VICTORIA, B.C.: A bigger than expected budget surplus won’t spare British Columbians from yet another Medical Services Premium (MSP) tax hike – the sixth in five years, the Canadian Taxpayers Federation (CTF) noted Tuesday at the B.C. Budget in Victoria.
The MSP tax will go up again on January 1. A family of three or more will pay $150 per month in health care tax, up $6 from 2015, and up nearly 40 per cent in just five years. Couples will see their monthly MSP tax go from $130.50 to $136, and singles move from $72 to $75.
“The MSP tax is a big cost for families and a drag for job creators, yet we get this same tax hike year after year – it’s a costly version of Groundhog Day in Victoria,” said Jordan Bateman, B.C. Director for the Canadian Taxpayers Federation. “The Minister tries to link MSP hikes to increased spending in health care, but this year’s 4.2 per cent increase to the MSP is more than inflation and more than the increase in the health care budget.”
The MSP hike comes on top of ICBC, BC Ferries and BC Hydro rate increases, making it more expensive to live in B.C. While the B.C. Budget document references a desire for a “one-taxpayer funding approach to affordability” (p. 43), continual hikes in fees and levies prove otherwise.
The CTF commended Finance Minister Michael de Jong for delivering a third straight balanced budget, and for exceeding last year’s expectations with nearly a billion dollar surplus.
But B.C. debt continues to grow, dragging down the economic benefits that should come with strong fiscal prudence. The B.C. debt, at $63.8 billion, is projected to top $70 billion in 2018. Just eight years ago, the debt was $33.4 billion.
“While the government has slowed the amount of debt it plans to add in the coming years, it’s still growing,” said Bateman. “B.C. needs a debt reduction plan, enshrined in legislation, to help turn the tide. All the warm and fuzzy intentions in the world mean nothing if debt continues to grow.”
The provincial government accepted a CTF budget recommendation, announcing it will wean itself off of BC Hydro dividends in the coming years. However, the phase out won’t start until 2017-18.
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