Achi news desk-
Health Minister Mark Holland says that while he “greatly appreciates” the work that doctors in Canada are doing, the federal government has no plans to scrap the proposed capital gains tax changes outlined in the latest budget, despite opposition from the Canadian Medical Association (CMA).
“I think these are fair changes, there are still a lot of tax benefits, benefits accrued to them, that will be maintained and will continue,” Holland told CTV’s Question Period host Vassy Kapelos, in interview broadcast on Sunday.
The budget proposes to increase the inclusion rate on capital gains from 50 per cent to 67 per cent for individuals earning more than $250,000 in capital gains in a year, and for all corporations and trusts, without the lower threshold that.
That means the proportion of capital gains that is taxed increases, a change the government says will bring in more than $19 billion over the next five years.
But doctors have raised concerns about the proposal, warning that it could undermine their retirement plans, because many of them have incorporated their medical practices.
Prime Minister Justin Trudeau has dismissed the concerns, saying the change is about “fairness,” while Dr. Kathleen Ross, head of the CMA, told CTV News Channel’s Power Play that it feels like a “beat down ,” for “already morally defeated. and a beleaguered physician workforce emerging from the pandemic. “
He said GPs were “encouraged” by the states 15-20 years ago to incorporate as a “retirement saving vehicle” … “in lieu of higher fees at the time.” Ross added that the CMA estimates that about eight percent of doctors’ retirement savings will be “captured” by the tax change, which he called “significant.”
According to the CMA, more than two-thirds of Canadian doctors are incorporated.
When asked by Kapelos if it can be interpreted from the comments of the prime minister and cabinet ministers that doctors are going to be forced to pay more to subsidize government spending, Holland said “not at all.”
“I really appreciate the work that doctors do, and nurses do, personal support care workers, the work that everyone in our health system does is absolutely amazing,” said Holland, adding that the intention behind the increase in capital gains tax is to get those who have “seen their wealth grow enormously” to pay more to reduce the “huge inequality” in society.
Kapelos then pressed further, asking if Holland believes doctors deserve to keep more of the wealth they’ve worked for.
“Of course they work for their assets,” said Holland. “But look, we can choose what kind of society we live in. Do we want to be in communities where there are huge discrepancies?”
According to the Canadian Institute for Health Information, the average gross payment per physician in Canada in 2022 was $357,000, including family physicians, specialists, and surgeons. But incorporated doctors also pay their staff, and for their practice expenses, from that amount.
Holland said, however, that there is “misinformation” circulating about the effects of the capital gains tax change on doctors, and despite the increase in the inclusion rate, there are still many tax advantages to incorporating.
“We want, obviously, to work with them to make sure — and I know they are very concerned about this fairness within the whole country — that we make investments in things as health care, and that there is a health system that is there. , they work in it, which works well for them, and for their patients,” he said.
With files from CTV’s Question Period Senior Producer, Stephanie Ha
