By Derrek Quon
The Federal Government was looking at the taxation of health and dental plans as part of their Spring 2017 budget. In a review, it was estimated health and dental plans as a source of tax reform could raise as much as $2.9 billion. With the proposed changes, employers or employees would pay tax on their health and dental benefits.
This would significantly increase your employee’s taxes and decrease their take-home pay. Health policy analysts estimate the proposal to tax Canadian’s health and dental benefits would cost the average middle-income earner over $1,000 annually.
Good news – our voices were heard
Our industry and several associations, from dentists to chiropractors to optometrists, joined forces to urge Canadians to voice their opinions and say NO to the proposed tax hike.
It appears our efforts have paid off! On February 1st Justin Trudeau confirmed in the House of Commons, the government would not be proceeding with changes to the taxation of health and dental benefits. As you can imagine, this is a huge relief. We strongly believe the taxation of health and dental plans would cause employers to reduce or drop some plans completely, or pass along the increased costs to employees and their families.
Here is a link to Justin Trudeau’s decision: taxation of health and dental plans
We will continue to monitor this issue and aim to be a forceful voice in protecting the interest of our clients and your employees should such a tax proposal be raised again in the future.
For more information, please reach out to a member of your Arbutus Financial team.