The Chilliwack Chamber of Commerce shares mixed views alongside the BC Chamber and many other Chambers of Commerce and Boards of Trade across the Province regarding yesterday’s announcement of the Provincial Budget.
The Vancouver Board of Trade gives the BC Budget a C+ rating based on four criteria; Fiscal Prudence (B+), Cumulative Impact on Business (C-), Transit, Transportation and Infrastructure (B-) and Housing and Affordability (B+)
BC Chamber suggests a meaningful investment in both housing attainability and childcare- two areas of deep interest to the Chamber network; however, it leaves the business community to pick up a $1.92 billion dollar tab on MSP by the fiscal year 2020.
Key Highlights of the Budget:
– Budget is balanced, but looks to be balanced on the back of business
– The provincial government makes key investments in housing attainability and available childcare, but business is facing the cumulative effect of crippling tax increases that will challenge their ability to invest and grow.
– Businesses will be footing the bill to the tune of almost $2 billion by 2020-21 to cover the full phase-out of MSP premiums. This new tax will have a negative effect on growth and investment.
– Only some of the increased Carbon Tax revenue collected will be focused on support for emission intense industries to transition to a low-carbon economy.
– Budget 2018 does include the BC Chamber network recommendation to leveling the playing field by allow online accommodation platforms to collect and PST and MRDT.
A Comprehensive Housing Plan
The provincial government is investing $1.9 billion over 3 years and we’ll see up to $6 billion over 10 years, which will help build affordable housing, including homes for growing families, homes for seniors, housing options for women and children fleeing violence and student housing.
This total $6 billion investment will result in a total of 33,700 units of housing – over half of those units being affordable rental housing. Investing in Childcare
The provincial government will invest $630 million over 3 years to help deliver affordable child care through licensed providers and a further $237 million to create more space.
Elimination of MSP Premium; Decreased Revenue Replace with “Employer Health Tax”
Effective January 1, 2020, MSP Premium will be eliminated for all British Columbians. To pay for the elimination of the premium, the provincial government will create an “Employer Health Tax.”
While the government put a de minimis of $500,000 or less payroll – and a sliding scale for businesses with payroll between $500,000 and$1.5 million – to minimize the impact on small business, this will still be a $1.92 billion tax increase by 2020.
|Small Business Payroll||Tax as % of Payroll||Revenue hit to bottom line|
The biggest concern with this policy shift is that business is now the only contributor to this health care top-up, while individuals pay nothing for a system where the individual receives the greatest benefit.
When taken in conjunction with the loss of revenue neutrality, the increase of the Carbon tax, and increases to both minimum wages and the corporate tax rate; businesses of all sizes are facing the cumulative effect of crippling tax increases that will challenge growth and investment.
“Our economy grows when businesses are supported, taxes remain competitive with global competitors such as the US, and businesses are optimistic about hiring and investing”, says BC Chamber President, Val Litwin.
For further details, please contact:
President Chilliwack Chamber of Commerce