BC Medical paid by Contractors in 2019

[Cyper]

Starting in 2019 tree planting contractors & all other businesses for that matter will be paying our BC Medical premiums for us. They will be paying a payroll tax to cover the premiums employees will no longer have to pay. Small companies will not have to pay the tax if their annual payroll is under $500,000. This will give them a bidding advantage over large contractors of up to 1%. Here are some details:

B.C.’s new NDP government has proposed an Employer Health Tax (EHT) in their first budget that was released on Tuesday Feb 20, 2018. This announcement is accompanied by the proposed elimination of the Medical Services Plan premiums (MSPP) effective January 1, 2020. MSPPs are levied on individual taxpayers while the proposed EHT will be levied on a businesses’ payroll. The proposed EHT is to come into effect on January 1, 2019.
How the Employer Health Tax will work
The EHT will be a tax imposed on employers based on the size of their payroll. Small businesses with an annual BC payroll of $500,000 or less will be exempt from this levy. The tax rate will start at 0.98 percent for annual payrolls in excess of $500,000 and will gradually increase to 1.95 percent for B.C. payrolls in excess of $1,500,000 per year. The chart below shows the proposed tax rates for defined payroll ranges.

Annual BC Payroll-Annual Tax $-Tax as a percent of Payroll
$500,000 - $0 = 0.00%
$750,000 - $7,313 = 0.98%
$1,000,000 - $14,625 = 1.46%
$1,250,000 - $21,938 = 1.76%
$1,500,000 - $29,950 = 1.95%

Contractors had better bid an extra 1% for 2019. Passing the cost on to planters by lowering the tree price will not work. With provincial planting volumes expected to increase dramatically over the next few years to deal with all of the burned land, planters will be in an enviable position on the supply & demand curve. There will be more trees to plant tthan available planters, thereby forcing contractors to fight to attract enough workers. If you aren't making better money going forward, it's time to look for a new company.

Prices & wages should be on their way up because of the oversupply of trees, undersupply of planters and the increasing minimum wage.

[Scooter]

Prices were already increasing this year for my camp. Small amounts, but a foreshadowing of what's about to come.

I've already spoken to a few company owners who are in the enviable position of walking away from certain "problematic" long-term clients in favor of other work for 2019.

A perfect storm is brewing for 2020.

[fluffer]

You know what happens when the people who are used to making all the money start to get squeezed, though, right? They lobby for easier access to imported labour. So far planters have been spared from floods of foreign workers because the industry is exempt from the foreign labour import programs but most business owners tend to be rather fickle and won't stand for this for long if they feel any sort of pressure.

[jdtesluk]

Except the foreign labour strategy has zero guarantee of success, and would amount to a catastrophe for any company that botched it. When people think of "foreign labour" there is an unfortunate tendency to think of generic desperate workers that will eagerly take on any menial job for the opportunity to work in our great civilized country.....but this is far from reality.

-- Foreign workers often do have options. Sometimes there are not only viable options at home for those with the language and mobility assets to consider planting, but also more viable (and palatable options) within Canada and the US.
-- Foreign workers (like farm workers) do not automatically make good planting recruits. Planting is very very different from farming, and past efforts to recruit fruit and vegetable pickers to plant have failed. There are differences in exposure, physical conditions, work process, and other things that simply don't jive with many farm workers, and which would make planting unpalatable for many foreign workers. Remember, there is a distinct culture to planting that does not necessarily mesh easily with foreign workers. We have many awesome examples of foreign workers succeeding in planting, but I have seen just as many failures.Mexican workers have succeeded in planting in the USA, but their production simply does not meet BC standards, and the conditions they work in are very different than ours, and they work within a very different legislative framework than ours. Simply put, foreign workers do not make any better planters than Canadians, and in many cases are not culturally or geographically adapted to the conditions and context of planting.
--Language issues pose a significant barrier in an industry where safety communication is a central priority.
--Foreign workers would still need to be paid in compliance with our legislation. Having more foreign workers available (even if they could pick up the shovel) would do nothing to change the legislated imperatives for pay.
--Foreign worker programs often have fees and recruitment requirements that would make bringing in a bunch of planting recruits a dodgy proposition. Remember, only a select group of people are cut out for planting, and finding that group amidst a foreign worker pool would be even harder than doing it among Concordia and McMaster undergrads. You would be hard-pressed to properly vet and screen foreign planting recruits, and then face the challenge of adapting them to northern Canadian conditions AND the labour process AND weeding through the good and bad ones to find a crew you can rely on......it's probably better to dig into different parts of the domestic labor pool than to search abroad.
-

Really, the foreign worker specter has been raised over and over for 30 years, and never once amounted to a blip on the radar of planting. I'm not saying it CAN"T happen. I just don't see it as either A) a direct threat to planting prices, or B) a likely response to increase prices from contractors. If anything, I could see it being a response to lack of labor capacity, but that would be a different play-out.

This does not mean that industry will not respond to being squeezed though. There are many things we may expect from Licensees as they face rising costs:

- Passing costs on to consumers (higher wood prices)
- Implementing stricter and unreasonable fine and quality penalty schedules
--Lobbying government for relaxed standards on reforestation obligations
--Experimenting with different types of reforestation strategies (i.e. dragging and seeding). But please don't mention drones and aerial drops because those simply don't work in BC
--Messing with specs (spacing etc) to save nickels and dimes
--Repackaging contracts in longer-term guaranteed rates to ensure price surety

It doesn't stop there. The people that count the beans can be a devious bunch. New strategies are bound to emerge.