OTTAWA — Prime Minister Justin Trudeau refused to rule out the possibility Tuesday that the Liberals will increase government revenues by taxing private health and dental plans in the upcoming federal budget.
Interim Conservative Leader Rona Ambrose said in question period that there were only two ways the Liberals could achieve balance: increase taxes or curb their spending.
UPDATE: A day after he refused to rule it out, Prime Minister Justin Trudeau told the Commons on Wednesday the Liberals will not push forward with a tax on health and dental benefits provided to employees by their employers.
After a series of stories in The National Post suggested the Finance department is targeting benefits, Ambrose demanded to know whether Trudeau was seriously considering a new tax on drug, vision, and dental plans that would affect millions of Canadians.
“That proposed new health tax means that most families will pay an additional $1,000 in taxes, many will lose their benefits entirely, and they will be left vulnerable,” she said in the House of Commons.
Trudeau responded with his usual chorus, saying that the government is focused on helping the middle class and those working hard to join it.
“We are looking at how we are going to help Canadian families get through the challenges that they are facing and create opportunities for their children and their grandchildren to thrive and succeed,” the prime minister said.
Ambrose tried again. “People rely on these for prescriptions and much-needed health programs,” she said.
"That proposed new health tax means that most families will pay an additional $1,000 in taxes, many will lose their benefits entirely, and they will be left vulnerable."
— Interim Tory Leader Rona Ambrose
“Could the prime minister focus on the economy and answer the question? Is he seriously going to put a tax on the health and dental plans of millions of Canadians?”
Trudeau sidestepped again, saying: “Budget 2017 is coming up and we are looking at ways within that budget to help Canadians invest in their future, to lower the costs of everyday goods and pharmaceuticals they need.”
If the Liberals push forward with a tax on health and dental benefits, the government will likely argue that well-paid employees need to pay their fair share. Currently, employees without benefits — often lower-wage workers — are subsidizing those who receive them, a senior Liberal recently told HuffPost.
Quebec already taxes such benefits.
Professional associations urge Canadians to fight back
Several professional associations, from dentists to chiropractors to optometrists, have joined forces to urge Canadians to fight back against the proposed tax hike.
The DontTaxMyHealthBenefits.ca campaign suggests many Canadians might find themselves without health benefits if employers can't afford to keep them insured.
When Quebec introduced a health tax in 1997, 20 per cent of employers stopped offering health and dental benefits, the coalition states on its website.
“Without proper health care benefits, more Canadians will enter the public system with greater health needs, driving up the costs,” they wrote. “Taking needed care away from millions of Canadians is not the way to address fairness and equity."
Study shines light on potential costs
Two years ago, the Advisory Panel on Healthcare Innovation struck by the Conservative government suggested employer-paid premiums on employer-sponsored health and dental benefits should be made a taxable benefit to the employee. The panel recommended employees be allowed to claim the expense as part of a refundable health tax credit.
That’s not to say employees with benefits won’t feel any pain. The Post cited a soon-to-be-released study by the Conference Board suggesting someone in Ontario making $45,000 a year with family coverage would pay an extra $1,167 in taxes. Those earning $90,000 would pay $1,277 more. Families with dual incomes would pay twice that amount.
Last fall, the Grits announced that the size of the deficit is projected to be $25.1 billion for this year. The Liberals offered no timeline for when the federal government’s books might return to balance.
Also on HuffPost
