Finance Minister Carole James is beginning to phase out Medical Services Plan premiums, which accounted for 17 per cent of B.C. health care spending in the past year. (Tom Fletcher/Black Press)

End is near for B.C. medical premiums

Break of $900 a year for average working couple, other taxes going up

The B.C. government takes its first step toward eliminating Medical Services Plan premiums on Jan. 1, slashing single adult rates by half and eliminating the need for new residents to register.

The NDP government is implementing an election campaign promise first made by the B.C. Liberals, who tinkered with Canada’s only user fee for medical services for years before announcing plans to phase it out last spring.

The Canadian Taxpayers’ Federation calculates that the reduction will save an average household with two adults $900 per year, and applauds the NDP government’s promise to eliminate MSP entirely within four years.

Kris Sims, B.C. director for the CTF, notes that the MSP break will soon be offset by tax increases, including the first increase in five years to B.C.’s carbon tax. That tax rises to $35 per tonne of carbon dioxide emissions as of April 1, translating to an increase from seven to 8.5 cents on a litre of gasoline and more than 10 cents per litre on diesel fuel.

Finance Minister Carole James announced in September that the NDP government is going beyond the 50-per-cent cut to MSP promised by both parties in the May 2017 election. She said the B.C. Liberal pledge to apply the rate cut only to those with household incomes below $120,000 is “unworkable,” and announced plans to scrap the income-tested application form.

Single adults with income above $26,000 and couples with two children earning more than $35,000 will still have to pay the reduced rate in 2018, on a sliding scale based on household income.

Phasing out MSP leaves a large hole in the province’s health care budget. The finance ministry estimated last year that income from medical premiums covers 17 per cent of health costs, by far the largest operating expenditure in the B.C. government, and James has yet to say how the revenue will be made up.

Eliminating MSP also means the phase-out of its administration and bill collection, which was contracted out to U.S.-based back-office specialist Maximus Corp. in 2005. Maximus took over existing administration staff represented by the B.C. Government Employees’ Union, and had to add more staff after B.C. assessed penalties on the contractor for slow service to the public.

The NDP has long opposed MSP as an unfair tax that has the same rate for people earning $45,000 and $450,000 a year. For government and large corporation employees, it is generally a payroll tax paid by their employers, while self-employed and small business workers have to pay it out of pocket.

Just Posted

Unintentionally trapped cougar safely released near Williams Lake

Conservation officers tranquilized and transported it a short distance before watching it walk away

Local basketball star Annika Parr selected as alternate for Team BC’s U14 squad

Parr is excited about the possibility of playing in Halifax

Snowfall warning continues for parts of B.C.’s Interior

First significant snowfall of the season prompts Environment Canada warning

Hagensborg Water District ratepayers vote to dissolve district

In a close vote of 68 to 63, ratepayers have chosen to dissolve the water district

Bella Coola residents rely on food bank support

Your volunteers at the food bank work year-round, but are especially busy at Christmas

B.C. woman charged in connection to stolen vehicle smash-up in Kamloops

Kersten Ina Peters was arrested in the Fraser Valley on Friday, Dec. 6

Tavares scores twice as Maple Leafs earn 4-1 win over Canucks

Vancouver sees two-game win streak snapped

UPDATED: No survivors in Gabriola Island plane crash: RCMP

Coroner confirms multiple fatalities after small plane goes down Tuesday night near Nanaimo

VIDEO: Harbour Air makes history with first electric aircraft test flight

Successful flight marks first of its kind in the world

The Grinch who Stole a Hedge: Security camera captures Chilliwack tree theft

RCMP arrives as person calmly walks away with tree in downtown area

Salmonella outbreak in Canada linked to rodents and snakes

92 cases of salmonella across six provinces, including B.C.

Meng Wanzhou wins right to more documents involving arrest at Vancouver airport

Defence lawyers allege the Huawei executive was unlawfully detained, searched and interrogated

Toronto Raptors, Don Cherry top the list of Canadians’ Google searches in 2019

‘Champions’ was the theme of the last year, Google said

B.C. patients wait 41% longer than national average to see a walk-in doctor: Medimap

The longest wait time was found in Sidney, B.C., where patients waited an average of 180 minutes

Most Read