Thursday, March 6, 2014

BC MSP revenues are rising much faster than other revenue sources

The portion of the annual revenues of the BC government that comes from MSP has been rising for a number of years.

Year      MSP in     annual   MSP as a pct of
         ,000,000   increase   BC revenues
2004/05   $1,465                4.39%
2005/06   $1,482     1.16%      4.12%
2006/07   $1,524     2.83%      3.96%
2007/08   $1,557     2.17%      3.89%
2008/09   $1,595     2.44%      4.12%
2009/10   $1,666     4.56%      4.39%
2010/11   $1,787     7.26%      4.39%
2011/12   $1,919     7.39%      4.59%
2012/13   $2,047     6.67%      4.87%
2013/14   $2,156     5.32%      4.91%  forecast
2014/15   $2,271     5.33%      5.07%  budget 2014
2015/16   $2,394     5.43%      5.20%  current fiscal plan
2016/17   $2,524     5.43%      5.32%  current fiscal plan

One should expect the total MSP premium payments to rise at roughly the combined rate of the rate of inflation and the growth of the population of BC, this is something in the rate of 3-4% per year.  Since 2008/09 the rate at which MSP revenues have risen is significantly faster than that.   

I am not entirely sure why this is happening.   

I think it is time for the government to look at MSP and decide if this is the best and fairnest method to raise revenues.    I think it is time the government consider scrapping MSP and getting a similar amount of revenue from personal income tax.   Since the total amount paid by BC people would not change this should not cause any significant hardship for the public overall.   Yes, there would be a shift of cost from the lower middle class to the richest people.

Removing MSP would also save the government money because it could get rid of the infrastructure to collect MSP permiums.


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