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

Two big housing projects planned for Castlegar

A mix of single family and multi-family units planned

Women Care Castlegar offers funding to local charities

Women Care Castlegar is a group of community-minded philanthropic women

Castlegar residents living with dementia break silence on stigma

More than half a million Canadians are living with dementia today.

Rossland Council updated on cost of fixing arena

It will cost $700,000+ to get job done

UPDATED: Man dies in backcountry near Whitewater Ski Resort

The victim was found unresponsive in a tree well Friday

VIDEO: Nickelback gears up for nostalgia tour

Canadian band joins Stone Temple Pilots for a summer tour that includes just one stop in Canada

Province asks health-care staff to be ‘vigilant’ in screening for possible coronavirus cases

This comes after U.S. health officials confirmed a case of the virus in Washington State

Boy, 13, arrested after alleged assault involving girl at B.C. middle school

Boy alleged to have used ‘inappropriate levels of force’ to injure the girl

B.C. player becomes only second Canadian to enter Hall of Fame of Baseball

Walker received 76.6 percent of the Baseball Writers of America Association vote

PHOTOS: Heavy snowfall breaks window, causing avalanche into B.C. newsroom office

It was a chaotic start to the week for the Kitimat Northern Sentinel

Canadian law firm launches class action on behalf of Iran flight victims

Flight 752 was shot down by Iran shortly after take off

Mission Hill cellarman fired after mistakenly dumping $162K of wine down the drain

The former employee filed a grievance with the West Kelowna winery but was unsuccesful

Protesters block B.C. government building entrance to support Wet’suwet’en First Nation

A letter with four demands was delivered to the Ministry of Energy, Mines and Petroleum Resources

Most Read