2024-04-23 13:10:38
(Ottawa) The Canadian Medical Association is calling on the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors’ retirement savings.
Published at 9:10 a.m.
Nojoud Al Mallees The Canadian Press
Kathleen Ross, the association’s president, says many doctors practice as a small business and invest there for retirement.
The proposed changes would increase taxes on these investments, which the association says would add “increased financial pressure” to doctors who don’t have a pension to fall back on.
Ross says the change might also affect the recruitment and retention of doctors in Canada.
Doctors are the latest group to oppose the tax change, which is expected to affect wealthier Canadians and businesses more broadly.
The federal budget presented last week proposes to tax two-thirds rather than half of capital gains, or profits made on the sale of assets.
The increase in the inclusion rate would apply to capital gains above $250,000 for individuals, as well as to all capital gains realized by corporations.
“We have seen the government present this as tax fairness for every generation. But realistically, some members of the population will be more affected,” Ms. Ross explained in an interview.
But Ms. Ross pointed out that doctors would not qualify for the $250,000 exemption from the higher inclusion rate, since the investments they make are largely within companies.
The Liberal government has argued the tax change aims to level the playing field between those who earn income through capital gains and those who have jobs.
Economists in favor of this change say that increasing the inclusion rate improves the tax system by ensuring that all types of income are taxed equally.
Justin Trudeau’s government also presented the change as a way to increase the contribution of the richest to issues such as housing and health care for all Canadians.
Ottawa estimates that as a result of the capital gains tax change, only 0.13% of Canadians with an average income of 1.4 million would have to pay more taxes in a year given.
However, Ms Ross refuted the idea that doctors are highly paid.
“I have to combat the message that doctors are very well paid, given the long years of their professional training. And the fact that we graduate with significant debt,” Ms. Ross said.
According to the Canadian Institute for Health Information, the average gross income per physician in 2022 was $357,000. Independent doctors must also pay overhead costs such as rent and staff salaries from this amount.
Physicians can still invest in a registered retirement savings plan – which is tax-advantaged – as long as they pay themselves a salary from their company.
The Trudeau government defends its decision
At a press conference on Tuesday, Finance Minister Chrystia Freeland was asked regarding the doctors’ reaction.
She responded by highlighting the scale of government spending on health care, including money allocated in the budget for pharmacare, dental care and student loan forgiveness for doctors working in rural communities.
“I think Canada’s health professionals recognize, perhaps more than anyone, the importance of these investments,” said the Liberal minister.
“They’re massive and I think it’s absolutely appropriate, it’s really fair to ask the most successful in our society to pay a little bit more to fund them,” she added.
During a press conference, Prime Minister Justin Trudeau was also asked regarding doctors’ request to reconsider the tax change on capital gains.
His response ignored the concern of doctors that all their investments would be subject to a higher inclusion rate because they are made through their incorporated business.
“We need young people to have confidence in the future. So yes, we are asking the most successful people in this country to do a little more,” Trudeau said.
The Canadian Press’ health content receives funding through a partnership with the Canadian Medical Association. The Canadian Press is solely responsible for editorial choices.
1713908616
#Capital #gains #tax #Doctors #call #federal #government #reconsider
