The Manitoba Chambers of Commerce (MCC) along with Chambers across Canada are raising concerns that the Federal government is considering implementing a tax on health and dental benefits in the upcoming Budget that could cause serious damage to individuals and small and medium size businesses.
“Taxing health care benefits would cost employees hundreds or thousands of dollars each year, and result in fewer employers willing to offer these benefits”, said MCC President and CEO Chuck Davidson. “If the Federal government moves forward with this decision it would mean lower income and middle-class Canadians not being able to afford access to necessary and preventative care such as vision care, prescription drug, mental health services, dental care, occupational therapy, and musculoskeletal care (physio, chiro, massage therapy).
Finance Canada, estimates that exempting employer-provided health benefits results in $2.9B in forgone tax revenue. However, that generates $32.2B in additional health care benefits for Canadians. In exchange for the foregone tax revenue, the tax-free status of these employee health plans increases access to preventative care and helps to save publicly-funded healthcare systems by addressing and preventing health care issues early.
“While the federal government should be looking at ways to get its fiscal house in order, we are concerned about the potential impact of this decision on small business owners and employees across Canada,” added Davidson. “Employers and their employees need to make tough decisions every day, but how they pay for health and dental benefits should not be one. We would implore the finance minister and the federal government to stop and think about the damage they could do to Canadian business.”
In an effort to impart this important message in advance of the Federal Budget, MCC and our network of local Chambers, along with our provincial counterparts, and the Canadian Chamber of Commerce are encouraging Manitobans to let ask the finance minister not to create a new tax on employee-sponsored health care plans.