Newfoundland and Labrador fund their health care systems through:

• A. employer tax
• B. premium contributions
• C. income tax
• D. federal transfers

Answer: (A)

The funding mechanism being tested is the use of a payroll-based contribution from employers to support health care. Newfoundland and Labrador use an Employer Health Tax, which is a tax on payrolls that provides a dedicated revenue stream to fund hospital and medical services in the province. This approach ties funding to the size of an employer’s payroll rather than to individual income or direct health premium payments from residents. Federal transfers and general provincial taxes still play a broader role in the province’s budget, but the specific, targeted funding mechanism described here is the employer-based tax.