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Classified in: Health, Covid-19 virus

Capital gains legislation points to misunderstanding, lack of support for Canada's doctors

OTTAWA, ON, June 14, 2024 /CNW/ - The Canadian Medical Association (CMA) is disappointed and frustrated with the federal tax proposal tabled on June 11 that offered no consideration for physicians who rely on their professional corporations to provide much-needed health care services.

The CMA has advanced to the federal government recommendations that would see an exemption for medical professional corporations or provisions that would allow physicians to share with the corporations they operate the $250,000 capital gains exemption threshold that is offered to individuals.

We are seeing significant confusion about how medical professional corporations operate and the implications of the tax changes for physicians. Comparing fee-for-service physicians ? who not only pay income tax but also spend as much as 40 per cent of their gross income on overhead costs like staff, essential medical supplies and office space ? to salaried employees confirms just how misunderstood the issue actually is. This is deeply worrisome at a time when we need a strong show of support for all health professionals who continue to work in under-resourced health systems.

The increase to the capital gains inclusion rate is particularly demoralizing for physicians who planned to retire in the next few years, including some who came out of retirement to care for Canadians at the height of the COVID-19 pandemic. Approximately 60 per cent of Canada's 96,000 doctors have set up a medical professional corporation to manage expenses and generate retirement savings. Because every dollar of capital gains earned in a corporation will be subject to the new higher inclusion rate, incorporated physicians will be deeply affected by these tax changes.

Given the current economic climate, the tax changes, coupled with a housing crisis and rising student debt, will also impact young physicians and medical learners who find themselves in a much tougher financial position than they would have been in 10 to 15 years ago. This will create another disincentive to becoming a community-based doctor at a time when there is a grave shortage.

The CMA remains committed to working through this issue in a collaborative way with government to support physicians and prevent further deterioration of the health system.

Dr. Joss Reimer
Dr. Kathleen Ross
CMA Presidents

About the CMA

The Canadian Medical Association leads a national movement with physicians who believe in a better future of health. Our ambition is a sustainable, accessible health system where patients are partners, a culture of medicine that elevates equity, diversity and wellbeing, and supportive communities where everyone has the chance to be healthy. We drive change through advocacy, giving and knowledge sharing ? guided by values of collaboration and inclusion.

SOURCE Canadian Medical Association

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