Fee hikes nibble away at your pay
The B.C. government boasts Canada's lowest income tax rates on earnings up to $113,000 a year, but other deductions from take-home pay are going up this year.
The latest in a series of Medical Services Plan (NDP) premium increases took hold Jan. 1. The Canadian Taxpayers Federation calculates that the increase means a family with children will see their monthly MSP bill rise from $121 to $128, or $84 a year extra. MSP premiums have gone up 18.5 per cent since 2009.
Skeena NDP MLA Robin Austin said it's unfair that the provincial government would raise MSP premiums as it is a flat rate paid by all – no matter what a person's income.
“Everyone pays the same.....and I don't think that is fair,” he said, adding it would be fairer to pay that out of income taxes where people would be charged according to what they earn.
Austin pointed out the northwest will be particularly hard-hit by the increase.
“We have a high portion of people who are on fixed incomes and earning far less than the average [person] in B.C.; it hurts people in the northwest.” he said.
The federation also notes that federal Employment Insurance and Canada Pension Plan (CPP) premiums are set to rise by $306 for the average employee in 2012. Half of that is paid by the employee.
Austin was mixed on the increases as he supports the increase in CPP premiums as it will help people prepare for retirement.
“I think it is very important for us to be assertive in putting away money for our retirement.”
He said EI costs would be great if it was used only for the purpose to serve workers who need it.
“Very often the [federal] government takes EI and uses it for other purposes,” he said.
Other everyday costs are also going up for B.C. residents.
Large BC Hydro rate increases were pared back in a spending review last spring ordered by energy minister Rich Coleman.
An interim eight per cent increase did take place in spring of 2011, but BC Hydro has committed to rate increases of 3.9 per cent in 2012 and 2013.
The coming year will also see the last legislated increase in B.C.'s carbon tax on fossil fuels. As of July 1, 2012 the carbon tax on a litre of gasoline rises from 5.56 cents to 6.67 cents, with similar increases on diesel, natural gas and other fuels used by consumers and industry.
The current legislation requires each increase to be offset by reductions in personal and business income taxes. Premier Christy Clark says talks are underway with business and the public to see what direction the province takes on the carbon tax after 2012.