The Juice Truck co-owner Ryan Slater estimates that covering employees’ MSP premiums will cost his business $25,000 a year
New taxes are making it tough for companies to grow and invest, says BC Chamber of Commerce head Val Litwin
As the cost of doing business in B.C. keeps rising, the owners of tens of thousands of small to medium-sized enterprises are being forced to think twice about making their next hire.
Recently I’ve connected with our members in Fort St. John, Pemberton, Whistler and the Lower Mainland. They hail from different parts of the province and represent various sectors, but their concerns about the dogpile of taxes from our provincial and federal governments are the same.
The dogpile consists of the province’s proposed Employer Health Tax (EHT), which will shift roughly $2 billion of the total $2.6 billion annual Medical Services Plan (MSP) tab entirely onto employers by 2020-21; the loss of revenue neutrality on the B.C. carbon tax—which is already the highest in North America—and its increase to $35 per tonne from $30 on CO2 equivalent; an 11.5-percent increase in minimum wage (a move we didn’t oppose) and a 1 percent corporate income tax hike; increases to Canada Pension Plan contributions; and federal small business tax changes.
It’s also worth noting that these increases are being introduced against a backdrop of uncertainty as B.C.’s provincial labour code is under review and WorkSafeBC policies and regulations could shift, translating to increased costs and employer premiums.
The total tax burden, along with this new era of uncertainty, will challenge owners’ ability to invest and grow their businesses in B.C. as they are continually being asked to contribute more. Some of our members have expressed frustration that while they’re growing their businesses, they aren’t profiting. The unfortunate question practically asks itself: if there’s no fruit, why grow or invest at all?
These questions are keeping entrepreneurs like Ryan Slater, co-owner of the Juice Truck in Vancouver, up at night. Over the past seven years, Slater has grown his staff from two to 70, and although he pays employees above minimum wage, he doesn’t currently cover MSP costs. Therefore, Slater estimates that the incoming EHT will hit his company’s bottom line to the tune of $25,000 annually, forcing him to make hard decisions about where to cut costs.
As an employer who has focused on creating job opportunities and growing his business, Slater simply doesn’t have the wiggle room in his budget to cover additional and unexpected expenses like the EHT. While the EHT signifies the biggest pain point for our members looking to invest and scale, it’s unfortunately just the latest proposed tax in a string of increases facing business owners.
Our members are reasonable, and know they benefit from healthy employees. That’s why many of them cover MSP for their staff—but not every business can afford to pick up the full tab when they’re scaling.
With these tax increases, our government is funding important social initiatives in both housing affordability and child care, two areas of deep interest to our members. However, the budget shouldn’t be balanced off the backs of the business community, and these important efforts shouldn’t be funded at the expense of small to medium-sized companies.
Slater makes a living serving up juices that energize and inspire his customers. His ask of government: how will you energize and inspire me to keep growing—and investing—in B.C.?
Val Litwin is president and CEO of the BC Chamber of Commerce.