Finance Minister Carole James presents the audited public accounts at the B.C. legislature, July 18, 2019.The province’s surplus has dwindled to an estimated $148 million for the current fiscal year, and unpaid medical premiums total more than three times that amount. (Tom Fletcher/Black Press)

B.C. residents still owe $422 million in medical premiums

Canada Revenue Agency sending out tax collection letters

B.C.’s long experiment with charging Medical Services Plan fees to help pay for health care is far from over, with a mountain of overdue bills remaining after the final ones were sent out in December.

The B.C. finance ministry says that as of Dec. 31, individuals and businesses still owe $422 million in overdue MSP fees, accumulated over years of government struggles to track and enforce the payments. That’s more than three times the total revenue the province expects from the entire forest industry this year.

“This is similar to the amount in previous years, as it is the historical outstanding debt, not necessarily debt owed from the latest fiscal years,” the ministry said in a statement to Black Press. “MSP premiums, billed to individuals and businesses, have always been difficult to administer across the province, which can lead to high arrears.”

Besides using private management contractors and collection agencies, the province calls on the Canada Revenue Agency to collect its MSP debts. The federal tax agency is currently sending out letters to B.C. residents and businesses warning them to pay the province or have the overdue amount deducted from tax credits or refunds they may be eligible for.

“[Revenue Services of B.C.] has asked the Canada Revenue Agency to apply your tax refunds and certain tax credits against a debt you owe them,” the form letter states. “This is allowed under subsection 164(2) of the Income Tax Act.”

B.C.’s premium assistance program is still in effect, with retroactive assistance available for people whose income is low enough for reduced rates to apply. The MSP bureaucracy has been criticized over the years for continuing to charge people the full rate after they lose their jobs, basing the charge on their income from the previous year.

RELATED: Full weight of B.C. employer health tax to be felt in 2020

RELATED: B.C. NDP touts the end of medical services plan premiums

The B.C. finance ministry says the income tax collection policy has been in place since 1999. Five years after the NDP government of Glen Clark started using the tax system for collections, the B.C. Liberal government of Gordon Campbell contracted out the struggling MSP bureaucracy to a U.S. back-office company called Maximus Corp.

The 10-year contract with Maximus cost taxpayers $324 million, and started with fines and penalties to the company for failing to immediately fix the chronic problems of slow customer response from the B.C. government department it replaced. The contract required Maximus to answer phone calls in three minutes or less and process new applications within 22 days of receiving them, employing the same unionized staff who transferred from the province to Maximus in 2004.

The contract is currently held by Victoria-based Advanced Solutions, which started in 2004 as a subsidiary of U.S. billionaire H. Ross Perot’s company, Electronic Data Systems, to provide services to the B.C. government.

During the 2017 election campaign, both the B.C. Liberals and NDP promised to eliminate MSP, the last such fee in Canada, starting with an immediate 50 per cent reduction. The NDP minority government delivered on that promise in 2018, and introduced the Employer Health Tax on business and local government payrolls above $500,000 to make up the revenue, estimated at $1.9 billion for the current year.

About half of MSP has been paid by employers on behalf of their staff, and those employers are on the hook to pay both the reduced MSP and the new payroll tax for 2019. The remainder is paid directly by individuals, if they can be located and persuaded to pay.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Coastal GasLink pipe continues to arrive in Terrace

Shipped by rail from Saskatchewan

No injuries reported following propane leak in Terrace

Hwy 16 closed off, businesses evacuated as emergency crews responded

Coastal GasLink stresses pipeline ‘on a schedule’ as B.C. appoints liaison for Wet’suwet’en

670-kilometre pipeline is schedule to be completed by end of 2023

Tough year ahead for the aluminium industry

U.S. market is still Canada’s most important

Kitselas receive $1.2M boost for apprenticeship development program, open to Tsimshian and Haisla Nations

Melanie Mark, Minister of Advanced Education announces $7.5M for six Indigenous training programs

VIDEO: Feds look to help 126 Canadians quarantined in China for coronavirus

China has confirmed more than 4,500 cases of the new virus, with more than 100 deaths

Sap thief taps Saanich park maple trees, faces hefty fine

One tree found with four taps in Mount Doug Park

B.C. reports first coronavirus in Vancouver region

First patient visited Wuhan, China, reported symptoms

Uber threatens legal action to ‘defend its right’ to operate in Surrey

‘I have no concerns,’ Mayor Doug McCallum replies

Victoria resident says WestJet employee uttered racist comment, refused to let her on plane

Customer claims she was told ‘You guys can’t handle your alcohol’ by WestJet employee

Bystander who tried to help dog being attacked not liable for its death: B.C. tribunal

Owner of dog killed tried to get $5,000 in damages from man who tried to save it

INFOGRAPHIC: See how fast your B.C. city grew in 2019

The province’s fastest-growing municipalities were located on Vancouver Island

Landowner hearings begin for Trans Mountain expansion in Alberta

Detailed route talks start in Spruce Grove, in B.C. communities soon

Alessia Cara to host and perform at 2020 Juno Awards

Multi-platinum Canadian singer-songwriter also up for six awards, including Artist of the Year

Most Read