A new tax will force future councils to either raise taxes or cut services, according to a report from the Union of British Columbia Municipalities

Report predicts health tax will bleed Saanich’s coffers

Saanich CAO says belt tightening not enough to absorb new costs. “We would have to amputate a limb.”

A new report says Saanich faces several difficult choices with the introduction of the new Employer Health Tax (EHT), according to a new report from the Union of British Columbia Municipalities (UBCM).

The provincial government plans to eliminate Medical Services Plan (MSP) premiums paid by each British Columbian (unless exempt) and replace them with the EHT paid by employers with 2019 as a transition year during which the provincial government will collect both MSPs and the EHT.

The report predicts Saanich residents and businesses will feel this “significant” impact on municipal finances as the new tax leaves Saanch with a menu of politically unappetizing choices.

Saanich, according to the report, will pay $1.78 million to cover the new EHT plus $209,000 for employee MSP premiums with Saanich planning to split the additional cost between property taxes and user fees. Property taxes would rise 1.3 per cent. “In subsequent years, the tax will rise in step with collective agreement settlements that are currently two per cent to 2.5 per cent,” it reads.

If Saanich were to absorb the increase by reducing its operating budgets, it would have to cut at least 15 positions, leading to a corresponding cut in service levels. Saanich, alternatively, could also reverse past efforts to put aside away funding for future infrastructure replacements.

But comments from chief administrative officer Paul Thorkelsson suggests Saanich would find it difficult to absorb the increase without raising taxes.

“Saanich cannot manage a property tax increase [of 1.3 per cent] from this additional expense through simple ‘belt tightening,’” he said. “We would have to amputate a limb.”

The EHT could also increase levies that Saanich residents pay towards other agencies, such as the Capital Regional District also subject to the EHT and facing the same challenges as Saanich to fund it.

The report issues an especially dire warning for some local entrepreneurs. “The impact on Saanich’s medium to large business property owners is twofold as they face paying the EHT directly on top of any property taxation increases that may be implemented,” the report reads.

While Saanich could place the burden exclusively on residential properties, such a move would “likely”meet strong resistance. [“Ninety-two] per cent of Saanich’s assessment base is residential and due to low non-market revenue in recent years, annual tax increases are trending over [three] per cent,” it reads.

The report notes that the introduction of the EHT also robs Saanich of a bargaining chip in future labour negotiations, as employer-paid MSP premiums represent a negotiated benefit.

“Where property tax currently funds only a small portion of the premiums for some staff, a shift to the health tax confers a considerable benefit without any bargaining and passes the cost on to Saanich property owners,” the report reads.

On balance, it confirms concerns that staff and members of Saanich council have already expressed, and the UBCM report duly notes that may “local governments are questioning a tax policy that results in the funding of a provincial service (healthcare) through property taxation.”

Whether Saanich will be able to do anything remains up in the air.


Like us on Facebook and follow us on Twitter

wolfgang.depner@saanichnews.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Improperly transporting a pet in the back of the truck can cost up to $368

Police recommend keeping all animals inside the passenger portion of the vehicle

Mass-timber project in Esquimalt switches from condos to rentals

Corvette Landing will now offer rental units in the area

VIDEO: Royals squashed by Giants in 6–2 loss

Victoria will leave for six-game road trip, returns home Feb. 7

Minister of state promises to look into closure of North Saanich child-care program

Closure of Beacon’s Nature Club affected two dozen families

‘Like an ATM’: World’s first biometric opioid-dispensing machine launches in B.C.

First-of-its-kind dispensing machine unveiled in the Downtown Eastside with hopes of curbing overdose deaths

Canucks extend home win streak to 8 with 4-1 triumph over Sharks

Victory lifts Vancouver into top spot in NHL’s Pacific Division

BC Green Party leader visits northern B.C. pipeline protest site

Adam Olsen calls for better relationship between Canada, British Columbia and First Nations

‘Extensive’ work planned at Big Bar landslide ahead of salmon, steelhead migration

Fisheries Minister Bernadette Jordan visited the site of the slide from June

B.C. society calls out conservation officer after dropping off bear cub covered in ice

Ice can be seen in video matted into emaciated bear cub’s fur

Royal deal clears way for Harry, Meghan part-time Canada move: experts

Keith Roy of the Monarchist League of Canada said the deal is exactly what Harry and Meghan asked for

Horgan cancels event in northern B.C. due to security concerns, says Fraser Lake mayor

The premier will still be visiting the city, but the location and day will not be made public

PHOTOS: Eastern Newfoundland reeling, search underway for missing man after blizzard

More than 70 centimetres of new snow fell overnight, creating whiteout conditions

Most Read