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Canada: New “Employer Health Tax” Now in Effect in British Columbia

Pursuant to the new Employer Health Tax Act, certain employers in British Columbia are now required to pay to the government for each calendar year a tax equal to 1.95% of the BC remuneration paid by the employer during the calendar year.

The Act defines “employer” very broadly, as a person who pays remuneration to an employee, or a trustee in bankruptcy, assignee, liquidator, receiver, administrator or other person administering, managing, winding up, controlling or otherwise dealing with property or business of a person who pays remuneration to an employee. The Act will apply somewhat differently to non-profit, part-year and associated employers. In order to pay the health tax, employers are required to register with the BC government.

The Act came into force on January 1, 2019. While the BC government has made general information about the tax available on its website, employers operating in British Columbia are well advised to seek legal and tax advice in respect of their obligations under the new Act.