submitted from Diana McQueen’s Office
I wanted to give you and update on the new Health care levy that some of you have asked me about.
When Alberta’s finance minister tabled Budget 2015 at the end of March, he introduced a new Health Care Contribution Levy. A number of Albertans have questions about what the new levy will mean for them. I would like to provide some clarity on Alberta’s new health care contribution levy.
Why do we need a Health Care Contribution Levy?
With oil prices plunging over 50 per cent since last summer, we were facing a potential revenue shortfall of $7 billion for 2015-16. In addition, Alberta’s health care system is one of the most expensive in Canada, spending 19 per cent more than the national average. While the budget includes some cuts to health care spending to reduce administration cost and waste. The reality is, cuts alone will not be enough. The Health Care Contribution Levy recognizes the cost of health care and its importance to Albertans.
Does everyone have to pay?
The health care contribution levy is based on an individual’s ability to pay. Only Albertans who have a taxable income of more than $50,000 a year will have to pay the levy. If you’re taxable income is lower than $50,000 a year, which includes many of our seniors and most vulnerable Albertans you will not have to pay.
How does the new Levy work?
The levy is also progressive in structure. That means those Albertans who can afford to pay more, will pay more. The levy will increase in $200 increments based on taxable income more than $50,000. It will be capped to a maximum of $1,000 annually for those whose taxable income is $130,800 or more. Again, none of this applies to Albertans who have a taxable income of less than $50,000 per year. For many Albertans, the new levy will be deducted at source in the same way employers deduct Alberta’s personal income tax.
Is this the same as the old Health Care Premiums?
The new Health Care Contribution Levy is not the same as the previous health care premiums, which had a disproportionate impact on lower and middle income earners. Even though government has had to introduce a new levy and increase other taxes, we were careful not to create undue hardship for vulnerable and low income Albertans.
As your MLA, I understand your concerns about the new Health Care Contribution Levy, and I encourage you to call my office at 780-542-3355 or (Devon Office) 780-987-3666 if you have any questions. You can also find more information online at budget.alberta.ca.
Honourable Diana McQueen, MLA
Minister of Municipal Affairs