Achi news desk-
OTTAWA –
The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors’ retirement savings.
Kathleen Ross, president of the association, says many doctors incorporate their medical practices and invest for retirement inside their corporations.
The proposed changes would increase taxes on those investments, something the association says will add “financial stress” to doctors who don’t have a pension to rely on.
Ross argues that the change could also affect the recruitment and retention of doctors in Canada.
Doctors are the latest group to come out against the tax change, which is expected to largely affect wealthier Canadians and businesses.
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 so-called inclusion rate increase would apply to capital gains over $250,000 for individuals, and all capital gains realized by corporations.
“We have seen this portrayed by the government as tax fairness for all generations. But realistically, some members of the population are going to be more affected,” said Ross in an interview.
The Liberal government has argued that the tax change is about leveling the playing field between those who earn income through capital gains versus employment.
They are also selling the change as a way to make the rich pay more to support things like housing and health care for all Canadians.
But Ross pointed out that doctors would not qualify for the $250,000 exemption to the higher inclusion rate, since the investments they make are largely inside corporations.
Doctors can continue to invest in a Registered Retirement Savings Scheme – which has a tax advantage – as long as they pay themselves a salary out of their corporation.
In a statement, a spokeswoman for Finance Minister Chrystia Freeland said the federal government was changing the capital gains inclusion rate “because it is unfair that a nurse pays a higher marginal tax rate than a multi-millionaire.”
“These changes are in addition to the $200 billion we’re investing in health care and better student loan forgiveness for doctors and nurses who want to work in rural and remote areas,” said Katherine Cuplinskas.
This report was first published by The Canadian Press on April 23, 2024.
