Health Minister Adrian Dix, Premier John Horgan, Finance Minister Carole James (Supplied by Government of BC)
So long, MSP.
Your December Medical Services Plan bill will be your last one as the NDP government fulfills a campaign promise to put an end to the tax.
“The cost of health care should not be a burden on people, but for too long, unfair MSP premiums made it hard to get ahead,” said Premier John Horgan. “Our government is making different choices and we’re working to make life more affordable for people in B.C. This represents one of the largest middle-class tax cuts in B.C.’s history and will make a big difference in people’s lives.”
As of Jan. 1, 2020, MSP premiums will be fully eliminated. Government took the first step towards elimination with a 50% cut in premiums as part of the Budget 2017 Update. Budget 2018 and Budget 2019 provided the road map to one of the largest tax cuts for middle-class British Columbians in B.C.’s history.
“For decades, people in our province had to pay unfair MSP premiums instead of using that money to buy food, help pay the rent or even put their child in after-school care,” said Carole James, Minister of Finance. “With the complete elimination of MSP premiums, families have more money for themselves and to invest in B.C. businesses. This is good for British Columbians and good for B.C.’s resilient, sustainable economy.”
The government says the elimination of MSP premiums represents a net tax cut of $800 million. Individuals will save up to $900 a year. Families will save up to $1,800 a year based on the pre-2018 rates.
“The people of our province should be able to access British Columbia’s world-class health care system without having to worry whether or not they can pay their MSP premium,” said Adrian Dix, Minister of Health. “With this last bill, people will continue to receive the health care they deserve, while enjoying their savings as a result of the MSP premiums being eliminated.”
MSP beneficiaries who have auto-payments through their financial institution are reminded to cancel that arrangement to ensure payments to the Province do not continue. They are also reminded to keep their accounts up-to-date with MSP, including address changes.
Before fully eliminating MSP premiums, B.C. was one of the last provinces in Canada to have user premiums for health care. It’s estimated the provincial government’s administrative savings from eliminating MSP premiums will be over $50 million annually.
The MSP is being replaced with the Employer Health Tax. Employers with a payroll of more than $1.5 million in British Columbia will pay a rate of $1.95 per cent on their total payroll. Lower rates apply to employers with lower payrolls and those below $500,000 are exempt.