There are more acceptable variations for a health tax, Carson Binda argues.
The EHT is a three per cent tax businesses pay once their payroll goes above $500,000. In other words, it’s a punishment for businesses that succeed and expand.
The owners finally saved enough money to open another garage on the other side of town. To do so, they’ll need to hire another manager and eight more staff. That means the payroll will shoot up to $1 million per year. The government should scrap the EHT. Businesses in Alberta, Saskatchewan and most of the Atlantic provinces aren’t forced to pay this tax. In 2019, Ontario’s EHT threshold was the lowest in the country, at $490,000. But because of difficulties businesses faced during the pandemic, Ontario more than doubled its EHT threshold to $1 million. A higher threshold means fewer businesses pay the tax.
At minimum, the Eby government must increase the payroll threshold before the EHT kicks in and reduce the tax rate.