Feds considering proposed tax on health benefits, campaign claims
Published Thursday, January 26, 2017 6:03PM PST
Last Updated Friday, January 27, 2017 12:29PM PST
An awareness campaign supported by several insurance agenies and health professionals suggests that the federal government is considering a potential tax on employer-paid benefits.
The campaign claims the federal finance ministry could turn health and dental benefits into taxable income in its next budget. The ministry told CTV News it could not confirm or deny whether a tax is under consideration.
Organizations including the Canadian Dental Association have launched a campaign called "Don't Tax My Health Benefits" to pressure members of parliament and raise the public's awareness of the possibility.
The campaign is supported by Canadian associations of medical professionals including optometrists, occupational therapists, dental hygienists, chiropractors, physiotherapists, psychologists and more.
A website set up by those behind the campaign says a tax on benefits could mean "hundreds or thousands of dollars added to your tax bill," and may encourage employers to drop or decrease their coverage plans if they can't afford the tax.
Critics of the tax cite research from Amy Finkelstein, an economics professor from the Massachusetts Institute of Technology, who said that approximately 20 per cent of employers dropped benefits for employees when a similar policy was introduced in Quebec in 1993.
Those behind the campaign estimate that 22 million Canadians, 13.5 million workers and their dependents, would be affected by the change in policy.
The website also states that, without benefits, more Canadians will enter the public system and drive up costs.
"Should this happen, a lot of healthcare costs will now move on to the public system because people will defer or delay treatment," said Jocelyn Johnson of the B.C. Dental Association.
The possibility of a tax is a big concern for a region already facing affordability issues.
"Families could see an increase on their tax bill between $500 and $1,200," Johnson said.
The campaign asks those against tax on benefits to send a letter to their MPs.
In a statement, the ministry said it could not confirm the idea was under consideration, and that any changes it makes will "have middle class families in mind."
Communications director Daniel Lauzon said there has been "a lot of speculation about what some of those measures could be."
He said the government is reviewing the entire tax system, and insists its goal is fairness.
"We're encouraged by the fact that so many people have taken the time to share their thoughts with us on this," he said.
"So to those who are worried, I say: stay tuned, but know that fairness is what we're after."
No official date has been given for the next budget, but reports suggest it can be expected in early March.
With a report from CTV Vancouver's Bhinder Sajan