New tax cuts for British Columbians a mixed bag, Canadian Taxpayers Federation says

British Columbians of all income brackets will enjoy a significant drop in income taxes this year, according to the Canadian Taxpayers Federation (CTF), whichreleased its annual New Years Tax Changes report Friday.

But not so fast, says Kris Sims, the organization's B.C. director. She says thenumbers don't tell the whole story.

"While we finally get to drop the medical services premium and fully switch over to the employer health tax, taxpayers need to remember that we are all still paying the tax, just in a different form," Sims said at a newsconference outside of Surrey City Hall.

"You're going to be paying it through lower wages in some cases, higher property taxes in other cases and higher costs for your items at stores, because employers, job creators, are now bearing that burden."

The report says British Columbians should expect an income tax cut anywhere between $331 to $565 this year. Most of these savings can be credited to B.C.'s new employer health tax (EHT) and the federal government's decision to raise the basic personal amount, which is not taxable, from $12,069 to $13,229. By 2023, that will reach $15,000.

• B.C. says bye bye to Medical Services Plan premiums

The provincial government introduced the EHT as an eventual replacement to monthly Medical Services Plan (MSP) paymentsthis year. Employers with an annual payroll above $1.5 million must now pay 1.95 per cent of that figure in taxes, while employers with a payroll below $1.5 million pay a reduced tax and those with payrolls less than $500,000 are exempt.

According to the CTF, roughly 75,000 employers were paying both the EHT and MSP this year, resulting in a "double whammy of taxation." Meanwhile, the provincial government halved MSP payments for all individuals in 2019.

The provincial government eliminates all MSP premiums on Jan. 1, a move the government says will save individuals up to $900 a year, though the new CTF report challenges this number, estimating the maximum tax cut at no more than $461.

The total amount of the net tax cut is $800 million.

"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," Premier John Horgansaid earlier this month.

Speaking before the media in Surrey, Sims said the B.C. NDP deserves credit for fulfilling one of their election promises and eliminating MSP premiums, a move the CTF supports.

But the government should not have replaced it with another tax, she said.

"This is really just a shell game."

The CTF is a not-for-profit advocacy organization thatcalls on governments to lower taxes, reduce waste and be more accountable.

• Liberals move to deliver tax cut they say will help 20 million Canadians

When asked how the government could have continued to support the province's medical services without creating another stream of revenue, Sims pointed to what she called "wasteful spending" and the neglect of B.C.'s natural resources.

"If we actually harnessed the power of our natural resources sector, instead of fighting it tooth and nail, we would have billions of more dollars in our budgets," she said.

As for "wasteful spending," Sims singled out the provincial government's CleanBC plan, which aims to reduce greenhouse gas emissions by 40 per cent below 2007 levels by 2030.

"We don't want to see them throwing [tax dollars] after green technology that may or may not work and that will just cost us a lot of money."