B.C. Families Face $84 Medical Services Premium Tax Increase

VANCOUVER, B.C.: The Canadian Taxpayers Federation (CTF) is warning of significant payroll tax hikes coming on January 1st.  A family with children will see their monthly Medical Services Premium (MSP) tax bill go from $121 to $128, an increase of $84 a year. Further, federal EI and CPP increase by $306 per employee, just under half of which will be covered by the employee themselves ($142). “Both Ottawa and Victoria are digging deeper into our pockets this year,” said CTF’s British Columbia director, Jordan Bateman. “The ever-increasing MSP tax is a significant concern for many British Columbians—this is the third significant jump in two years.” The $306 hike in federal payroll taxes is the second-largest one since the CTF began tracking these taxes in 1994. Details on the CTF calculations on federal payroll taxes can be found at http://taxpayer.com/sites/default/files/Payroll%20Taxes_0.pdf.

On December 31, 2009, B.C. families paid $108 a month in MSP tax. That increased to $114 on January 1, 2010, and again to $121 on January 1, 2011. This year’s additional hike means families have seen their MSP tax bills go up 18.5 per cent in two years.  “Families and seniors are already finding it difficult to keep up with rate increases at BC Hydro, ICBC, BC Ferries and tax hikes at the gas pump,” said Bateman. “These MSP, CPP and EI increases are yet more weight added to the tax burden.” The MSP tax generates $1.9 billion a year for the province, but the truth is almost half the taxes in B.C. are a health care tax—the health care system eats up 43 per cent of government spending. “Very few politicians and public sector employees pay the MSP tax, so they don’t understand the big deal,” said Bateman. “But entrepreneurs, small business owners, middle class families and even those private sector employees lucky enough to have an employer pick up their MSP tab, know what a bite this is out of their pockets.” For further details and calculations for the impact of tax changes occurring on January 1st, please visit: http://taxpayer.com/federal/ctf-releases-nation-wide-tax-changes-new-year