New B.C. health payroll tax bad news for restaurateurs

Toronto, Ontario, CANADA


Victoria, Feb. 21, 2018 (GLOBE NEWSWIRE) -- B.C.’s 2018-2019 budget introduced a number of new taxation and spending initiatives, including carbon tax increases that are no longer revenue neutral. However, Restaurants Canada believes that phasing out Medical Service Premiums (MSP) by 2020 and replacing MSP fee revenue by imposing a new health payroll tax on businesses in January 2019 will hurt restaurateurs and their ability to grow employment as B.C.’s third largest private sector employer.

"Economic research makes it clear that payroll taxes kill jobs and this new payroll tax will do just that," says Mark von Schellwitz, Vice President, Western Canada. “This new payroll tax, in combination with significant increases to the minimum wage over the next couple of years, will add sizeable new labour costs to the hospitality industry which will force restaurateurs to reduce employee hours or increase prices to recoup these mandated costs," added von Schellwitz.

Only small business employers with a payroll of less than $500,000 will be exempt from the new health payroll tax. Businesses with a payroll between $500,000-$750,000 will pay a .98% payroll tax, those with a $1 million payroll will pay a 1.46% payroll tax, those with a $1,250,000 payroll will pay 1.76%, and those with a payroll of $1.5 million or more will pay a 1.95% payroll tax.

“Restaurants Canada is disappointed that the B.C. government is shifting more of the tax burden onto small business job creators. We are very concerned that this tax measure will impact future industry investment and growth,” concluded von Schellwitz.

Restaurants Canada is a growing community of 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast, through services, research and advocacy for a strong and vibrant restaurant industry. British Columbia's restaurant industry directly employs 174,000 British Columbians and has total annual sales of $13 billion.

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