Higher-than-anticipated provincial revenues have caused the B.C. government to cancel a four per cent increase to Medical Service Plan (MSP) premiums that was scheduled for January 1, 2017. Much of the surplus comes from property transfer tax revenues generated by the hot real estate market in Vancouver and other locations throughout the province. The transfer tax revenue for 2016 is forecast at $2.1 million; nearly $965 million more than anticipated.
The planned MSP premium increase would have seen costs increase by up to $36 a year for an adult. Premiums will also go down by four per cent for anyone who is eligible for premium assistance.
B.C. is the only province where citizens pay a medical premium. In other provinces, medical premiums are rolled into income tax and tied to a person’s income. Jordan Batemen, B.C. director of the Canadian Taxpayers Federation, says that the B.C. government uses medical premiums rather than a more direct form of taxation for health care, so it can claim low overall taxes when compared with other jurisdictions.
Andrew Weaver, leader of the B.C. Green Party, sees the scrapping of the planned premium increase as a “cynical ploy to gain votes as we head into an election year.” He has consistently called for the MSP to be rolled into the income tax system, with premiums calculated on taxable income.
Mat Wright, Weaver’s press secretary, calls the B.C. system “regressive”. “If you earn more than $30,000 a year you pay the same as someone who earns $300,000 a year.” By comparison, Ontario medical premiums are based on a sliding scale depending on a person’s taxable income. Rather than use the mail-out system in place in B.C., where residents are billed and need to send in payment up to a dozen times a year, residents of Ontario see their medical premiums deducted from their pay or pensions.
Wright says that moving to such a system here would be much more beneficial than what is currently in place. “It would be simplified, with one single administration dealing with it. It would also be much more transparent.”
He notes that under that system, the MSP premiums would be targeted directly at health care. “Right now MSP premiums go to general revenue. It’s not transparent that way. Under the other system, what you pay for health care goes directly to health care.”
He adds that premier Christy Clark is indicating that a shake-up to the Medical Services Plan is in the works; one that might lean towards what the Green Party has been advocating for the last three years. In an interview last week, Clark said that the MSP premium system doesn’t work, and it’s time to “cut constituents a break”.
“It’s an old system, it’s archaic, it’s not really logical,” she said, noting that it’s time for a rethink, and adding that the government is considering basing MSP premium payment on income. She calls the cancellation of the planned premium increase “a first step”, and says “You’re going to see more changes to MSP as we continue in the coming months.”