Higgs floats idea of imposing health-care levy

Finance Minister Blaine Higgs is raising the possibility of introducing a health-care levy, similar to ones used in Ontario, as a way to help fund the health system.

Finance minister says Ontario uses similar programs to fund the health system

Finance Minister Blaine Higgs is raising the possibility of introducing a health-care levy, similar to ones used in Ontario, as a way to help fund the health system. 2:22

Finance Minister Blaine Higgs is raising the possibility of introducing a health-care levy, similar to ones used in Ontario, as a way to help fund the health system.

Higgs raised the idea in a pre-budget meeting in Moncton on Monday night and asked for feedback from the citizens.

"There are two provinces that actually have it, Alberta is one and Ontario is another, and it's basically like a minimum payment," Higgs said.

"Even the other night, I had a suggestion in Saint John, like an example there'd be a minimum, let's just use an example, there's be a minimum of $200 for a year and maybe the top rate would be $800 per person per year."

People who have jobs could have the funds deducted from their salaries, while low-income citizens likely wouldn't have to pay, Higgs said.

Citizens' views wide-ranging

The idea generated mixed opinions among citizens approached by CBC News at the Moncton hospital on Tuesday.

"If they're going to spread out the wealth and the smaller communities can get some more health care, I wouldn't mind it," said Chris Harris.

"But if it's just going to go to the pockets of the politicians, then I wouldn't agree with it," he said.

Judy Salmone said she'd have to give the idea "some thought and do a little bit of research and see what it's all about."

I'm thinking that they're taking a lot of tax from us now," she said.

Louis Gardine agrees. He says people in the province are already taxed to death.

"There's no leeway," he said. "You just can't get blood out of a turnip, they gotta realize that."

Alberta, Ontario experience

Alberta scrapped the health premiums on Jan. 1, 2009, which eliminated roughly $1 billion of revenue from the province each year.

Earlier this week, Alberta Premier Alison Redford raised the idea of bringing back the fees.

The New Brunswick government may also be looking to Ontario to see how the policy works, but also how the politics worked. The health levy created a political firestorm for the Ontario government almost a decade ago.

Dalton McGuinty's Liberals campaigned on not raising taxes and then imposed the health levy. Critics blasted the McGuinty government for breaking the promise not to raise taxes.

People earning less than $20,000 do not pay the health fee. The levy starts at $60 per year for people earning $21,000 and is capped at $900 for people earning more than $200,600 a year.

The levy raises roughly $3 billion a year for the Ontario government.

British Columbia also charges its citizens monthly health premiums.

The fees start when a person or family earns more than $22,001. A single person earning $22,001 to $24,000 will pay $12.80 a month or about $153 a year. A family of three, earning more than $30,000, would pay $133 a month or almost $1,600 a year.

Look at spending

Stephen Birch, a professor with The Centre for Health Economics and Policy Analysis at McMaster University in Hamilton, Ontario, says funds generated by health levies aren't necessarily earmarked for health care.

"They just go into general government revenues and health care funding is one of the many things on the table that are fought over to get the share of that government revenue cake," he said.

Birch contends governments should spend less time looking at how to bring in money, and look more closely at where they're losing it instead.

"Perhaps if we started looking at how we're spending our health care dollars, instead of just finding different ways of raising money to continue to put into that pot, then we might be able to find a way of getting a fiscal balance within health care that doesn't involve continually increasing taxes."

Higgs said it's too early to say whether a dedicated health-care levy is the right way forward for New Brunswick.

New Democratic Party Leader Dominic Cardy criticized the idea of a health-care levy in a statement on Tuesday.

The NDP leader called a health levy redundant.

"We already pay a fee for health care, it's called taxes," Cardy said in a statement.

Potential referendum on HST, tolls

Finance Minister Blaine Higgs is holding pre-budget meetings to get input on his March budget. ((CBC))

The finance minister also raised the possibility of having a referendum on increasing the harmonized sales tax by two percentage points and imposing highway tolls earlier on Monday in an interview with CBC News.

He also raised the possibility of raising other taxes, such as gasoline, tobacco and other consumption taxes.

The New Brunswick Business Council has already come out in support of the provincial government raising corporate income taxes and the harmonized sales tax.

Higgs told the crowd he is trying to adopt a balanced approach to eliminate the deficit.

"We can't just reduce expenses to balance our budget," he said.

The province’s deficit is projected to be $356-million, which is nearly double what was anticipated in last March’s budget.

Premier David Alward had promised his government would balance the province's budget before the 2014 election. But Higgs said last week that goal was not going to happen.

The provincial government is continuing to forecast slow economic growth and a series of one-time expenditures is forcing the government to abandon its balanced budget pledge.