we’ve seen other movement in terms of trying to make certain that the health system is completely a public system by this government.

So what’s happening with the removal of the MSP? The per-capita tax burden is rising here in B.C. This fiscal year it will be $425 per person. It doesn’t sound like very much. It’s rising to another $518 next year. The tax burden for a family of four is almost $4,000.

Now, if you compare that to the budget that we presented in 2017, where the per-capita taxes were projected to rise only $101 in the same years…. The members opposite spend a great deal of time talking about making life more affordable. Well, literally, that’s four times the amount of taxation, per-capita tax, that people are having to pay just to live here in British Columbia.

I look at how we sit here and we stand back about all of the tax legislation that’s in front of this Legislature. I mean, it’s a litany of increased spending, taxes — taxes on people that are supposedly taking money from people that are less fortunate or don’t have the means. Take the speculation tax. We spent a lot of time talking about that in question period. The reality is, of the tens of thousands of letters that I’ve received personally at my office in Kelowna West…. And I know that many of our other members throughout British Columbia, on both sides, I’m sure, have had the same consideration. It’s making people have to do things that….

It’s a surprise — the fact that you might have something like a home that you’ve saved for, for your entire life, to maybe hopefully retire and move to. Now the reality is that not only are you going to have the speculation tax…. If you’re a Canadian or a British Columbian, with the credit that’s provided, the exemption doesn’t work.

The bottom line is, okay, you’ve got the speculation tax on the differential between that 400,000 and whatever your assessment is. Now you’re also going to have an increase in your property taxes, because the employer health tax is going to require the municipalities, as I just read off…. The UBCM, not the B.C. Liberal Party, is forecasting $38 million more in extra costs that municipalities have to come up with.

I think probably one of the things that we’ve talked about is charities. We’ve talked about not-for-profits. They have employees. They pay their staff. I’m glad to see that the government has given some relief to those groups. Of course, when you’re fundraising and you’re raising money, it’s very difficult to have an arbitrary, let’s say, 3 percent, if you happen to be in that higher category and, all of a sudden, are having to pay that out of moneys that have either been fundraised or donated from other means, etc.

I don’t think that we should think of this as being quite the relief that we think of it as. We all know that businesses will face a decision between raising prices, laying off employees, and in the end, British Columbians will pay the price.

The government has claimed that 85 percent of small businesses will not be affected. However, the Canadian Federation of Independent Business states that 44 percent of small businesses will pay that tax, with an average cost being $15,500 per year. But in the same study, the CFIB found that 56 percent of businesses say the health tax will cost more than the MSP, and 32 percent are planning on laying off employees due to the tax. Now, they might rethink that when they think about their business.

[3:45 p.m.]

As an employer, somebody that actually has worked very hard to make certain that a team of people come together and work to help a business create a product and be able to market it and eventually sell it and cover the cost of operation and make certain that that money comes back into the company so that incentives like profit-sharing…. The fact that employer benefits that we provide and things like that — all of those extra things are optional in terms of employees.

We have the employment standards. I think that most people know that at an average wage of just under $27 per hour in British Columbia…. I know that the minimum wages are going up, which is putting pressure on that lower end, but the bottom line is that we are likely going to be precluding some of the lowest income earners from getting any of those bonuses, the benefits of profit-sharing, etc., as the employers look back and try to think about: “How are we going to cover the cost or the differential of these things?”

These tax discussions seem to have been driven by almost a fantasy that all business is a big business, and that’s just not true. Many businesses fail. Forty years ago I used to be in the banking business. I lent money to people to start businesses. They mortgaged their homes. They borrowed. They did all of those types of things. It is not an easy thing to start a business. It’s not an easy thing to make a business work and generate the income.

You make mistakes. You’re out there. You’re risking everything. It’s not only the fact that you put everything that you own on the line, but your family is involved in it, committed, etc. And the bottom line is that this is not going to make it easier for some of the businesses that maybe have just thought that…. Maybe they’ve gotten to a point where it’s nice to have that tenth employee, and all of a sudden: “I’m over that threshold, and I’m going to be paying the employer health tax, so maybe I’ll just go back to not hiring that extra employee.” It’s a disincentive to grow your business to a higher level.

I don’t think the employer health tax is going to shut down our local Starbucks, at least I don’t expect that — or Walmart. But it’s going to hurt small businesses across the province. This shot, I think, is fired at mom-and-pop stores on every corner of B.C. Perhaps this misunderstanding shouldn’t be surprising, because most of the members opposite…. I don’t believe that I know of any that have owned businesses that have managed a budget of their own money, like I just described.

Mr. Speaker, you know that I have…. I can tell you that margins are thin, and I can tell you that there are lots of pressures in what goes on every day in a business. Increased cost from…. Well, take energy. Manufactured goods that we don’t produce here in Canada have to come across the line — the things that we don’t produce. I realize that those are incentives and opportunities, but there are some things that we just don’t produce in a country like Canada or even in British Columbia.

I think that that side of the House is wilfully ignoring the fact that driving up costs for employers is going to have one of two impacts. It’s either going to drive up the cost of the goods and services that these employers provide, or it will lead to a reduction of the non-mandatory costs. That could include staff.

I’m just thinking about some of the things. As an example, I came in thinking about somebody working for any type of employer here in British Columbia that is paying this tax. They’re thinking: “Wow. That’s great. I don’t have to pay the MSP for my family anymore.” But at the end of the day, the producer that’s producing, whether it’s food costs or whether it happens to be some of the things that they use around their home…. I mean, it could be repairs and maintenance. It could be…. I’ve mentioned property taxation and stuff like that. All of those things are going to chip away, and it’s going to be clawed back from multiple different organizations.

You asked the question: “How are food costs going to go up because of this employer health tax?” Well, I can tell you that this tax specifically targets both large and small businesses. It targets people that are producing primary food production right here in British Columbia.

A couple of days ago…. And I wasn’t surprised by this, because on February 20, when it came out, lots of people said: “What’s this new employer health tax all about?” The bottom line is that they phoned and said: “Look, we’re paying the employer health tax. We already had been paying MSP, but now we find out…. Because of the fact that we can’t find the available workforce here in British Columbia, we work with the federal government and bring in people under the seasonal agricultural workers program.”

I know that there are many that don’t know how that program works. I think that probably some people think: “Well, you’re taking jobs away from British Columbians.”

[3:50 p.m.]

As somebody that knows a bit about farm labour, I can tell you that it has not been easy in the last five to ten years to actually find the necessary workers who’ve been able to do that type of labour. It’s not about the pay. Do you know that seasonal agricultural workers not only get the same wages and benefits as every other British Columbian; they get flown here? They get housed here. They also have transportation while they’re here. They also have health insurance that’s paid for by the employer.

Here we’ve got somebody that is not only paying a premium for all these added costs, but we now have the government saying: “Well, you’re going to pay an employer health tax on your labour bill.” Whether it’s greenhouses or whether it happens to be out in the fields growing apples or whatever it happens to be — cherries, etc. — the employer will be subject to the employer health tax as well as the other insurance that they have to cover. That’s mandatory, if you want to look it up.

It’s the type of thing that doesn’t do anything to make food costs more affordable. It ends up passing it on and making it so that the employer now has to find ways to do that. Now, they can increase production, maybe productivity, innovate. I don’t think many self-employed business people are going to be thinking: “I’m probably going to downsize.” But there are some that are going to be making that choice.

The government keeps claiming that only a small percentage of businesses will pay. They say, in fact, that big businesses are going to foot the bill. But the CFIB, the Canadian Federation of Independent Business, says otherwise. It says approximately 60,000 B.C. businesses, most of them relatively small, will be footing the cost for this bill.

Companies who don’t pay their employees’ MSP premiums will be hit very hard. For them, this will represent a whole new tax to be paid. It’s one that they wouldn’t have faced under the B.C. Liberal government, with our plan to eliminate in stages.

We were going to be eliminating, as I mentioned…. On January 1, we were taking a 50 percent reduction. But the idea was that it’s not a shell game. We’re not hiding it. We’re not putting it onto…. We were taking it off. We weren’t putting a new tax and hiding it somewhere else, in all of these corners of the province where charities, not-for-profits, schools, universities and municipalities have to pay those extra fees.

Next year you’ll keep paying MSP. You’ll have to pay the employer health tax on top of that. This is behaviour that I cannot, for the life of me, understand. Why is it happening?

I think that what’s important is…. I’ve believed in consultation, trying to find consensus. We had the previous speaker speak about the fact of why we would have a task force dealing with MSP and then have them report out on March 31, after the budget and the decision had already been made. That’s an extra…. It’s, basically, like a faux consultation.

Why would we do it? Only to validate or confirm? It just seems like we had the consultation without any regard to why we would do that. I mean, if it was me, I’d be embarrassed by that. I haven’t heard too many apologies about how we’ve arrived at how this is going.

Anyway, was this policy drafted on the back of a napkin, or was it thoughtfully put together as a progressive tax? Is it something that they know where they want to go? We’ve seen modifications to the bill already. There’s the exemption for not-for-profits and charities, but not to the same level that…. It’s still having to come from somewhere.

Either way, it’s not a good look for the NDP, and it’s not a good outlook for British Columbians. I’m worried that a little bit more affordability may be slipping away from those families. They’re going to be paying those higher prices that I mentioned for food, energy, shelter — all of those types of basic things.

There’s a lot of talk about affordability. If we’re really trying to get down to that, what happened to that $400 renter’s grant that was promised during the election? I don’t hear anything about it. I see the minister in the House here. Is it something that we’re going to hear about soon? That was a promise of more affordability. I don’t see it in the budget. Maybe it’s coming in February.

They will be sending more money — this is taxpayers — to municipalities, universities and colleges to help fund this double dip. I think it’s hypocritical. I don’t think that this is really being straightforward.

[3:55 p.m.]

The $400 renter grant. Is it coming or not? I guess it’s not question period. We’ll leave that for another day.

On top of that, the possibility of wage increases that could make life more affordable seems unlikely. And I say that meaning that things that are going to be restricted by employers around the province…. The ones that aren’t in the SUCH sector are the ones that are actually having to go out and sell services.

What about the builders that are building homes? We keep talking about the high cost of housing. We’ve heard all the comparisons about what the cost is, even before you break ground, in the city of Vancouver just for a condominium. I think it was around $250,000, and over $600,000 for a single-family unit, in just all of the contributions.

To be honest, I think that…. Here we are. The employers that are building houses and the people that are doing the electrical, the plumbing and all of those services are now having to add that extra 2 or 3 percent. There are many that have payrolls, I’m sure, of over $1½ million, who are going to be adding that onto the cost of construction — the sawmills that cut the lumber, etc.; the glaziers and everything else.

It seems to me that that’s hypocritical if we think we’re getting to affordability by sliding that tax over and putting it onto the backs of employers. They have the money, right? That’s where all the money is hidden.

I think about the other things that the CFIB asked small businesses — how they’re going to find funds to pay for this new tax. Sixty-three percent said that they would reduce planned bonuses for their employees. Sixty-two percent said they would reduce planned raises. Of course, that’s been somewhat taken care of if they happen to be below or at minimum wage, but I don’t think there’s very much of that going on these days.

Forty-six percent would eliminate plans to hire additional staff. In other words, this new tax equals less money for workers and fewer jobs. The money for those raises is going to go straight to the Finance Minister’s coffers to fund this tax.

This bill pretends that it’s reducing costs for people when the reality is that it’s making life less affordable. That seems to be the path that this government has chosen — making life more costly for British Columbians, one tax at a time.

I will not be supporting this bill. Thank you very much for the House’s time.

L. Throness: I am here to speak about Bill 44, the employer health tax. It’s been a long time in coming. We heard about this tax in the budget in February. It’s taken eight long months. Like the speculation tax, the government couldn’t decide which way to go. Finally, the legislation is here, although we would have appreciated if it were not to have appeared at all.

I want to begin to talk about this issue by describing the history of it. As we know, B.C. was one of the only provinces to have a Medical Services Plan premium on top of people’s taxes. The NDP always claimed that we were the only province with a Medical Services Plan premium, but Ontario had one too.

I know that because I lived in Ontario, and I paid it. It was paid in one lump sum through the income tax every year. It was means-tested, just like the B.C. premium. It was $900 a year or $75 a month, so it was very similar to the MSP. We were not alone in charging the Medical Services Plan premium. And lo and behold, Ontario still has it.

In any case, I can safely say that the MSP was the issue about which I received the most complaints in my office, particularly from people who were on fixed incomes who perhaps made just enough not to get a subsidy. It was an irritant for them. It was a constant, nagging monthly reminder that the government was dipping into their pocket with a premium, even if that premium went to health care, a program that was very important and that everybody needs. Especially the elderly on fixed incomes would need that at some point in their life.

There were all sorts of bureaucratic problems that attended the MSP. People, for instance, would have a big income last year, so they’d be paying the maximum MSP premium. Then they’d lose their job this year, but they’d still be paying the maximum premium, and there were a number of bureaucratic obstacles to getting that premium lowered.

Every year premiums would inch up a bit, just as health care costs were vaulting up by $1 billion a year. At the same time, the subsidies would become more generous. But every time the rates increased, it would elicit a chorus of complaints from those who were affected, so it was a constant headache.

[4:00 p.m.]

We kept the Medical Services Plan premium because it raised $2½ billion a year. That, at the time, amounted to about 5 percent of the provincial budget. It’s not something that you can just wish away. We couldn’t replace it just like that, so we whittled away at it. We reduced premiums, and we increased subsidies bit by bit. But people were unhappy with it.

Because of our excellent economic management under the B.C. Liberals, the economy was growing quickly. So I welcomed the news, in February of 2017, when the budget announced that the government would eliminate half of the MSP premium on January 1 of this year for those making less than $120,000 a year and commit to getting rid of the other half in future years, as we were able. In addition, more people would receive subsidies, and fewer people were charged MSP and so on. There were big changes made to the MSP in the budget of 2017.

I think we really owe a vote of thanks to the member for Abbotsford West, our Finance Minister, who did an excellent job in making that budget, in managing our economy and managing the finances of B.C. Because of that, we left the NDP with a $2.7 billion surplus.

Now, the promise that we made at that time, in February of 2017, was a costly promise. It would cost $845 million per year, every year, going forward. We could do that because we were running strong surpluses. We had a very strong economy. We had five budget surpluses in a row. We had been very diligent in managing the economy well. In that promise that we made, we were not going to shift the tax burden somewhere else. We were going to reduce our annual surplus instead. It was an overall reduction in the burden of government. It was not an increase.

Of course, the NDP decried the measure. The fact that we didn’t get rid of it all in one bite was a problem to them. They felt that we should get rid of it completely, eliminate it completely, and that word — “eliminate it” — became the hue and cry of the NDP. In response to the budget, the then critic for Finance, who’s now the Minister of Finance — and doing rather a poorer job than the member for Abbotsford West, in my view — called for the elimination of the MSP altogether. That was taken up by the NDP from then on.

We came to the NDP platform in 2017. The NDP promised again to eliminate MSP fees.

Interjections.

Deputy Speaker: Members.

L. Throness: Their platform said that the B.C. Liberal cuts to MSP were phony, that the B.C. Liberals planned all along to increase other taxes and fees to make up for the lost revenue from the MSP. Of course, this was all untrue. But this was their hue and cry — to claim to eliminate the MSP and attack the B.C. Liberals as planning all along to replace the reduced MSP premium with other taxes and fees. None of it was true, of course, but in retrospect, it was crafty politics.

It’s really incredible, when you think of it. The B.C. Liberal plan all along was to reduce taxes for families, businesses, municipalities and non-profit organizations across the board, by not only eliminating the category of MSP, but to leave that money in the pockets of families and businesses who paid the premium. It was essentially an increase in family and business income, with no corresponding increase in taxation.

The NDP claimed that this was their plan, but it was really their plan to do the opposite — to shift the burden of MSP premiums from individuals onto the backs of employers of all kinds. This would then be passed on to ordinary consumers, municipal taxpayers, students and others in the form of higher prices and taxes — not to reduce the tax burden at all. It was really, I must say, a masterpiece of political manipulation. In my view, it was cunning. It was shrewd. It was crafty. It was sly. But it was not wise.

Of course, the NDP did take advantage of our good policy by sticking with B.C. Liberal policy for a while and eliminating half of MSP premiums, as we had promised to do on January 1 of this year. But of course, they had to go ahead and add to that an employer health tax.

Now, I said that the policy is unwise because I do believe that bad policy catches up with governments. It will catch up to the NDP in the end, because there will be all sorts of unintended side effects.

[4:05 p.m.]

For example, increasing taxes on business is bad for business. What’s bad for business is bad for the economy. What’s bad for the economy is bad for the B.C. budget, and we pay all of our health care costs from the budget. So health care will become harder to afford because of this bad tax. It is a shortsighted move.

So we come to the employer health tax, which I think is really a revived MSP premium. It’s sort of like a zombie rising from the dead. It just keeps coming back.

How much does it raise? Well, true to form, by January 1, 2020, when it will be fully implemented, the cost of getting rid of the Medical Services Plan premiums will be $1.4 billion a year. But how much will the employer health tax raise? It will raise over $1.9 billion. In other words, the employer health tax will mean a net increase in taxes on the economy by $528 million a year, which is 38 percent above what the Medical Services Plan premium raised.

The NDP are not just setting in place a replacement tax. They’re replacing the tax and raising it by 38 percent. Only the NDP could call an overall tax increase of 38 percent, or $528 million a year, an elimination of a tax. All they’ve done is to eliminate the name and the category of Medical Services Plan premium, but they’ve substituted for it a higher tax, the employer health tax, that will hit the economy between the eyes across the board.

Talk about smoke and mirrors. Talk about an economic shell game. Talk about political sleight of hand — a card trick in which the NDP have drawn out the joker and given it to taxpayers.

After all of this, after all the promises to eliminate the tax and condemn the B.C. Liberals, the NDP are keeping the MSP. They’re keeping it for another year, until 2020. I find this so ironic.

If the B.C. Liberals had remained in power, we would have eliminated the MSP without raising other taxes. Probably, by 2020, we would have eliminated the rest of the MSP as well, without raising any other taxes — essentially giving a raise to individuals and families across B.C. But alas, that did not happen.

Well, I want to talk about the impact of the employer health tax for a moment. First, for businesses that already paid MSP premiums, the legislation comes into effect in January. So the businesses will have a double whammy for a year. In the year 2019, they will pay the MSP premium, which was not gotten rid of, not eliminated by the NDP and won’t be for more than a year.

The rate of the tax will be high. Employers with a payroll of more than $500,000 will be captured by the tax. If your payroll is above $1.5 million, the rate will be 2 percent on all $1.5 million. There’s no exemption there.

Non-profit institutions will not be exempt either. For non-profits and charities, the tax begins at a payroll of $1.5 million, not at $500,000. For charities with a payroll above $4.5 million, it’ll be 2 percent on the full amount. So it’s going to impact a lot of people.

What about municipalities? What will be the impact on municipalities? They’re not exempt. They’re considered to be employers like anyone else. When they heard about the EHT, the Union of B.C. Municipalities decided to survey its members and find out about the impact.

The produced a report in May that lays it all out. Seventy-seven employers responded, including large ones like the city of Vancouver. This is significant, because almost every municipality already pays the medical services premium for its employees. That means that the vast majority of municipalities will be affected by the double whammy in 2019.

First, the municipalities confirmed that the 50 percent reduction in MSP on January 1 of this year reduced their costs across the board, but when it came to the EHT — allow me to quote from their report — “71 percent of respondents indicated increased costs in relation to EHT implementation in comparison to 2017, with 36 percent of respondents indicating increases of 25 percent to 100 percent, and 15 percent indicating increases greater than 100 percent.

[4:10 p.m.]

“The transition year of 2019, in which MSP premiums are retained while the EHT is phased in, will also create an extraordinary single-year increase in which MSP-related costs will more than quadruple for the respondents.”

Amazing. Municipalities with populations above 50,000 will see increases of an average of $630,000 a year. Surrey alone will pay $4.7 million back to the government in MSP and EHT next year.

Who will pay for that? How will it be funded? Well, municipalities have basically one source of revenue, and that’s property taxes. They could reduce services, sure, or they could increase taxes. There’s no other way to foot this new bill, and since service reductions are not very popular, we will see that the EHT will cause property taxes to increase by 1 or 2 percent.

Effectively, the provincial health system is being funded in part through property taxes. Now, municipalities talk all the time about “downloading” — the province downloading to them. Well, this is a major aspect of downloading a provincial cost on to municipalities and municipal taxpayers.

Now I want to talk about child care for a moment, because I’m critic for Children and Family Development. The employers health tax will apply to market-based and non-profit child care as well. This summer, we surveyed all child care providers in the province. There were 3,377 unique addresses that we sent an email to asking them a number of questions, including a question on the employer health tax.

Forty percent of those 3,377 providers responded. That’s a large number who responded. Of those who responded, 41 percent said they would be subject to the employer health tax. That’s nearly 1,400 child care providers who will be paying the employer health tax. They weren’t all market-based, either. They were a mix, basically evenly split between non-profit and market-based care. Eighty percent of them, though, thought it to be unfair.

On one hand, the government is saying that they’re going to create child care spaces and they’re going to reduce costs for parents, and on the other, they’re hitting providers with a 2 percent payroll tax. They’re giving with one hand, and taking away with another.

Many providers have told me that they’re burning the candle at both ends. They are burning out as their costs increase. They can’t raise their fees because of their stringent contract with the government. They can’t find workers, and now the government hits them with a payroll tax. That will have a chilling effect on child care across the province.

Let’s move on to talk about private sector impacts for a moment. The CFIB, the Canadian Federation of Indepen­dent Business, did a survey of their businesses. Although the government says that only 5 percent of businesses will pay the EHT, they found that 60,000 businesses, or 44 percent of businesses, are going to pay the employer health tax.

This is what they said: “It is hastily conceived, poorly designed, and is bad for the health of small and medium-sized business.” That’s from the CFIB, the Canadian Federation of Independent Business.

It is a tax on job creation. It will result in fewer jobs being created. I want to give you a hypothetical scenario that was offered in the Vancouver Sun today that I thought was quite insightful.

You have a plumber’s company, 40 employees with a payroll of $3 million. It will have to pay the employers health tax of nearly $59,000 a year, almost equivalent to one plumber’s salary. The company will have some choices. It can work hard to get more work. It can increase its prices to consumers. It can lay someone off. Or it can decide not to hire someone if the business grows. In these cases, everybody else is going to have to work a little harder, and it’ll be harder for the company to grow.

The tax will cause tax avoidance, as tax increases always do. The threshold is $500,000. What will a company that has a payroll of $490,000 do? The employer will have the incentive not to grow the payroll, because the moment he goes over $500,000, he’s going to get dinged $10,000 a year. It’s a tax on economic growth.

One thing I think we’ll see is companies divide into separate business entities so that their payroll will be divided up and no one payroll will be over $500,000. You’ll see all kinds of tax avoidance as a result of this new tax.

[4:15 p.m.]

In the end, it’s workers who will take it on the chin. A recent empirical study in Canada by economists based at the graduate business school of the Université de Montréal in Montreal found this: “Payroll taxes are passed almost entirely to workers in the form of lower wages.” It means that wages are going to go down because of this.

The EHT will take, by the third year, $1.9 billion every year out of the provincial economy, much of it out of the pockets of workers through lower wages. That means that they will be consuming less. It will be a drag on the entire economy. This is from a government that wanted to make life affordable, and ran an entire campaign on making life affordable. It’s making life less affordable through the employer health tax.

Now, I want to look at some other tax increases that this government has imposed or raised to put the EHT in context. The EHT is just one part of a larger package of tax measures. Let’s consider some of the major taxes that the government has imposed or raised so far. The total amounts to 18 different tax increases, but let me touch on a few of them.

We have the carbon tax, made no longer revenue-neutral. That’s over $1 billion a year in tax increases to our economy. We have the speculation tax that’s not really a tax on speculators. That’s going to raise $200 million a year. We have the so-called school tax on expensive homes in B.C. — the school tax, we know, that goes into general revenue, not into schools. It’s going to raise $200 million a year. It will join the speculation tax as a new kind of tax, not on a stream of income, but on wealth, on assets.

People’s property taxes, most of them in Vancouver, can double overnight so that Vancouverites will be paying up to $30,000 a year in taxes. Their income isn’t increasing. It doesn’t mean that they have extra income to pay that tax. Many will have to sell and move, and that means that the price of the house will go down. Indeed, we’re seeing property prices falling all over Vancouver.

I hope the NDP is not jumping up and down for joy at this, because there will be negative unintended consequences. For example, some of these houses rent out to multiple renters. And some of their rents will immediately have to increase because of that, making life less affordable.

The government raised income taxes on British Columbians earning more than $150,000 to a rate of 16.8 percent, from 14.7 percent under the previous government. That’s going to raise close to $1 billion. It increased the general business income tax rate from 11 percent to 12 percent. That makes us less competitive across the country. The government substantially increased the carbon tax from $30 a tonne when it took office to $50 a tonne by 2022. It went up by $5 a tonne on April 1, and it will go up for several more years. Now we can add to that the employer health payroll tax at another 2 percent.

I want to talk about another payroll tax that’s not a provincial tax: the federal Canada Pension Plan payroll tax, which itself is going up by two points over a period of years from 5.5 percent to 6 percent. Workers pay the same. That’s a total of 12 percent of the national paycheque going only to the CPP. This means that in B.C., every employer with more than $500,000 in payroll will have 8 percent to pay in payroll taxes. You don’t think that will have an economic impact? That’s going to have a big economic impact.

Last year the government inherited a surplus of $2.7 billion when it came to power. That was just 14 months ago. Seven months later, in February, in their first big budget, they had whittled that down to $300 million, as they dramatically increased government spending and dramatically increased taxes by a total of $8 billion since they became government.

I close by saying: who knows what the budget will look like in February? I am afraid to look. I will be voting against the employer health tax and hope that the govern­ment will not introduce even more new taxes in their budget in February.

A. Olsen: Today I rise to take my place in the second reading debate of Bill 44, the Budget Measures Implementation (Employer Health Tax) Act.

[4:20 p.m.]

I must say that up front, this bill is something that I have struggled with. I’ve struggled with different aspects of this bill. On one hand, there is an urgent need to eliminate medical services premiums, or MSP. On the other hand, I know that businesses in my riding and other parts of B.C. are facing a number of challenges. For many of them, this shift that’s proposed does not help.

I’m also uncomfortable with the process the government undertook to get to this place. I’ll touch on a few of these pieces briefly in this speech today.

First and foremost, I want to speak to the need to eliminate MSP. Eliminating MSP in British Columbia is long overdue, something that’s been ignored for more than a decade now. MSP is a regressive tax. It’s a tax that hits seniors and others on fixed incomes particularly hard.

For almost four years, my colleague from Oak Bay–Gordon Head has been pressuring government to eliminate MSP. He’s made the argument, supported by tax experts and economists, that making everyone pay a flat fee each month is regressive, unfair and an administrative burden. MSP put a huge burden on individuals, and it disproportionately hurts those that can afford it least. So despite having some disagreements with the chosen solution, I fully support the government’s move to finally eliminate MSP.

I’ve been struggling with the fact that the government chose to simply shift the lost revenue from eliminating MSP to a payroll tax, placing all the burden on business. Why? I’m struggling with this choice. Since becoming an MLA, I’ve heard repeatedly from businesses in my riding about the challenge they face.

The Saanich Peninsula has one of the largest areas of industrial land in the region. Businesses in my riding employ thousands of our constituents. They commute from all parts of the CRD to work because it’s one of the only places in the region that manufacturers can set up shop. As a result, we benefit from having many mid-sized businesses in manufacturing, retail, food, tourism — businesses like Butchart Gardens, Viking Air, Epicure, Morinwood, Sherwood Industries, Schneider Electric.

Because of skyrocketing housing costs on the Saanich Peninsula, many employees cannot afford to live near the businesses, so they commute. On top of this, there are major transportation problems with getting to the peninsula, which makes the commute a frustrating and time-consuming task.

In this environment, a number of businesses on the peninsula are telling me that they’re facing challenges in keeping their operations sustainable. These challenges are not new. These challenges are ones that have been inherited by this government, that had been perpetuated by the government before, the so-called government that was in favour and supportive of business. These are challenges that they’ve faced for more than a decade. These challenges are challenges that they’ve brought up repeatedly to former MLAs, going back a very long time, and have been ignored. They don’t feel like government is helping now or in the past.

There isn’t adequate workforce or workforce housing or public transportation in the region, and these are issues that they’ve been asking local and provincial governments to act on for more than a decade. What have they got? They’ve got silence — silence from all levels of government, frankly, until we want something. It’s very frustrating.

You can imagine how the provincial government’s deci­sion to implement a new payroll tax went over. You can imagine how thrilled they were to try to balance that tax shift with everything else on their plate. Don’t forget that these managers have a close relationship with their employees. They’re responsible for their employees, making sure their children have clothing and food and building a stable, resilient business to sustain these families. That’s no small burden on the management or on the owners.

Let me focus for a few minutes on a medium-sized business, one of those home-grown success stories. From a basement in this very neighbourhood, right here in the Minister of Finance’s riding, right here in James Bay, Epicure was created. In 2003, Epicure moved its base of operations to North Saanich.

Their current CEO, a young woman by the name of Amelia Warren, is the inspired entrepreneur daughter of the founder, Sylvie Rochette. This is what we celebrate in this place. This is the story that we want repeated over and over again. But it gets better. Epicure employs 180 people from this region, and millions of dollars flow each year to the 10,000 direct sales agents across Canada, the No. 1 direct-sale company in the country. Their CEO and more than half of their executive team live on the Saanich Peninsula.

[4:25 p.m.]

They generate $50 million in annual sales from a half million kilos of raw ingredients that are blended into four million jars and four million sachet packs. That’s one million orders picked, packed and shipped each year from the Saanich Peninsula. So if you’re wondering….

I think everyone in their operation understands the benefit to the individuals and families of getting rid of the highly regressive MSP premium. In fact, we had that discussion yesterday. On a very personal level, they quite likely are pleased. From a business perspective, I believe they also understand that we cannot simply make billions of dollars worth of health costs disappear.

What I heard is the tax shift adding $160,000 onto their costs is a frustrating fact. All of this in the context of the challenges that I raised above — a lack of transit in their area, a lack of workforce housing in their area, the silence on these issues on top of the perceived insensitivity to the very real competitiveness issues that they face.

What we, in this place, should be sensitive to is that Epicure is an entirely Canadian business, and next year they’re breaking into the American marketplace. Yesterday morning, in addition to meeting Lindsay at reception; Amelia, their CEO; their vice-president of human resources, Christine Magill; Jess Berlenbrach, the vice-president of operations; the vice-president of sales, Gail Gioffredi; and Crystal MacGregor, the director of innovation, research and development, I also met a gentleman called Brick Bergeson. Brick is leading the company’s expansion into the United States. He’s setting up their operations in Salt Lake City, Utah.

In normal circumstances, I think we would outright applaud this: a local multi-million-dollar success story going international. Normally, the story is how we are trying to attract business from elsewhere here. But in my riding, business retention is top of mind. This employer is one of many who are critical to the health and well-being of our community.

We all know how aggressive the United States is in trying to lure business to their hollowed-out cities. The tax and incentive packages are really quite attractive, so we should be acting in a genuine way to keep the investors, the entrepreneurs, the game changers in our community. We should be responding when they tell us that they cannot find employees because there is no workforce housing or transit is bad or that they can’t find skilled labour.

I’ve toured many businesses like Epicure in my riding over the last number of years, and the story is the same. To sum it up, I’ve heard from them. They feel ignored, and they feel taken for granted. This is not new. This is not 15-months new. This has been going back a long, long time. This has been going back more than a decade, where they’ve felt ignored.

It is good for us, I believe — the last province to do so — to get rid of the regressive MSP premiums. I think that this is highly popular for people and for families. It is an important component to making life more affordable.

Now, I know that the impact of the tax is mitigated for small businesses. If you have a payroll under $500,000, you won’t be paying this tax. And I know that there are savings from eliminating MSP for individuals and for some businesses that currently pay these premiums. As I said before, eliminating MSP is a move that is long overdue.

We should not forget that for some companies, we are competing for their business with other jurisdictions. I’ve heard this concern echoed not only from businesses directly but from experts as well. In an environment of increasing costs and competitive challenges with our neighbours across the border, the employer health tax is just one more thing that businesses have to deal with. In the words of the MSP Task Force, a “payroll tax could reduce the competitiveness of B.C. businesses at a time when they’re facing several competitiveness challenges.”

[L. Reid in the chair.]

This leads to my second concern about this bill: the process that we took to get here. In our confidence and supply agreement with the government, we committed to the elimination of MSP. We’ve been clear all along that what we would have done would have been different from what this government has proposed. We would have rolled MSP into a payroll tax and personal income tax system to ensure that revenue was being collected in a progressive way so as not hurt those who can afford it least and to reduce the tax burden on any one group.

[4:30 p.m.]

For government to choose to strike a task force instead to advise them on the best way to make up revenue…. This task force was made up of respected experts in economics, in tax policy. They undertook significant consultation and extensive research on the best way to make up the revenues.

The problem is that government chose to forge ahead with this payroll tax, a payroll tax alone, before waiting for the task force to issue their final recommendations. This is a shame, in part because the interim recommendations of the task force aligned with the direction we would have gone, which I think, overall, would have been better.

I find this decision more troubling because I believe that when government makes moves like this, it undermines people’s trust in government. It makes people question the independence and validity of other expert panels and the use of evidence and expertise in informing government decision-making. I hope and trust that this was a one-off and that government will truly be led by the expertise of other panels who are currently undertaking their work on critical issues.

Overall, we would have chosen a different route to eliminating MSP. I remain concerned about the impact this payroll tax could have on businesses, especially given the other challenges that they’re facing, the challenges that were left over from the previous government.

The fundamental outcome that both we and the government agree on is the urgent need to eliminate the medical service premiums. It’s in this context that I support this bill.

Over the next number of months, I will continue to meet with and listen to businesses in my riding, and I will be closely watching the state of business and the economy in B.C. I will be sure to raise their concerns, as soon as they arise, with the minister. These meetings are not going to be easy. I acknowledge, in this place now, that once this tax has been shifted to business, it’s going to be very difficult to get any government to shift any of it, even part of it, back to a progressive way, like a line in the income tax, like another jurisdiction. It was for years that the public was calling on the previous government to change this. While they claim that they are supportive of a change, they didn’t make those changes.

We must monitor the impacts of this shift very closely, and the government must be nimble and willing to adapt if they see a need. The cost of losing those businesses to governments that are putting measures in place to be far more competitive, even from just a bottom-line perspective and maybe even to their own detriment, is very high to our communities, to our tax base, to the quality of life in our region, to innovation and to our confidence.

I strongly suggest that government look at the recommendations of their own task force, to tax items that we don’t want — items like sugar, which causes costly illnesses to our health system, like diabetes. These are opportunities for the government to offset some of these costs.

I’ll be asking the government questions and raising potential solutions to ensure that they govern in a progressive way that takes the burden off people while also ensuring that B.C. remains an attractive place to invest and do business.

P. Milobar: It gives me pleasure to rise to Bill 44, discussing the employer health tax and following the previous speaker. There’s a simple way for the member of the Green Party and all members of the Green Party to ease this feeling of a burden on their shoulders that this tax may place on their local businesses.

We’ve heard, through that whole speech, the concerns that his local businesses have expressed to him. The sincerity that he feels came through — towards their apprehension around this tax, the impact it’s going to have and how it could restrict a lot of their growth. There’s a very easy way that the Green Party could ease that burden on their shoulders: they could vote against this tax. I’m sure that my party will be voting against this tax. It’d be a wonderful way to demonstrate, perhaps, that this House can operate across party lines despite all of the rhetoric that says it can’t, and I would encourage the Green Party to do just that.

We know that they didn’t with the speculation tax. We know that they launched a lot of vitriol about what they were going to do with the speculation tax, and then that all disappeared and vanished. Here we are, following another speech from a Green Party member that indicates they actually understand the burden this tax is going to place on small business, that they understand it actually is going to harm small business. They understand that it could impact jobs. They understand it could impact expansion, people’s ability to be innovative.

[4:35 p.m.]

Yet it sounds like they’re going to support the tax, but they’re going to make sure they keep an eye on these things unfolding. Well, that’s little comfort to the businesses that this starts to impact. It’s too late by that point. If there is already an acknowledgment, by the junior partners that are propping up the government, that this tax is going to harm the businesses in their community, they have a duty to the people they represent in their community to express their views in this House. The easiest way to express those views in this House is to vote appropriately. Isn’t that the whole conversation around proportional representation right now?

We have an employer health tax that we know is going to be punitive to small business. We know, despite what the government wants people to believe, that it’s going to be a large number of small businesses. Now, if it’s not enough of a three-card monte game going on right now, between MSP and the employer health tax and the double dip and the refusal of the government to even acknowledge that that’s actually what’s happening in 2019, what we see is this new threshold that comes in.

Back when this was introduced in February, the minister talked about 0.98 percent if you were at $750,000, 1.46 if you were at $1 million, 1.76 if you were at $1.25 million and 1.95 percent tax for anything over $1½ million on your payroll. Interestingly enough, that language is gone in this bill. Instead, this bill has been designed to give the impression that you won’t pay any tax on your first $500,000 of payroll, which is simply not accurate. What the government has done, instead, with this bill is they’ve recalculated the rates you’re going to pay.

Although they may waive the first $500,000 of, say, a three-quarters of a million dollar payroll, under the first presentation of this in the budget book in February, that $750,000 payroll would have been taxed at 0.98 percent. Now the government is telling you, “Don’t worry about paying tax on the first $500,000 of that $750,000,” as if small business people don’t know their books and how to calculate these costs. It’s almost insulting — well, no, it is insulting — to the men and women who go to bed many nights wondering, “Is it the mortgage payment, my payroll or the car payment I’m going to miss tomorrow” to keep things moving along in their small business.

As if they don’t know how to calculate that although on a $750,000 payroll you now, magically, don’t pay on the first $500,000…. Wait, we have more. You now will pay 2.925 percent on the extra $250,000 — which magically comes out to, dollar for dollar, the same amount you would have paid under the budget book proposal of 0.98 percent on the full $750,000. Boy, what a deal. It feels like they’re telling you: “Five easy instalment payments. We’re going to take one payment away, we’re going to add in some extra little $20 feature for you, and it’s a really good deal.” It feels like you’re on the Home Shopping Network, the way this is being rolled out.

That’s the fundamental problem with this whole bill. This whole bill is nothing but smoke and mirrors to try to pretend that they have eliminated medical services premiums, which, by definition, I guess they have — the difference being that when we were on this side of the House, we were eliminating it completely. We were eliminating it by not adding a different tax into the equation to make up the difference of what we were removing from the Medical Services Plan.

I guess the government has so little faith in their ability to grow the economy, so little faith that they’d be able to continue with further surpluses, moving forward, to pay for the full elimination of it, that they not only are replacing that with the employer health tax, but they’re actually taxing you more than they collected under medical services premiums. It’s because you’ve got to add a little bit more in there just for good measure, just to be safe. What they are doing…

Interjection.

[4:40 p.m.]

Deputy Speaker: Minister, only from your seat.

P. Milobar: …is trying to let the public feel like they’re getting this great break when, in fact, they’re raising a multitude of other taxes to you. On the one hand, while they’re saying that you’re getting MSP premiums back…. But remember, only if you’re someone that’s currently paying MSP premiums, because there’s a great many people on the lower end of the wage scale that actually don’t pay MSP premiums. To hear the government talk about it, every single person is going to see this savings, which is patently not accurate.

They’re diving into the pockets of small business owners, who are seeing their wages go up with minimum wage. Now, the small business owners I talk to can accept that. But now there’s this added cost on top of that. Why it’s significant is that as the minimum wage increases, as that lower-end wage scale goes up, it takes less and less employees to be in your operation for to you trigger the magical $500,000 mark and start paying this employers health tax.

In fact, if your staff, without any management, was being paid $14 an hour — and there’s a great many operations out there that do this — without even paying for one supervisor, manager position, anything like that, a 14-hour workforce, you would only require a staff of 20, and you’d be triggering this. That’s with no supervision, salaries, nothing. So to suggest that this isn’t going to impact small businesses in any significant way is disingenuous, at best.

Again, I would invite the Green Party to join us in opposing this, and I guarantee they’ll sleep better at night. They won’t feel that burden of knowing that small business owner that came to them and said: “This is going to impact my operation. This may mean I may have to close.” They won’t have to have that conversation with that person.

The only conversation they might have to have is in the room with the secretariat where they say: “Well, you know what? We followed through on our confidence and supply agreement that said we didn’t have to vote on every single bill that you brought forward; that we didn’t have to be joined at the hip on every single thing you did; that we didn’t have to be able to, just lockstep, do everything; that if we spoke out strongly about something and threatened to bring a vote against it, we would actually follow through on that vote in this House.”

They actually have that opportunity here. They’ve missed every other opportunity to this point, in 16 months. I would welcome it if they would actually take that challenge on and represent the people that they’ve been speaking so passionately about, the small businesses in their own ridings they’ve been speaking so passionately about in their speeches.

That’s, ultimately, what this vote is about. This vote is about those very people. This vote is about trying to send a message to the government that enough is enough with the constant new taxation. It’s no wonder they can try to run around and pretend that they’re wizards with capital spending when they add $5½ billion of new taxes to people.

I’ve likened it, in the past, to when you go to buy a car stereo or a home entertainment centre and they have the famous five-buck-down deal. They tell to you come in, for five bucks down, no payments for 12 months. And you drive around town with your car stereo on, and you think life’s pretty good. Then on month 12 you suddenly get a bill in the mail, and you realize that car stereo wasn’t actually five bucks.

That’s what we’re seeing with this government with everything that they’re implementing. It’s all been pushed down the road. It all will start to accumulate in the next little while. We’re seeing interest rates increase. We’re seeing the housing market slow down. We’re seeing housing resales slow down. We’re seeing the average price of homes start to drop. We’re seeing unemployment start to move.

In fact, the only place we seem to see employment growth is in the public sector. The only place that this government seems to know how to create jobs is through government. Now they’re telling the people that actually do create the private sector jobs that they don’t know what they’re talking about and that this employer health tax is going to be wonderful. “It’s going to be great. Don’t worry about it. You’ll barely notice it.”

Well, they do notice it, and a great many of them are fed up. We’ve heard from the Green Party that they even acknowledge that they’re hearing the exact same things that this side of the House is saying. This isn’t even a partisan statement. This is, in fact, what the business community is truly saying.

[4:45 p.m.]

I’m not sure who the NDP are talking to out there. But the Green Party and the B.C. Liberal businesses in our ridings are all saying the same thing. Either they have some magical businesses within their ridings, or they’re not being quite as forthright with what they’re actually seeing in their email in-box. Of course, we may not know what’s in some people’s in-boxes, depending on which email address it went to.

The problem is that it’s not just the small businesses this is going to impact. It’s going to impact municipalities — the city of Vancouver by $13 million; Surrey, $3.35 million; Richmond, $2½ million; Abbotsford, $1.75 million; Kamloops, where I’m from, $700,000. I know very well what that’s going to do to the Kamloops city budget. No care, no concern from that side of the House. No care and no concern of what this does to the average person. No care, no worry about what that does, even just at the municipal operation level, for either a cut in service or an increase in taxes.

It is fundamentally wrong. It is fundamentally flawed, like every other taxation piece of legislation they’ve brought in. Frankly, it gets a little tiresome when you hear the Green Party spout the same thing about every tax measure that’s come in front of this House, yet they will be standing up, sure as anything, lockstep with the government. Not that this vote would bring the government down — let’s be very clear about that. The Green Party could vote against this bill, and the government would not fall. This bill is not a confidence vote, unless they choose to make it one.

When we’re hearing people say: “Make every vote count. I want my voice represented in this Legislature….” Well, the business community, for the members in the Green Party that have referenced them in their ridings, wanted their voice heard in this House. They didn’t just want their opinion read out. They wanted their voice heard by way of a vote, not by way of: “We’re going to keep an eye on things.” Not by way of: “Well, we’ll talk to the government if it starts to actually happen like the businesses say.” They wanted it to be voted against.

We heard the member reference that once the tax is in, it’s very hard to repeal. I seem to remember — I was much younger then — a whole federal campaign that was launched around getting rid of the GST. It seems to me we still have the GST, even though the government that campaigned on that won.

I seem to remember a campaign to axe the tax on carbon tax. My, how things have changed. Not only has that party that demanded that we axe the tax, whose leader at that time is actually the Finance Minister now…. Not only were they campaigning to axe the carbon tax; as soon as they got into power, they almost doubled it and made it no longer revenue-neutral. If you want to talk about what happens when a tax gets into a governmental system…. Yet they stand up and talk about how they’re making everything more affordable for everybody.

The Finance Minister herself, who stood up as leader of the NDP and campaigned to axe the carbon tax, turned around, in her first chance, and almost doubled the carbon tax — not only almost doubled it but turned it no longer revenue-neutral. And we’re somehow supposed to believe that a little bit of firm conversation in the secretariat office — after businesses start to close and people are getting laid off and their hours are cut — from the Green Party junior members will make the government see the light and that this will get changed and taken care of after it’s already in legislation and after they’re getting the revenues to flow in.

Again, I would challenge the Green Party members, for once in 16 months, to stand up with the courage of their words and vote against this bill with us. Otherwise, it’s just rhetoric. Otherwise, they’re not representing the people in their riding that are demanding that this tax not go through.

For that and many other reasons — I know I have many other colleagues that want to chime in on this as well — I’ll be opposing this. It’s patently unfair. It’s patently misleading to people. It’s not going to make life better for people.

[4:50 p.m.]

We’re already hearing and seeing from businesses that are figuring out ways to either freeze raises, to start cutting hours, to be a little bit tighter, to maybe have a seasonal layoff start a week or two earlier or have people come back a week or two later. That is a real impact on the economy. We know what will happen. The Green Party has admitted they know what will happen. So why not, instead of waiting for it to happen and then going: “Oh jeez, even though we saw that coming, what could we have done…?” Well, I can tell you what they could have done. They could vote against this. Then we’d never have to worry about that.

The government can figure out how they’re going to find their other $2.2 billion or $2.3 billion — whatever the number is — for this tax that they should never have foisted on people in the first place.

It’s a tax that even their own handpicked task force said not to do. Once again, the Green Party is acknowledging that’s their handpicked task force that’s suggesting that. Even the Green Party is saying: “Look at the other recommendations from that task force. But you know what? We’re going to vote with this bill in the meantime.”

What kind of logic is that? For once, follow through with the courage of your convictions. Stop telling everyone how you’re principled, and stand up in this House and actually take a principled vote. Vote against something that you’ve acknowledged, in your own speeches and debate, is not right, is going to harm your own local businesses and constituents. Do the right thing.

I know we’re going to do the right thing. We’re going to oppose this bill. Let’s hope the Green Party does as well.

M. Stilwell: It’s my pleasure to take my place here in the House to speak to Bill 44, the employer health tax.

What we have here is a Finance Minister and a government who want us to believe that this new tax is about making life more affordable for British Columbians. But instead, what we have, in reality, is a tax that is costing and causing every British Columbian to pay more. In fact, businesses in British Columbia — as we’ve heard from many speakers already today — are being punished, really. The tax is simply going to drive costs up across the province for customers, for taxpayers and for businesses.

Let’s be clear. We’ve heard it already before. But the MSP, under the B.C. Liberals, was on its way out, except it wasn’t going to cost people more money. We weren’t going to be dipping into their pockets and taking from their wallets. This government wants to make you believe that they came up with this great idea for the 50 percent reduction in MSP, like they were some sort of saviour coming to the rescue of British Columbians. In fact, it was the path that the B.C. Liberals were already on.

On this side of the House, we believe in the honest elimination of MSP, offering that real relief for the people of British Columbia. We were on the path of eliminating MSP altogether. How were we doing it? We were doing it with a strong economy that we worked hard to build.

What we see instead with this government is that businesses, municipalities, non-profits, school districts are, in fact, going to be paying twice. That’s right. The government is double-dipping next year. Those businesses, municipalities, non-profits and school districts will be paying both the MSP and the employer health tax.

What they’re actually doing is downloading the costs on the job creators of the province. They say that they’re eliminating the MSP, but that couldn’t be further from the truth. They are simply replacing it with another tax, calling it something different and delivering it in a different way.

You see, that side of the House has chosen a very different approach, a much more expensive path, in fact — one that they claim is and call a fair approach, which I simply can’t rectify with the facts that are in front of me.

[4:55 p.m.]

They’re adding taxes that are going to hurt families. Not just this tax. We heard the other day many of us getting up and talking about the speculation tax, as well, and the government imposing what really, truly is a cabin tax, a wealth tax, an inheritance tax. Call it whatever you want. It’s certainly not a speculation tax. What it is, is a way for that government to generate more money in their coffers. Anyway, I digress.

The first place that this employer health tax is going to hit families is at the local government level. Municipalities across this province have expressed concerns — have written to the minister and have shared their concerns — about the extra costs that are going to add to their bottom lines. Those financial impacts are going to be felt right across the province. We’ve already seen and heard how the city of Vancouver will see a $13 million increase; Surrey, $3.35 million; Richmond, $2.5 million.

In fact, in my constituency, the city of Nanaimo will see a $500,000 increase. I sure can’t wait to see how the newly elected mayor of Nanaimo, the former teammate of the government, will stand up for the citizens in Nanaimo and have those discussions with that Finance Minister. I’m not sure they have a friendship, but he’ll have to have those discussions as he fights for the people of Nanaimo on how this is going to impact them and how more money is going to come out of their pockets.

We know that in order for those municipalities to pay for things, they’re going to have to find a way, whether that’s reducing their services or maybe not putting as much money into upkeeping their parks or increasing fees or, most likely, property tax. Property tax from the homeowners in Nanaimo….

It really can play out in so many ways for the city, a regional district or even a town. Those higher recreation fees or finding a way to generate those extra costs somehow…. There’s only one way to do it: dip into the pockets of British Columbians.

Even Qualicum Beach, a small, little community of less than 9,000 people, has to come up with an extra $100,000. That may not seem like a lot, but for 9,000 people — less than 9,000 people — it’s a fair bit. And it’s going to be passed on to those homeowners. If it’s not the homeowners, it’s going to be the landlords.

Those affordable rentals that the opposition keeps talking about, how they want to help people with their rental market…. Well, if landlords have an increased property tax, they’re going to have to pass that down somehow, and guess what. Rent is going to be increased.

Everyone is going to feel it. The employer health tax is going to make the situation worse when it comes to housing affordability. The list goes on, the costs go up, and affordability goes away.

Each and every one of us here in the House knows that the municipalities will have to find those shortfalls somewhere. Every option that we look at comes back to one place. It comes back to the taxpayer facing those higher costs that make life less affordable, which is what the opposite side, the government side, campaigned on. They made promises to make life more affordable for British Columbians, and that is far from what we are seeing.

In fact, I think it’s really important that we also make mention that when it comes to MSP, two million people in this province didn’t even pay MSP. That’s almost half the population who, based on their income, did not actually even pay MSP. But suddenly, this government seems to be the saviour for those two million people who didn’t have an issue.

For many of those who did have MSP, it was actually their employer who paid the MSP fees. So out of those 2.5 million who were paying MSP, many employers already paid it for them. So they didn’t see the costs either.

The members opposite can only pretend that the rapidly escalating increases in the per-capita tax burden are somehow making life more affordable. Just look what happened when minimum wage was increased.

[5:00 p.m.]

I went to my local coffee shop the next day. There was a sign on the board where they listed all of the different coffees and snacks that they provide — delicious coffee and snacks, I might add. The sign said: “Our apologies to our customers, but due to the minimum-wage increase, we have had to increase our costs.” That’s right. The money has to come from somewhere.

What we have here, with this government, is smoke and mirrors. They may explain that their tidal wave of taxes isn’t on people. “They’re on businesses. We’re not hurting the average British Columbian. It’s okay. Big business will cover it.”

The government says people won’t have to pay MSP and that the companies will, and that’s true. But you know what? Those companies are British Columbians too. The people of British Columbia are still paying. They’re wilfully ignoring, on that side of the House, the fact that driving up the cost for employers is going to have one of two impacts: it will either drive up the price of goods and services that businesses offer, or it will challenge them and lead them to reduce those non-mandatory costs like staff.

Reduced staff. We heard from the member before me. Seasonal staff may be taking that seasonal time off earlier or later and cutting it shorter, cutting hours, finding a way to save the money.

I know for a fact that there’s an employer in Parksville right now who is trying to figure out how he’s going to come up with the extra $100,000 for the employer health tax. He’s currently trying to figure it out. He has a great RRSP program that he offers his employees. He has an excellent benefits package that he offers his employees. Now he’s thinking he’s going to have to back away from those things in order to cover those costs.

We know that it’s hard to run a business. There are very tight margins. It’s really hard to keep employees in your workplace. You have to have some sort of incentive to keep them wanting to be there. And now this great employer who has a great RRSP program is suddenly thinking twice about how he’s going to support his employees. Those perks, like the RRSP contributions, are how they attract and retain their employees.

This government keeps claiming that only a small percentage of businesses will be paying. They say that it’ll be big business footing the bill for the employer health tax. Well, the Canadian Federation of Independent Business looked into that. The new tax will actually be paid by 44 percent of businesses with a payroll. That means 60,000 businesses in British Columbia, most of them relatively small, and they’ll be footing the costs of this bill.

One local business that I spoke with said that the direct cost of the employer health tax will be around $7,100. They’re in a fairly competitive market, so they’re not going to raise their fees to cover the costs. But when they look at the fact that the minimum wage also has a direct impact on them…. The direct and indirect costs of the minimum wage increase are around 2 to 3 percent, costing them about $15,000 to $20,000. So when you combine those additional costs, along with the employer health tax, what they’re looking at is two summer waitressing positions being given up, staff being laid off.

He says it’s not going to kill his business, but the result will be layoffs and increased costs, especially in the restaurant. Prices will go up to ensure that they can cover the additional costs.

Another local employer wrote to me, talking about his concerns. He was born and raised in British Columbia, but he was one of those thousands of British Columbians that, in the ’90s, moved away because British Columbia wasn’t a place to do business. He went to Alberta. But then he came back here about a decade ago, and he built his business — his international, global business. It has flourished because we had a great market for business in British Columbia. We supported the strong economic and free enterprise ideals in British Columbia. He competes with Alberta, Ontario, Mexico, the U.S.A.

[5:05 p.m.]

With those areas now having better and stronger ideals and labour costs and favourable taxation policies, he’s simply looking at this and saying: “My business is global. I’ll just go elsewhere.”

That’s the direct impact these taxes that this government is implementing are having on the people of British Columbia. People are shifting and moving elsewhere, all because of a tax that, on this side of the House, we were prepared to eliminate without creating another tax, without putting more burden on British Columbians.

I mentioned earlier and sort of made the point that many companies didn’t pay their employees’ MSP premiums, and now those are the companies that will be hit the hardest. For them, this is a whole new tax to be paid. It’s going to be doubly hard for those companies who have been paying their MSP because they’ve been helping their employees all along. Those ones will be seeing much of the challenge.

In this scheme that this Finance Minister has cooked up, thousands of British Columbians who didn’t pay MSP pre­miums because they were already covered by the employer will now benefit because — take a deep breath — they’ll no longer have to pay the premiums that they didn’t pay.

It’s mind-boggling to me, quite honestly, the way that this government is having an impact on British Columbians — saying one thing, talking about affordability while they have both hands in both pockets, in people’s wallets.

Affordability is slipping away for families in British Columbia. I have no doubt that families will be paying higher prices. Municipal fees will be going up, all because of the NDP. We’ll be sending more money to municipalities, especially next year, to help fund as they double-dip with both the EHT and MSP being paid.

We can certainly think that the possibility of wage in­creases for British Columbians to help make life more affordable for them is unlikely. It’s not going to happen. There’s no money to give when all of the money has to go to this government with their increased taxes.

The CFIB asked small businesses how they would find the funds to pay this new tax, and 63 percent of them said they would reduce planned bonuses — right before Christmas, something that most employees probably rely on at Christmastime. You can forget that. Sixty-two percent said they would reduce the planned raises, and 46 percent said they would eliminate plans to hire additional staff.

There are going to be impacts all over this province because of this tax that the government is implementing. All of the money that could have gone to raises for people, to help life become more affordable for them, to help those families that this government claims they’re there for, is going straight into the pockets of the Finance Minister, through the tax.

I know that we will have more time to talk about the details of this tax when we get to committee stage. I guarantee there will be lots of questions from many of the members on this side of the House, because I know that we are looking forward to exposing this tax for what it really is — pretending it’s a piece of legislation, something that it’s not. It’s a bill that pretends it’s reducing costs for people when, in reality, it is making life less affordable for people.

It seems to be the path that that government over there has chosen, making life more costly for British Columbians one tax at a time — increasing it, little bit by little bit, with both hands in each pocket, taking a little bit more, a little bit here and a little bit there.

The overwhelming reactions that we have seen from businesses across this province, the Minister of Finance avoiding those hard discussions with them, much of the concerns from the businesses falling on deaf ears, much like the speculation tax….

Our perspective…. From the advice that we’ve been pro­vided by the people that we’ve heard from, the people we’ve spoken to — they’re not happy. Those job creators in our province, those people that make things flourish, that have built this province, those people who employ British Columbians, are being ignored by this government, by this Finance Minister.

[5:10 p.m.]

Their concerns are falling on deaf ears, and it’s just not right. That is why I will stand with this side, with my colleagues, and not be supporting this bill.

J. Brar: It’s a real honour for me to stand up in this House to support this bill, Budget Measures Implementation Act, 2018, introduced in this House by our government. I am really proud to support this bill because I believe in fairness, equality and economic justice for all British Columbians.

We are debating this bill this evening. I have been listening to the members from the other side with full interest, but what I hear is less debate, more fearmongering, more misinformation. That’s what is going on. But people watch on TV. People know what’s going on and what the debate is all about.

It’s very interesting. The member for Parksville-Qualicum, who just finished her speech, said that they were on the path to eliminating MSP. That’s what the member said. I just want to remind the member that you were there for 16 long years, and you failed to do it. You never spoke about that until at the end, when you saw that the end was very near.

Similarly, I saw the member for Kamloops–North Thompson, who just finished their speech before the other member, saying things like: “This government has no concern for the average person.” This is laughable. And: “Small business will pay the tax.” That’s completely false. That’s misinformation, because that’s not true.

Going back to my script here…. With this bill we are moving forward with our plan to eliminate Medical Service Plan premiums. This bill enacts the employer health tax as was announced in Budget 2018.

We made two bold promises to the people of British Columbia during the last election. They were: to make life more affordable and to improve the services people count on. That’s what we did, and that’s what we are delivering with this bill. With this bill, particularly, we are charting a path to a more affordable, balanced and hopeful vision for the people of British Columbia.

Once upon a time, the people on the other side were in power. But for 16 long years, the previous administration worked for the top 2 percent of people. I still remember in 2001, when they came into power, they gave the biggest tax cuts in the history of the province to the top 2 percent of rich people. That was their first action.

On the other side, they cut every service that people depend on. That included health care, education and many other services that the most vulnerable people depend on. That is what the other side of the government has been doing for the last 16 years.

It’s no surprise that under the B.C. Liberals, for 16 long years, B.C. remained the only province in Canada with Medical Service Plan premiums. This was the only province in Canada, in the whole country. And the premiums have been going up, costing families hundreds and hundreds of dollars every year. For too long, families have been struggling with rising MSP fees.

[5:15 p.m.]

The last government chose to double the MSP fees. MSP fees reached a record high in 2016, costing families as much as $1,800 a year. These unfair fees have put a real strain on people. We are working hard to make life more affordable, and we are delivering our commitment to get rid of unfair MSP premiums, and that’s what is happening under this bill.

MSP premiums hit low- and middle-income earners much more than the higher-income earners. The example is very clear. It is unfair that someone making only $42,000 a year pays the same amount as someone making $250,000 a year. That’s what the problem with this tax is. That’s why the other side wants to keep this tax, because they want their friends who are making $250,000 a year to pay almost the same amount as paid by somebody who is making only $42,000 a year. That’s the debate that we are talking about here.

After years of rising MSP premiums, people deserve a break. Our government wants a better B.C. for each and every person in this province. As we announced in the February budget, we believe it’s time for a different approach, an approach that puts people first and makes life more affordable. We are delivering on our commitment to the people of British Columbia and giving them the break they need.

We are moving forward with eliminating costly MSP pre­miums and introducing the employer health tax under this act. Together these measures will reduce taxes by approximately $800 million each year, one of the largest tax cuts in B.C. history for the people, as compared to the other government. They gave the largest tax cut to the top 2 percent. That’s the difference between the members on the other side and the members on this side of the House. That’s the difference.

Families. It will make a difference to families, as much as $1,800 each year. Just imagine what a $900 saving can do for a person. That is equal to a senior’s grocery bill for two months, three weeks of daycare for a child, winter boots and coats for a family of four, ten months of electricity bills for the average home and ten months of bus passes. Those are big things for those people. They may not count that, but those are big things for many, many people in this province, and that’s why we are doing it, making life better for the people.

As a result, millions of people will have more money in their pocket and more to invest in B.C. businesses. That’s how we are going to create a better sustainable economy in the province of British Columbia.

The employer health tax will generate revenue to partially replace MSP premium revenues to support the critical health care services that the people of our province depend on. This bill enacts an annual tax, as other provinces have done, effective for 2019 and the subsequent calendar year, based on the employer’s B.C. payroll.

We are also protecting small businesses that are the cor­nerstones of our communities and the sustainable economy. Employers with a B.C. payroll under $500,000 will not be required to pay this tax. I just want to say that again. The member who just finished, from Kamloops, said that small business will pay the tax.

[5:20 p.m.]

I want to make it absolutely clear. The employers with a payroll of less than half a million dollars, less than $500,000, will not pay the employer health tax. That is almost 80 percent of the businesses in this province. Employers with B.C. payrolls between half a million dollars to $1.5 million will have their rate phased in, and employers with a B.C. payroll greater than $1.5 million will pay 1.9 percent of their total B.C. rates.

To recap, less than 5 percent of B.C. businesses will pay the full employer health tax rate of 1.9 percent. Less than 5 percent of B.C. businesses will pay the full rate. The majority of small businesses are protected with the half-a-million-dollar exemption amount that is phased out gradually. So it’s very clear that small businesses are not going to pay this tax. With this tax, B.C. will be tied with Ontario for the lowest tax rate in the country.

This bill also recognizes the unique role of charities and non-profit organizations in our society. Similar to other prov­inces, charities and non-profits with multiple locations will be eligible for an exemption for each location. For example, one of the organizations where I started my career is PICS, which is the Progressive Intercultural Community Services Society, based in Surrey, but they also have a branch in Vancouver. As for this bill, they should have exemption for two different locations.

Charities and non-profit organizations will benefit from a higher exemption amount. The legislation also establishes a $1.5 million exemption amount for charities and non-profit organizations. In other words, 90 percent of the businesses with a payroll less than half a million dollars will not pay any employer health tax, and charities and non-profit organizations with less than $1.5 million are exempt from the employer health tax. It’s absolutely very clear.

I have no idea why member after member standing on the other side continues to say that small businesses are going to pay this tax. That is absolutely wrong. That’s misinformation, and that’s not true.

The bill also establishes how the tax will be administrated and enforced. The administration of MSP was costly and inefficient, and transitioning to the employer health tax will save more than $50 million annually. We know that dealing with the MSP bill has been burdensome for businesses and for families too. Today I’m proud to say that effective January 1, 2020, there will be no more MSP bill taking money out of people’s pockets. Effective January 1, 2020, there will be no MSP in B.C. That will be gone; that will be eliminated. That’s the promise we made during the last election to the people of British Columbia, and that’s what we are delivering with this bill.

To conclude, the last government chose to double MSP fees, costing families hundreds of dollars a year. People deserve a break, which is why we are eliminating regressive MSP premiums. The B.C. government will eliminate MSP premiums by January 1, 2020, saving individuals up to $900 each year and families as much as $1,800 a year. As a result, millions of people will have more money in their pockets and more investment in B.C. businesses.

We are committed to make life better, to make life more affordable and to improve the services people depend on. That’s why I stand here, and I am very proud to support this bill, because this bill is the right direction to go, and this bill brings some fairness and also makes life more affordable for the people of British Columbia.

[5:25 p.m.]

M. Morris: I listen with interest to some of the comments that the government members make. The member who just spoke said that they promised to eliminate the MSP, but what they failed to tell everybody is they were going to hose all of the employers to make the difference in those costs there.

Half the population of B.C. weren’t paying MSP premiums anyway, and those in low income brackets were supplemented. We had said publicly that we were eliminating MSP over time as the economy progressed. That was our intention. The folks of British Columbia would have been far better off under the model that we were proposing rather than another hand in the pocket by this government.

I want to go back into time a little bit, if I could, and sort of set the stage for some of the things I am about to say, because of my critic role as Public Safety but also because of my previous history and my experience in the RCMP and policing in this province.

I go back to the years 1998 to 2001, when I was a district officer for the northern 80 percent of the province. Under my area of responsibility, approximately 45 detachments, I had a patrol vessel in Prince Rupert, a 75-foot patrol boat, and a couple of aircraft in the district. We provided services to all the RCMP members throughout the province.

I was also a member of the division executive committee, so I would meet on a regular basis with all the other senior managers in the province dealing with budgets and resource deployment and whatnot. That was in 1998, when I got into that senior management role, up until 2001, when the government changed.

That was under the NDP government back in those days. What I found extremely frustrating, as my colleagues in the RCMP did at the time, and as everybody serving the public in B.C…. The NDP government would set the budget, and we would collectively sit down, and we would talk about what we would do as managers to try and work within the confines of the very restricted budget that the government had given us, and we would allocate the resources.

Within two or three months after we would do that, the NDP government would come back, and they would say: “We want to claw back 4 percent or 2 percent or 6 percent.” When we were already dealing with finite resources, that had a significant impact on how we did business. Manpower shortages were critical to us at that time.

What we ended up having to do in order to meet those clawbacks that the NDP government of the day imposed on us…. We had to park police cars. We had to keep vacancies in various provincial positions across the province. We had to keep our aircraft on the ground. We couldn’t provide that aerial service that is so critical, particularly in some of the more remote detachments that we have, to provide that level of safety, that response that was required in those areas.

We had to keep our boats tied up at the dock because we couldn’t afford to put fuel in the patrol vessel to patrol over to Haida Gwaii and to patrol the west coast of the province that was susceptible to drug smuggling, susceptible to, at that particular time, a lot of illegal immigrants coming in on the various types of vessels that we had. It was critical.

The reason I’m bringing this up is because it pertains to the policing environment that we have in British Columbia today. Policing has been maxed out, with respect to budgets, with respect to personnel, with respect to workload. The complexities of policing have increased enormously over the last 30 years, more than 30 years, mostly since the implementation of the Charter of Rights and Freedoms in 1982 had a significant impact on how investigations are done in the province.

Investigations are expensive. Prior to me becoming the overall manager for the north district in 1998, I was the operations officer for that area. My responsibilities at that time included oversight of undercover operations, major investigations, wiretap operations, civil disobedience issues throughout the northern part of the province.

[5:30 p.m.]

The courts don’t look at budgets when they request that the police do things in a certain way. The jurisprudence certainly doesn’t take that into consideration. When an RCMP member files an application for a part 6 application, or a wiretap application, under the Criminal Code, there’s a lot of work that goes into that prior. There’s surveillance.

The courts, basically, at that time when I was reviewing this, said that we have to exhaust all available means of investigative techniques prior to the courts granting that wiretap. So there was hundreds of hours of investigation. The surveillance team sometimes would be comprised of a dozen, two dozen members that would be following these targets around for days, weeks, months on end in order to compile the data necessary for the wiretaps at that time.

Those things are still going on today, but technology has increased even more, with cellphones and wireless communication devices. It’s very expensive.

Today the authorized strength for the provincial RCMP in British Columbia is 2,602 members. That’s from the 2018 estimates, which I had with the minister earlier this year. In estimates, the Public Safety Minister also advised that they pay $400 million for salaries, based on the provincial members. That’s based on 70 percent dollars.

You see, the contract that the province has with the federal government for the RCMP is for provincial policing resources right across the province. The province will pay 70 percent of the costs, and the federal government will pay 30 percent of those costs. So $400 million for salaries based on that 70 percent. When you add the federal government costs, the other 30 percent, we’re sitting around $600 million for RCMP salaries for those 2,602 positions.

If you look at the 1.95 percent payroll tax that’s attached to that, that’s about $12 million in extra money that the RCMP has to pay in order to cover those costs. When you look at the fact that in addition to the 2,602 RCMP members, we’re probably going to have at least 2,000 or 3,000 public service employees that supplement that, that provide a supplementary service to help those folks out to make sure that they can get out there and get their job done.

These are the administrative assistants, the clerks, the typists. These are the people that sit there and listen to the wiretaps coming in. So when you look at the salary dollars that are attached to them, we could probably add another $12 million or more in the employer health tax that the RCMP is going to have to pay — that the province is going to have to pay.

We’ve got committee stage coming up on this bill, and one of the questions that I want to put to the Finance Minister is if there are any plans to supplement the policing budget in British Columbia to help this out. Because if you take $25 million out of a policing budget, that affects the rotable resources that we have.

We might go back to the 1990s, when I was a senior manager, where we had to park police cars. We didn’t have enough money to put gas in the tank. Park airplanes. Park the helicopter that provides such a valuable service for an urban environment like the Lower Mainland here. Park the vessels that we have patrolling the west coast, the catamarans that we have going up and down the west coast to do the job that they have to, to provide the service to the remote islands that we have.

The province also pays…. We have First Nations policing agreements with the federal government. Again, this is another area that the province is lagging behind on. The province pays 48 percent of the salary dollars for our First Nations policing positions that we have. We have 203 First Nations in British Columbia, but the federal government is only funding 90 positions for those 203 First Nations communities that we have. Many of them are remote.

The province is funding a few, up to about 103 positions, I believe, in total. So the province is paying those salary dollars. There’s about $10 million worth of salary that has been paid by the province for our First Nations positions.

[5:35 p.m.]

If you take that 1.95 percent of that $10 million and you add that to the mix and you add that to the provincial dollars that we’re paying. We’re in that $25 million to $30 million of provincial money that’s going to pay the employer health tax. That’s taken right out of provincial policing budgets across this province.

[Mr. Speaker in the chair.]

That’s only part of the story. The other part of the story is that we have over 6,000 police officers in British Columbia that work under a municipal contract — 6,000. The costs…. I get this from Police Resources in British Columbia. It’s a publication that is published every year. The costs of policing our municipalities, for municipal policing services, is just under $1 billion a year. Most of that is in salary dollars. If we look at the money that we’re spending on municipal policing services…. In British Columbia, we’ve got 64 municipalities under RCMP contract, and we’ve got 12 independent police forces on top of that.

Those police forces run off of municipal budgets. Under the municipal policing agreement, which is part of the provincial policing agreement with Ottawa, with the RCMP, municipalities of over 15,000 people pay 90 percent of the policing costs, and the federal government chips in 10 percent of those policing costs. The independents pay 100 percent of those policing costs.

We have communities like Surrey, which pays about $150 million a year for policing. I would dare say that the majority of that is salary dollars. Surrey is — and it’s been identified already — under-resourced from a policing perspective. You take $150 million and you multiply that by 1.95 percent, and there’s a big chunk of change that is going to go back to this provincial government for employee health tax. Those are just for the uniformed members. That’s not counting at least as many members working in a support role within the detachment itself.

Nanaimo — $29 million a year for policing. Most of that is going to salaries. It’s going to increase the budget for policing in communities like Nanaimo and Surrey. Guns and gangs are a real problem in Surrey. The money that this government is sucking out of those communities in order to cover off the employee health tax could better be spent on increasing resources and attacking the guns and gang strategy that we have in those communities.

The provincial side of policing is probably a little bit worse off than the municipal side. On the provincial side, the only option they have is for the province to say we’re not going to take the employee health tax off of provincial policing resources, or they’re going to increase the RCMP or the provincial policing budget to augment those decreases. But municipalities have an option, and a lot of them will be exercising that option. That’s where they increase their property taxes, at the behest of the provincial government, in order to cover off those costs.

I know in my community in Prince George, the employer health tax is costing them something like $1.4 million. I expect to see a hike in my property tax on my home in Prince George, as will every other homeowner in Prince George, to try to cover off these costs.

One of the frustrating things, when I was in the RCMP as a senior manager, is that the Police Act forbade us to criticize any level of government. That applies to all the police jurisdictions in British Columbia. So in policing, they’re pretty quiet. You suck it up, and you carry on and do whatever you have to do with the money and resources that you have at the end of the day. You try to put the bad guys in jail with the resources that you have. But there’s a lot that you just can’t get to.

To compound the pressures that the police are already under in this great province of ours by sucking the tens of millions of dollars out of policing budgets right across the province to cover off the employer health tax is unfathomable.

Policing agencies right across the board triage all of the major investigations that come in — homicides, the sexual assaults, the money-laundering complaints that the Attorney General has complained about so vehemently, the sexual abuse, the domestic assaults that take place in our northern communities. They’re all triaged.

[5:40 p.m.]

There are not enough resources to go around in this province to address the amount of crime that’s coming in. On top of that, I’ve got to say that when you look at the money that is being paid out — over 25 million bucks in the provincial policing budget to cover off the employee health tax right across the province — that would go a long way to providing the extra resources for policing in the province.

The government, right now, is keeping about 250 provincial policing positions vacant in the province because they’re not budgeted for. The cap is 2,602 positions, the agreement that they have with the federal government, but they have reduced that by about 250 positions because they never budgeted for it. If you take that money that they’re trying to suck out of the police budgets already, that’s enough to put another 160 or 170 police officers back into rural policing, if they were able to do that.

Instead, they’re taking that money out. They’re going to make it harder for people to respond to the domestic abuse and those types of situations that we have in rural B.C. They require so much attention and so many resources in order to attend to those kinds of things.

I’ve got several more. I’ll carry on for a couple more minutes here.

Particularly, policing is near and dear to me. I’ve got a passion for it. I also know the struggles the men and women out there are trying to do in order to get their job done every day, with limited amounts of resources to get those investigations done in a technical, elegant way so that they get more convictions in court and we can put more of the bad guys in jail.

By taking more resources out of the system, we’re compromising those investigations. We’re compromising the health and welfare of the police officers that are out there on the line every day trying to help us out. I don’t think this employer health tax is helping out that situation in any way, shape or form.

I’ll probably speak a little bit more on this when we come back, but noting the hour, I’d like to reserve my place, and I move to adjourn the debate.

M. Morris moved adjournment of debate.

Motion approved.

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until Monday, October 29, at 10 a.m.

The House adjourned at 5:43 p.m.