In this episode of The Lawton Show, Andrew Lawton is joined by Conservative MP Adam Chambers to talk about the Liberal government's failure to live up to its promise of raising the capital gains tax to 20% and the impact on Canada's economy. Also, the Bank of Canada announces that interest rates are going to come down as well.
00:16:51.540They want to say that this is just a billionaire tax,
00:16:55.000but the reality is there are a lot of Canadians
00:16:57.500they're going to be affected by this capital gains tax increase that do not fall at all into
00:17:02.740that category of the super rich that don't fall into the category of the super wealthy that
00:17:07.460certainly aren't living in gated communities or flying on private jets or getting private
00:17:12.120healthcare necessarily and a lot of these people are ordinary small business owners because remember
00:17:17.160it's people that own and operate small businesses who are not given any carve out or any exemption
00:17:23.560whatsoever from this. So yeah, the super wealthy are going to be hit by it, but also small business
00:17:29.900owners. And in particular, we've seen from the medical community in Canada, doctors who
00:17:33.960look at their professional corporations as being a vehicle to save for retirement
00:17:38.500are being especially penalized for this. I want to welcome into the show, Dr. Kathleen Ross,
00:17:43.660who is the president of the Canadian Medical Association. Dr. Ross, good to speak with you.
00:17:48.360Thanks for coming on today. Oh, thank you very much for having me.
00:17:51.440So let's just begin with the mechanics of this. Why are physicians affected by this in a way that many other groups in Canada are not?
00:17:59.900So it's important for Canadians and policymakers to understand that medical corporations are not like other conventional corporations.
00:18:07.980And that is how many family physicians and other community-based physicians operate.
00:18:13.240We don't incorporate to build a big practice so that we can sell it.
00:18:19.520But we do use our corporations to keep money for retirement and other major life events like maternity care, parental leave or sick leave.
00:18:29.400And, you know, honestly, with the with the current nationwide shortage of physicians, particularly those delivering the kind of primary care community access that we need, this this is a challenge.
00:18:41.420You're never going to be able to sell your shares or make money off of a corporation.
00:18:47.520Yeah, I think that's an important point.
00:18:49.360And I would also add here that, you know, yes, doctors are paid well for the work that they do.
00:18:54.140And I don't want to say the doctors are dealing with, you know, the economic hardships in a way that other people are.
00:18:59.140But I think it's easy to overstate how wealthy the average family physician is or especially, you know, rural physicians.
00:19:05.580And people often forget how much overhead they have as well to run their practices, you know, both in terms of they're dealing with the effects of inflation as well.
00:19:14.220And, you know, medical products that they have to put in their offices are expensive.
00:19:17.500So these people do not fit into this category of the super wealthy.
00:19:21.220But the government's messaging on this tax increase has been that it's basically just billionaires who are affected.
00:19:27.380Yeah. And I think that's just one piece of the misinformation that's come out with the announcements over the last several weeks.
00:19:32.860You know, there are roughly 75,000 doctors practicing in Canada and half of those operate
00:19:39.820as professional medical corporations. So the estimated 40,000 people impacted can't just
00:19:44.860be the doctors that she's talking about. So I think we do have to take a step back and
00:19:49.820really understand this. As you mentioned, self-employed physicians are responsible
00:19:54.780for those critical infrastructure pieces. So to provide the community office that patients are
00:20:00.380seen in we cover those overhead costs you like rent and staff and salaries and all the medical
00:20:05.660supplies and office equipment and and at the moment that amounts to anywhere between 40 and 45
00:20:11.180of our gross clinical revenue and the funding and provision of that critical infrastructure
00:20:16.700is really not easily replaced i'm assuming that when this was announced you were trying to engage
00:20:23.900your partners in the federal government on this and i mean obviously from what we've heard there
00:20:28.540has not been a carve out for doctors but did it seem like they were receptive to this concern
00:20:33.100at least at any stage in the process so we've been presenting the information that that federal
00:20:38.460government asked about and they and they asked some questions after the fact uh you know and
00:20:42.940we've presented our information i think in a fair and balanced way particularly as this is being
00:20:48.060marketed as a tax fairness you know is this actually fair to professionally incorporated
00:20:54.060physicians and the answer to that is no because unfortunately this will mean maximum capital gains
00:21:00.860inclusion rate on the very first dollar that that earns capital gains inside of a professional
00:21:08.540corporation there's no carve out at all that 250 000 that applies to individuals or the 1.25
00:21:15.740million that applies to other small businesses or corporations does not in any way apply to
00:21:21.580to professionally medical, medical professional corporations. So the other, the other piece that's
00:21:26.460really important because it was mentioned in today's announcement is that we do not have
00:21:30.980the ability to simply increase our fees to make up for tax increases or inflation as it relates
00:21:37.500to overhead and other professionals may well be able to pass those costs along. And the thought
00:21:43.320that we could just simply go and adjust our provincial agreements to make up for this change
00:21:49.420at a federal level is is really misinformed so we do need to have these conversations we want to
00:21:55.420continue to have these conversations and and really explain to the finance ministry how it
00:22:01.260is that the health care system operates and and what role professional medical corporations have
00:22:07.660in delivery of critical health care services to canadians and i should also point out i mean this
00:22:12.540isn't doctors exploiting a loophole over the years governments have actively encouraged them to
00:22:17.420to structure their businesses in this way
00:22:19.420in lieu of fee increases, have they not?
00:22:21.840Absolutely, and I think it's really important
00:22:24.480to reiterate, and I know I've said it before,
00:22:28.140but physicians train for a long time, more than a decade.
00:23:39.420There are ways that we could recognize
00:23:41.240professional corporations and allow them to have
00:23:44.180$250,000 personal exemption that's afforded to individuals because our medical corporations are
00:23:50.500in fact us as individuals. The other piece would be to to look at including medical corporations
00:23:57.380in the 1.25 million lifetime exemption and again these are possibilities and I think although the
00:24:05.140the bill has been proposed there's still space for us to have this conversation and we want to
00:24:09.940make sure that we're sharing the right information so that the government can make appropriate
00:24:13.940decisions and not risk destabilizing the critical parts of our healthcare system that we need. We
00:24:21.160need physicians setting up in community practice, carrying that infrastructure and providing services
00:24:26.660to Canadians. And, you know, we're already a little bit beleaguered and worn down and
00:24:32.040carrying the burden of a healthcare system that in many ways is crumbling around us.
00:24:37.240We don't need another reason to discourage physicians from setting up the practices and
00:24:43.100delivering the services that Canadians need. So do I take from that that you remain at least
00:24:48.320in some way optimistic that there is still a way to deal with this? The door is still open. I think
00:24:54.440there's still time to have a conversation about the uniqueness of medical professional corporations
00:24:59.640and we want to have those those discussions. All right well Dr. Kathleen Ross from the Canadian
00:25:06.520Medical Association thank you so much for your time. Much appreciated. Take care. All right thank
00:25:11.580you i know it's interesting and you maybe wonder okay why am i highlighting one particular group
00:25:15.980because it's a group that really challenges that line we just shared that cliff week shared from
00:25:21.180christia freeland talking about this as being the domain of those with private jets and those with
00:25:25.820gated communities and all that not to say there aren't you know some doctors that live in gated
00:25:29.340communities but the point here is that this is not just about the billionaires and this is not also
00:25:35.180even if it were, I don't believe for a second that Galen Weston paying more in capital gains tax
00:25:42.100is going to prevent all of those issues that the federal government just spoke about. And by the
00:25:46.280way, the federal government has shown no willingness or no ability to balance the budget in general.
00:25:51.800They have a spending problem, not a revenue problem. So all that's going to happen when
00:25:56.140they get this windfall is spend more money. That's what they're going to do when they get this big,
00:26:01.160giant windfall from everyone selling off their assets right now. They're just going to say,
00:26:04.740oh great, look, we're not going to pay off the credit card. We're not going to invest in anything.
00:26:09.340We're just going to spend more money to buy more votes in an election year. This is what they do
00:26:14.160every time. And they try to then say that the issue is one of revenue and we can just go after
00:26:18.760the rich, get more money from the super rich. And we'll forget that the government is also going
00:26:23.420after you and I for money. The carbon tax, which incidentally, it's funny how Justin Trudeau likes
00:26:28.760to point to the carbon tax and say that this is an example of us getting 88 out of 10 Canadians
00:26:36.060getting more back than we're spending. And oh, even the parliamentary budget officer has said
00:26:39.680as much, yada, yada, yada. Well, the parliamentary budget officer also said last week that he's been
00:26:45.040gagged from sharing the government's analysis on the carbon tax, that the government does not want
00:26:49.960him to talk about the analysis. So they aren't actually letting him say what he really knows
00:26:56.160and believes and has found about the carbon tax and you may wonder if it is all as rosy as the
00:27:02.240feds are making it out to be why would they not want canadians to have it why would canadians
00:27:07.540don't want to have the analysis probably the same reason that they don't want canadians
00:27:10.880to have the legal analysis they got in the lead up to using the emergencies act uh we'll move on
00:27:16.440from the the capital gains uh tax in just a moment but i wanted to welcome in chris sims who
00:27:20.680is the alberta director with the canadian taxpayers federation which has come out today
00:27:24.920and called on the conservatives and members of parliament in general to vote against this
00:27:31.280increase when it goes before the parliamentarians. Chris, good to talk to you. Thanks so much.
00:27:36.740This is an issue where, and I've been saying this for the last 20 minutes or so,
00:27:40.620the government is trying to make this out to be this assault on the wealthy. They're trying to
00:27:44.360do the populism thing, but there are a lot of people whose investments are not at all putting
00:27:49.340them into that billionaire category that are going to stand to lose here. And more importantly,
00:27:53.380it's the tax like even if you don't care about the people who are affected I take the view that
00:27:58.200when government is looking for more revenue sources there's a fundamental problem there
00:28:03.120yeah for sure I listened through to the top of your show and I didn't think it was possible
00:28:08.040but I think Minister Freeland's worse at communicating than Prime Minister Trudeau
00:28:12.740in many cases that was insufferable she was going really going through that list I realize now most
00:28:19.400of the time um because i worked in the industry so long sometimes i just can't stand listening to
00:28:24.000it i'll watch stuff on subtitles i'll mute it and i'll watch it on subtitles in order to get the
00:28:28.080gist of it to do my work but for her saying that we shouldn't be passing along debt to our children
00:28:35.460and the next generation she's the finance minister like she is right like we're not
00:28:42.760and has been for uh i forget when morno left but for a few years and then morno was there before
00:28:48.200but like she's been in power for nine years and she's looking at like this massive inequality the
00:28:54.460peasant storming the gated communities and it's like look at what's happening in this country yeah
00:28:58.780sure I would agree but you've been the one there you're on the other side of the fence there
00:29:04.640darling this is it like when Dustin Trudeau took a knee in the Black Lives Matter protest like
00:29:08.800they're protesting you he's like he's looking around I hope that I hope they don't know that
00:29:13.100i'm actually out here and this is you know i leave i try to give people pro tips quite often
00:29:17.580a free pro tip to the to the minister stop talking like that stop saying you know don't
00:29:24.560do that i don't care which party you're in stop doing that because you're going to irritate people
00:29:29.400because you're condescending towards them so don't do that but more importantly with it with
00:29:33.920the issue of the capital gains tax so anecdotally and personally so i was in the hospital with a
00:29:40.040friend of mine a few weeks back or a few months back rather a young friend of mine who was having
00:29:45.420cardiac issues and so we talked to two cardiologists totally unrelated they didn't know where I worked
00:29:51.940like taxes are the last thing that usually come up they two of them mentioned this capital gains
00:29:58.380tax thing so I'm really glad that you were able to speak with the Canadian Medical Association
00:30:02.700spokesperson there to highlight this because I think unless you have like a doctor who's a sibling
00:30:07.580or in the family or something you may not know how they're structured so they're not in line for
00:30:13.660a pension okay in the same way say a nurse would be in line for a pension or a police officer
00:30:19.820doctors have to you know feather their own nest and finance their own future and so again like
00:30:24.940you pointed out they're not about to line up at food banks but we have to be cognizant of how
00:30:29.820they financially structure themselves and according to this one doctor i was talking to apparently
00:30:35.020the government had basically said a generation ago, Andrew, okay, guys, this is how you can do
00:30:40.700it. Use capital gains, structure yourself as a corporation, and this is how you can do it. In
00:30:46.060the same way that we don't pay capital gains tax on the sale of a primary residence. So your own
00:30:52.000home that you're living in and that you own, when you sell it, you don't pay income tax on the money
00:30:56.760you make from that. Now, again, the federal government is sniffing around that really hard
00:31:00.880on a home equity tax but for more than a generation now it's been understood that you don't touch that
00:31:06.240well apparently that's how a lot of doctors are feeling right now too and so they got to really
00:31:11.760pay attention to this because i'm not sure we can afford to lose any doctors who are probably
00:31:16.240thinking of heading to the states because of this yeah that's the thing and when uh dr ross had
00:31:22.080pointed out i think a fair valid point here that a lot of people don't realize or don't necessarily
00:31:26.960take into consideration that they can't just raise their prices not that i support when companies are
00:31:31.920doing that as a customer it's just i realize that's their option you can you know either
00:31:36.160lower your overhead or raise your revenues that's what you do whereas doctors can't just do that so
00:31:40.720they either have to really start cutting back and the last thing you want is the doctor that
00:31:44.960you know can't afford to pay the rent or the doctor that oh maybe we reuse these things because
00:31:50.800you know it's like you don't want to push them into a place where in their practices they're
00:31:54.160they're cutting corners because that's the only option they have to lower costs.
00:31:58.480Yeah, exactly. And so, and again, for people, I loved how you pointed out that the narrative is
00:32:04.220that if you just tax the daddy warbucks, if you find the monopoly man, that one guy, and you tax
00:32:09.960the bejesus out of him, that all of our social problems will go away. Like it's such a ridiculous
00:32:14.640way of trying to explain this to people. I wanted to put a bit of a number on that. So it's between
00:32:19.780four and five days. So Franco Teresano and our team in Ottawa crunch these numbers and apparently
00:32:25.460the amount that the government is planning on making from this capital gains tax increase
00:32:31.060is going to be gone in like five days. So at the rate of the Trudeau government spending,
00:32:37.860this big long thing that they're making is a standalone vote in the House of Commons,
00:32:41.780this is a hill to die on, it's going to solve all of our social problems, a chicken in every pot.
00:32:45.860no it's gonna be toast in like five days so i have lunch meat for my kids upstairs in the fridge
00:32:52.100that's gonna last longer andrew than that money it's like the liz trust lettuce thing uh we should
00:32:58.100do like a live cam and see where we're going there uh i wanted to turn to another issue here i i
00:33:03.460mentioned the parliamentary budget officer being gagged this is proving to be like a great pastime
00:33:08.820of the government they're going full uh 50 shades of gray not just on the parliamentary budget
00:33:12.820officer but uh they're also they're also going after the oil and gas sector here and it was
00:33:18.500amusing because a few weeks back charlie angus introduces this private members bill uh basically
00:33:23.600making it so that if anyone says oil is good you get you know hauled off to one of his you know
00:33:27.760communist gulags or whatnot and uh now like that was like a punchline everyone's like oh charlie
00:33:32.980angus what a nutcase and now the liberals are basically doing it with the oil and gas sector
00:33:37.680yeah so i i don't have all the details but i was reading up on it a bit this morning because your
00:33:42.120colleague, Rachel Emanuel, very smartly flagged it on Twitter and said, guys, what's going on here?
00:33:48.040So apparently, this is generally what's happening. If you are an oil and gas company and you publish
00:33:55.480the fact that, say, you are capturing CO2, like at the other end of your production pipe, you're
00:34:00.680capturing it somehow. And this is having this kind of an impact on the environment. Apparently,
00:34:05.740the Trudeau government is looking to do some sort of embedded fact check sort of thing.
00:34:11.640So some panel somewhere will be able to decide whether or not to sue you as an environmental
00:34:17.960organization, meaning the energy company, and say that you have to prove all of that based on this
00:34:23.960international panel of experts. Just imagine what their standards are. And so this is a little bit
00:34:29.240concerning, and it's something that the minister here in Alberta, Rebecca Schultz, was flagging,
00:34:33.480saying we can't go down this road because this is censorship. This is a strange gag law. You're
00:34:39.080attacking our energy industry again. And so it's definitely something to keep an eye on. Apparently
00:34:44.280it's before the Senate right now. So we're going to be kicking some tires on this thing this week,
00:34:48.440but some to say it looks like the Trudeau government is attacking Alberta's energy sector
00:34:54.120again, but this time in a weird sort of censorship fact check, you can't prove that sort of way.
00:35:01.160And again, that's another way for an oil and gas company to be hindered, right? To have a pack
00:35:06.840of international groups on their back all the time trying to reduce their ability to produce product
00:35:12.120very similar in the way that they were trying to ban pipelines the way they were trying to
00:35:16.200ban tankers it just seems like they're trying to put through just transition and put people
00:35:20.440out of jobs so it just seems like a never-ending attack largely against alberta's main sector the
00:35:25.880energy sector but this time it's kind of strange it's a almost a censorship version of it so
00:35:30.600definitely something we have to look into yeah and it's buried in the budget and anytime they
00:35:35.160take something of this nature and slip it in the budget we should always be mindful because they're
00:35:38.680trying to hope that it's not big enough that it would rise to the point of bringing up outrage
00:35:43.880but they wouldn't want to just want to keep it under the radar which is why no one really paid
00:35:47.400attention when the budget was first announced yes exactly uh if that can a couple of things for
00:35:52.360people uh one figure out how to read a budget i know it can get cumbersome i think the last
00:35:58.440federal budget was i think it was 600 pages or something crazy like just inexcusably long
00:36:04.360It's padded with way too much social stuff and not the actual these are the numbers, these are the
00:36:08.840facts, let your feelings to be determined after the fact. There's a lot of feelings packed in there
00:36:14.200but I would just definitely recommend that people get used to looking towards the back and the annex
00:36:18.760and looking at historical data tables on where spending has gone, where taxes have gone and then
00:36:24.600really try to scour it and try to find any new taxes that are buried in there. Provincial budgets
00:36:30.040are usually a better place to start because they're usually much more straightforward and a lot
00:36:34.040shorter. There isn't a lot of filler shoved in there. And so I would start there. That's how we
00:36:39.020found the Netflix tax in British Columbia. That's how we found out, for example, they were removing
00:36:43.860the PST exemption on soda pop there. It's those details that will eventually nickel and dime you
00:36:49.320to death. And they represent new taxes. But again, this seems like something that isn't even a tax
00:36:54.460issue. And so to have them put it in the budget, it's just really head scratching. So we're
00:36:59.340definitely going to be taking a look at that. Yeah, you mentioned the Netflix tax, by the way,
00:37:03.080You and I have been around long enough into politics to remember when Stephen Harper was just relentlessly mocked by the media for saying the liberals were going to tax your Netflix show.
00:37:12.660And now, admittedly, Stephen Harper, we should play the clip.
00:37:14.980It was really, I watched it not that long ago.
00:37:17.000It was one of those, like, Stephen Harper trying to be relatable clips where it's like he's listing TV shows he likes and it's not believable that he's ever seen any of the shows.
00:37:25.540He's like, I particularly like Breaking Bad.
00:37:29.320uh like it was like i particularly like insert popular show here but but he was right i mean
00:37:35.300the core point was well breaking bad is a good show he was right about that but he was right
00:37:39.120that the liberals were going to tax netflix now it took them a decade but he wasn't lying
00:37:43.040no he still did it it's the same as when he was saying they're gonna have little itty bitty
00:37:47.960deficits meanwhile there's a 40 billion dollar deficit and the finance minister is scolding
00:37:54.600reporters about passing down debt to the last generation and her government has doubled the debt.
00:38:01.160It's kind of crazy pills. You start wondering if you're in the same sort of timeline of reality
00:38:05.480as everybody else. But yeah, I remember when he said that. It was during the 2015 election campaign.
00:38:11.160And yeah, it was similar. So the funniest thing, I can't repeat the funniest thing I saw him say
00:38:16.280once on the CBC because it's, you know, that way. But the other funniest thing I saw him say once
00:38:21.160is when they remember when they asked him if he had ever if he smoked marijuana yeah and he said
00:38:26.440yeah wasn't his answer well i have asthma i've never smoked anything or something no it was
00:38:30.820better he's like do i look like i smoke marijuana oh he just did this deadpan to the camera i think
00:38:38.240he had like a sweater vest on and stuff while he was doing it but no i remember when that was like
00:38:43.040the question that could sink your political career like that that shows that now now it's like we
00:38:47.760of a leader who's like i smoked it while i was in office and he still gets elected not today why
00:38:53.500yeah of course it's quite bizarre and so this is where i just i want to bring it back to
00:38:58.080affordability and taxes for a second and i just really wanted to stress to people
00:39:01.580um i heard this i heard the capital gains tax brought up on my local fm rock station like a
00:39:10.520couple djs in the morning talking about it and so i wanted to urge people this has trickled down to
00:39:16.080the normal people like the people who don't follow politics shows like this people who don't follow
00:39:20.640the play-by-play in the house of commons average working people now are talking about this and so
00:39:25.760a little bit of homework if i can take this and tell it to your sister and your brother-in-law
00:39:31.760and all of the normies in your family who don't live and breathe politics and tell them how it's
00:39:36.960going to affect them and namely how quickly trudeau is going to burn through this money
00:39:41.440because of his spending habits i think there's a chance that we can get the majority of politicians
00:39:47.840to eventually be opposed to something like this if we get enough people at the door angry about this
00:39:53.440okay we've got something for you chris sean has earned his keep today sean take it away
00:39:58.240something you might not know about me is that i love movies and tv shows one of my all-time
00:40:04.160favorites is breaking bad it's even available on some online streaming services if you've never
00:40:09.520seen it. But I'm running for Prime Minister, so why am I talking to you about TV shows?
00:40:15.000Because some politicians want to tax digital streaming services like Netflix and YouTube.
00:40:20.960Some have even called on us to introduce a Netflix tax. Now Justin Trudeau and Thomas
00:40:25.820Mulcair have left the door wide open to doing just that. I'm 100% against a Netflix tax.
00:40:32.980Always have been, always will be. So the choice is clear. Only our Conservative Party can be
00:40:37.820trusted to focus on the needs of canadian consumers and to keep your taxes low only our
00:40:43.820party can be trusted not to bring forward a new netflix tax i like movies and tv shows
00:40:54.700i'm making fun of him i i loved how honest he and authentic he was about that he never tried to be
00:41:00.060cool and when he did like let loose he was always very fun like when he was singing and stuff like
00:41:05.260that but yeah uh in any case yeah he was right stephen harper called it right there and i must
00:41:10.620stress the liberal party at the time the tweet's still up said we will never never bring in a
00:41:16.940netflix tax have a good day like sunny way remember how that used to be their communication that was
00:41:22.060so much nicer and now they're doing one better not just the tax but also and we're going to
00:41:25.820manipulate what you see on the home page of it and you will like it no so good good job pulling
00:41:32.460that up. That was a blast from the past for sure. All right. Well, thanks Sean there. Chris Sims
00:41:36.840from the Canadian Taxpayers Federation. We will see you next week. Thanks for coming on as always.
00:41:41.220You bet. All right. Now I should, I was not going to bring this up because I went through like
00:41:45.760painstaking efforts to hide it from you, but it's amusing now. And I may have to like crowdfund a
00:41:51.660new computer. So like 10 minutes into the show, I spilled half of my coffee on my laptop. And so I
00:41:58.820was like furiously like trying to avoid you seeing me wipe it up with a shirt which i've probably now
00:42:04.140ruined because it was the only thing i had available so anytime there was a guest on the
00:42:08.100screen uh assume that i was like doing this and sean was like very graciously not throwing the
00:42:14.020camera back to me but uh i don't know my computer is not it's not in in flames so uh we'll see it
00:42:19.140might just smell like uh smell like americano uh anyway all right thank you so much to everyone
00:42:24.520for tuning in. We'll be back tomorrow with more of Canada's most irreverent talk show. This is
00:42:29.480the Andrew Lawton Show here on True North. Thank you, God bless, and good day to you all.
00:42:34.380Thanks for listening to the Andrew Lawton Show.
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