The Canada Health Act (CHA) is Canada's federal legislation for publicly-funded health care insurance. The aim of the CHA is to insure that all eligible residents of Canada have access to necessary hospital and physician services, without having to pay for the services.
Insured persons are eligible residents of a province or territory. A resident of a province is defined in the Act as "a person lawfully entitled to be or remain in Canada who makes his home and is ordinarily present in the province, but does not include a tourist, a transient or a visitor to the province". The CHA definition of insured persons excludes members of the Canadian Forces and persons serving a term of federal imprisonment. The CHA also excludes "a resident of a province who has not completed 3 months waiting period, as may be required by the province or territory." The Government of Canada provides coverage to these groups through a separate federal programs.
The administration and delivery of health care services is the responsibility of each province or territory, guided by the provisions of the CHA.
There are four ways to fund health care system that are currently used in Canada:
Employer Health Tax BC
Effective January 1, 2019, the Employer Health Tax (EHT) is in effect in BC. The EHT is a payroll tax, calculated on employment income, including bonuses, commissions, tips paid through employers, employer RRSP contributions and many taxable benefits. Employers whose total annual payroll in BC is less than $500,000 will not pay EHT, and rates for employers with annual payroll greater than $500,000 are dependent on total payroll. For charities and non-profits, EHT does not kick in until total annual BC payroll is $1,500,000.
During transition period of 2019 residents of BC will pay MSP premiums (or employer will pay on their behalf) and employer with annual payroll greater that $500,000 will pay Employer Health Tax. However by 2020 province of BC would completely switch to employer tax model.