B.C. care providers say harmonized tax will result in reduced services for seniors

Wednesday, July 29th, 2009

‘The outcome is likely layoffs. Care providers won’t have any choice,’ says head of organization

Brian Morton

B.C.’s care providers are worried that the province’s proposed harmonized sales tax (HST) will significantly reduce quality of care for seniors.

“This could mean a lower quality of care, as care providers are already stretched,” said David Hurford of the BC Care Providers Association. “It’s a very uncertain time, and there’s a growing demand for seniors’ services. This makes a tighter budget even tighter.

“The outcome is likely layoffs. Care providers won’t have any choice,” said Hurford, whose organization represents more than 130 non-profit and private B.C. seniors’ care providers responsible for more than 10,000 residential care beds in the province.

Under the harmonized tax regime, announced last week by the provincial government and planned for July 1, 2010, the five-per-cent federal goods and services tax will be combined with the province’s seven-per-cent provincial sales tax into a 12-per-cent harmonized tax.

The added costs to consumers come from the fact the new tax will apply to the same goods and services covered under the GST, including many items that are currently exempt from the PST.

Hurford said looming health cuts and the fact that care providers are already doing more for less will exacerbate the repercussions of the tax. Services newly hit by the tax include employee development, housekeeping and laundry, resident outings and travel, building maintenance, dietary contract services, refuse removal and pest control, landscape and snow removal contracts, and vocational therapists.

Also affected are personal services such as hair care, dry cleaning, repair services for household appliances, household maintenance such as renovations and painting, real estate fees, membership fees for health clubs, movie and theatre tickets, funeral services, professional services such as accounting and home care, and airline fares within Canada.

Hurford said the BCCPA was not consulted about the tax, but is conducting a review of its cost implications and plans to propose mitigation measures to the finance ministry, including a possible rebate to association members for staffing costs.

As it now stands, he said, non-profit and private residential seniors’ care facilities get much smaller rebates than health-authority care homes. He hopes that will change so all operators in long-term care are treated the same.

Hurford cited the experience in Ontario, where estimates suggest the HST could cost care providers more than $12 million.

Marilyn Slade, CEO of the non-profit Carital Continuing Care Society in Vancouver, said she believes the new tax will result in $200,000 in extra expenditures per year — the equivalent of more than two full-time registered nurses — at her 80-bed facility.

“I’m surprised [the government] didn’t think this through and bring it through with an exception for seniors’ care.”

Slade said up to 90 per cent of her expenses are labour-related, and that she will have to lay off people if the tax isn’t changed. “That’s the only way I can balance my budget.”

Hendrik van Ryk, COO of the privately-operated H&H Total Care Services, which has 240 beds, primarily for seniors, estimated the new tax will cost his company $350,000 a year and impact such services as housekeeping, laundry and food delivery.

“At one site, we’ll probably reduce staffing levels. We’ll do more with less.”

Meanwhile, Scott Russell, president of the Real Estate Board of Greater Vancouver, said that while he doesn’t yet know the full implications of the new tax, it will result in higher costs for such real estate-related services as realtors’ fees and house inspections.

© Copyright (c) The Vancouver Sun

Comments are closed.