Juno News - Chrystia Freeland takes aim at Canadian doctors

00:00:00.000 so the capital gains tax increase is not as the government presents it going to be a panacea

00:00:14.400 and more importantly and i think this is the crucial point here it isn't just the super

00:00:19.420 wealthy that's being affected it isn't just the super rich they want to say that this is just a

00:00:25.120 billionaire tax but the reality is there are a lot of canadians they're going to be affected by this

00:00:30.300 capital gains tax increase that do not fall at all into that category of the super rich that don't

00:00:36.420 fall into the category of the super wealthy that certainly aren't living in gated communities or

00:00:41.160 flying on private jets or getting private health care necessarily and a lot of these people are

00:00:46.440 ordinary small business owners because remember it's people that own and operate small businesses

00:00:51.860 who are not given any carve out or any exemption whatsoever from this so yeah the super wealthy

00:00:59.120 are going to be hit by it but also small business owners and in particular we've seen from the medical

00:01:03.660 community in canada doctors who look at their professional corporations as being a vehicle to

00:01:09.080 save for retirement are being especially penalized for this i want to welcome into the show dr kathleen

00:01:14.680 ross who is the president of the canadian medical association dr ross good to speak with you thanks

00:01:20.000 for coming on today oh thank you very much for having me so let's just begin with the mechanics

00:01:25.180 of this why are physicians affected by this in a way that many other groups in canada are not

00:01:30.860 so it's important for canadians and policymakers to understand that medical corporations are not like

00:01:37.780 other conventional corporations and that is how many family physicians and other community-based

00:01:43.300 physicians operate uh we don't uh you know incorporate to to build a big practice so that

00:01:49.620 we can sell it uh but we do use our corporations to keep money uh for retirement and other major life

00:01:56.940 events like maternity care parental leave or sick leave uh and you know honestly with the with the

00:02:02.460 current nationwide shortage of of physicians particularly those delivering the kind of primary care community

00:02:09.160 access that we need this uh this is a challenge you're never going to be able to sell your shares

00:02:14.820 or or or make money off of a corporation yeah i think that's an important point and i would also

00:02:21.460 add here that you know yes doctors are paid well for the work that they do and i don't want to say the

00:02:26.400 doctors are are dealing with you know the economic hardships in a way that other people are but i think

00:02:31.220 it's easy to overstate how wealthy the average family physician is or especially you know rural physicians

00:02:37.060 and people often forget how much overhead they have as well to run their practices you know both in

00:02:42.080 terms of they're they're dealing with the effects of inflation as well and you know medical products

00:02:47.040 that they have to put in their offices are expensive so these people do not fit into this category of the

00:02:51.860 super wealthy but the government's messaging on this tax increase has been that it's basically just

00:02:56.640 billionaires who are affected yeah and i think that's just one piece of the misinformation that's come

00:03:01.820 out with the announcements over the last several weeks you know uh there are roughly 75 000 doctors

00:03:08.140 practicing in canada and half of those uh operate as professional medical corporations so the estimated

00:03:14.300 40 000 people impacted can't just be the doctors that she's talking about so i think we do have to take a

00:03:20.220 step back and and really understand this as as you mentioned self-employed physicians are responsible

00:03:25.820 for those critical infrastructure pieces so to provide the community office that patients are seen

00:03:32.220 in we cover those overhead costs you know like rent and staff and salaries and all the medical supplies

00:03:37.660 and office equipment and and at the moment that amounts to anywhere between 40 and 45 percent of our

00:03:43.060 gross clinical revenue and the funding and provision of that critical infrastructure is really not easily

00:03:49.560 replaced i'm assuming that when this was announced you were trying to engage your partners in the

00:03:56.680 federal government on this and i mean obviously from what we've heard there has not been a carve out for

00:04:01.240 doctors but did it seem like they were receptive to this concern at least at any stage in the process

00:04:07.000 so we've been presenting the information that uh that federal government asked about and they and they

00:04:11.720 asked some questions after the fact uh you know and we've presented our information i think in a fair

00:04:16.520 and balanced way particularly as this is being marketed as a tax fairness you know is this actually fair

00:04:23.800 to professionally incorporated physicians and the answer to that is no because unfortunately this will

00:04:30.120 mean maximum capital gains inclusion rate on the very first dollar that that earns capital gains inside

00:04:38.840 of a professional corporation there's no carve out at all that 250 000 that applies to individuals

00:04:46.040 or the 1.25 million that applies to other small businesses or corporations does not in any way

00:04:51.800 um apply to to professionally medical medical professional corporations so the other the other

00:04:57.480 piece that's really important because it was mentioned in today's announcement is that that we do

00:05:01.800 not have the ability to simply increase our fees to make up for tax increases or inflation as it relates to

00:05:09.160 overhead and uh and other professionals may well be able to pass those costs along and the thought

00:05:14.680 that we could just simply go and and adjust our provincial agreements to to make uh up for this

00:05:20.440 change at a federal level is is really misinformed so we do need to have these conversations we want to

00:05:26.920 continue to have these conversations and and really explain to the finance ministry how it is that the

00:05:33.080 healthcare system operates and and what role professional medical corporations have in delivery of critical

00:05:40.280 healthcare services to canadians and i should also point out i mean this isn't doctors exploiting a

00:05:45.640 loophole over the years governments have actively encouraged them to structure their businesses in

00:05:50.040 this way in lieu of fee increases have they not absolutely and uh and i think it's really important

00:05:55.800 to to reiterate and i know i've said it before but physicians train for a long time more than a decade

00:06:02.920 we don't start our careers till we're well into our 30s most often uh our rates are actually fixed for

00:06:09.160 what we can earn to pay off our debt and most uh graduate with an average debt of three hundred

00:06:14.760 thousand dollars that's a substantial setback and our careers are shortened because of how long it takes

00:06:20.520 to get where we're going so these are these are critical pieces to uh to consider we have to save for

00:06:27.480 our retirement and canada does have a great deal of social programs to support retirees but we are

00:06:34.600 highly trained professionals and uh and you're saving for our own retirement makes sense where it

00:06:39.480 may not make sense to to other pockets of workers in canada but i think we do we do need to consider

00:06:46.200 all of these things as we look at uh at shifting how we pay doctors and how we save for our retirement

00:06:53.080 so we know that there isn't going to be a carve out we know the announcement is forging ahead and

00:06:57.240 we know that as you indicated their doctors cannot just raise their fees to deal with this

00:07:02.200 so realistically what is going to come from this what's going to be the effect now that the genie

00:07:07.160 is out of the bottle if you will so i think there is still space there are ways that we could recognize

00:07:12.600 professional corporations and and allow them to have the 250 000 personal exemption uh that's afforded

00:07:19.400 to individuals because our medical corporations are in fact us as individuals the other piece would be to

00:07:25.720 uh to look at uh including medical corporations in the 1.25 million lifetime exemption uh and again

00:07:33.160 these are these are possibilities and i think although the the bill has been proposed there's

00:07:37.960 still space for us to have this conversation and and we want to make sure that we're sharing the right

00:07:42.840 information so that the government can make appropriate decisions uh and uh and not risk destabilizing

00:07:49.640 the critical parts of our healthcare system that that we need we need physicians setting up in

00:07:54.600 community practice carrying that infrastructure and providing services to canadians and you know

00:08:00.200 we're already a little bit beleaguered and and worn down and uh and carrying the burden of a

00:08:05.560 healthcare system that in many ways is crumbling around us we don't need another reason

00:08:11.400 to discourage physicians from setting up the practices and delivering the services that canadians need

00:08:16.280 so do i take from that that you remain at least in some way optimistic that there is still a way

00:08:22.360 to deal with this the door is still open i think there's still time to have a conversation about the

00:08:28.280 uniqueness of medical professional corporations and we want to have those those discussions

00:08:35.800 all right well dr kathleen ross from the canadian medical association thank you so much for your time

00:08:40.280 much appreciated take care thanks for listening to the andrew lawton show support the program by donating

00:08:46.280 to true north at www.tnc.news

Juno News - June 15, 2024

Chrystia Freeland takes aim at Canadian doctors

Episode Stats

Summary

Transcript