The Low-Down on Construction – May 23
The long-awaited Information Notice regarding PST on insurance premiums was released last week, and the news was not good.
Much to our disappointment, it appears that premiums paid on benefit plans will now be subject to PST. Of course, this has significant impact for all our members as our benefit plan fees essentially just increased by 6% for reasons completely beyond our control.
I struggle to understand the wisdom in this decision. After all, benefit plans throughout the province are taking the pressure off our public health care system.
Benefit plans allow people to seek private health care services such as physiotherapy rather that clogging up the public system. They pay for services such as massage, chiropractic and other paramedical services that help maintain our health. And benefit plans provide coverage for numerous items not covered under provincial health care including prescription drugs, vision care, mental health services, hearing aids and dental care.
This all adds up to a healthier population, and reduced public spending on health care which currently represents 40% of our province’s spending.
Why should we be concerned? When a similar tax on benefit plans was introduced in Quebec, 20% of employers dropped health and dental benefits for their employees. We are concerned the same may happen in Saskatchewan, especially at a time when profit margins are already shrinking.
Without benefit plans, more people will enter the public system with greater health needs and will drive up costs over time.
The new tax will be implemented August 1, 2017. More tax changes ahead for our industry, but at least with this issue we have some time to prepare for it!