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

‘Actors can play any roles’: Debate over ‘colour-blind’ casting after Victoria lawsuit

Tenyjah Indra McKenna filed a complaint over racially-motivated casting

Community works to feed hungry kids at Journey Middle School

School staff and Sooke Lions Club form unique partnership

Saanich mayor urges premier to tweak road speeds in an ‘epidemic of road crash fatalities’

Haynes cites ICBC and provincial documents in letter to John Horgan

Second cyclist struck during morning commute in Greater Victoria

Saanich crash involving a cyclist at the Braefoot Road, Epsom Drive and Cedar Hill Cross Road intersection

Sunny skies ahead for Thursday

Plus a look ahead at the weekend’s forecast

VIDEO: UBC exchange students offered $1,000 to help with leaving Hong Kong

The university said 31 of its students were attending four universities in Hong Kong

12 Sooke events to get you into the holiday spirit

From a Santa parade to classicial music, Sooke has it all

Victim of downtown Courtenay assault dies from injuries

Person of interest identified by RCMP

Infants more vulnerable to measles than previously thought: Canadian study

Babies typically don’t receive the measles vaccine until they are 12 months old

Shatner, Obomsawin among 39 inductees to Order of Canada today

Shatner is being given one of Canada’s highest civilian honours for his 60-year career

John Mann, singer and songwriter of group Spirit of the West dead at 57

Mann died peacefully in Vancouver on Wednesday from early onset Alzheimer’s

Teacher tells B.C. Supreme Court that student was ‘happy’ to watch smudging ceremony in classroom

Case being heard in Nanaimo over indigenous cultural practice in Port Alberni classroom

VIDEO: B.C. high school’s turf closed indefinitely as plastic blades pollute waterway

Greater Victoria resident stumbles on plastic contamination from Oak Bay High

Four arrested after report of shots fired in Nanaimo

RCMP arrest four suspects in high-risk takedown in Cedar

Most Read