A new survey shows many Alberta businesses are planning to drop or reduce health care coverage for their employees if the provincial government hikes premiums.
Responses from nearly 5,000 members of the Canadian Federation of Independent Business indicate one-third of small- and medium-sized firms which currently pay the premiums on behalf of their employees are considering changes following the government’s proposal to increase premiums by 20 to 40 per cent.
A further 20 per cent of employers are warning that the tax increase will force them to reduce salaries, benefits or planned raises.
“While the magnitude of the potential increase has been estimated anywhere from 20 to 50 per cent, it is important to evaluate this in the context of other payroll-related taxes affecting Alberta firms,” said Dan Kelly, CFIB’s vice-president for the Prairies.
Kelly noted that over the past three years, small firms have experienced a 57 per cent increase in Alberta’s Worker’s Compensation premiums, with a further double-digit increase expected next year. In addition, CPP premiums will have risen by a total of more than 70 per cent by 2003.
According to the survey, 16.3 per cent of small and medium sized business owners already pay 100 per cent of their workers’ premiums, 16.98 per cent pay a portion, and 15.5 per cent do not pay, but remit the premiums to government.
Just over half of the respondents do not pay for, nor deduct premiums.
The hikes were proposed by Premier’s Advisory Council on Health, chaired by former deputy prime minister Don Mazankowski, and were among a set of recommendations designed to provoke an overhaul of medicare to ensure the sustainability of health care.
The CFIB represents 8,700 small and medium-sized businesses in Alberta and more than 100,000 across Canada.
