Ontario health premium: who pays?

• Author: Chiappetta, Victoria R.
• Position: BUSINESS LAW

Have you been wondering if employee groups will look to employers to pay their employees' portion of the proposed Ontario Health Premium (OHP)?

During the Ontario government's budget speech on May 18, 2004, provincial finance Minister Greg Sorbara announced the introduction of a new "health premium" designed to provide additional funds for health care. The Ontario Health Premium (OHP) commenced in mid 2004.

The OHP is not specifically termed a "tax," but it is charged to an individual tax-payer at the end of a calendar year and based on the individual's taxable income. It is anticipated that such a premium will be imposed on all individuals earning more than $20,000 per year. It will be graduated on the basis of income, capping out at $900 per year for those earning an annual income of more than $200,000.

In 1989, Ontario discontinued the collection of OHIP premiums and adopted an Employer Health Tax. Despite this, however, many collective agreements have maintained references to OHIP health premiums being wholly or partly paid for by an employer. Such language will surely lead unions to call on employers to assume the cost of their employees' OHP. The issue is also sure to be raised at the bargaining table. The ability of the union to reasonably advance this claim will be dependent...