Canadians divided after doctors say capital gains tax hike could push them to quit
An advocacy group representing Canadian doctors is urging the federal government to reconsider the capital gains tax hike.
The Canadian Medical Association (CMA) released a letter on Tuesday outlining its concerns surrounding the changes introduced in the 2024 federal budget.
Last week, Ottawa proposed a higher capital gains tax for wealthy, property-owning Canadians as part of its goal to improve tax fairness in the country.
The hike — which comes into effect on or after June 25 — will only impact a small portion (0.13%) of the wealthy population.
“To make Canada’s system fairer, the inclusion rate — the portion of capital gains on which tax is paid — for capital gains for individuals with more than $250,000 in capital gains in a year will increase from one-half to two-thirds. Individuals will continue to only pay tax on 50% of any capital gains up to $250,000 per year,” the government said in a press release following the budget announcement.
This inclusion rate will also increase to two-thirds for all capital gains corporations and trusts realize.
As an individual, your personal income taxes on capital gains will not increase if you are not part of the moneyed 0.13% of Canada’s population with an average income of $1.42 million.
However, the CMA says the changes to the capital gains tax inclusion rates will have negative effects on “physician recruitment and retention across the country.”
CMA is concerned that capital gains tax changes introduced in the 2024 federal budget will have adverse effects on physician recruitment and retention across the country. Our statement: https://t.co/Vc5k4LFqom
— Canadian Medical Association (@CMA_Docs) April 23, 2024
“While we support the health care investments announced by the federal government last week, proposed changes to the capital gains inclusion rates will have significant negative implications for physicians as most operate their practice as a small business,” explained CMA President Dr. Kathleen Ross.
Ross says that many community-based doctors have incorporated their practices to more efficiently deliver health services to their patients. She added that they also rely on their business as a means of saving for retirement since most don’t have access to employer retirement plans.
“Increasing the capital gains inclusion rate for corporations will create another barrier to retaining and recruiting physicians in a time when our health system and the providers within it are already under constant strain,” wrote Ross in the letter.
The CMA suggests that doctors are now confronted with the possibility of increased financial strain, especially when it comes to their ability to plan and save for retirement.
“The risk of already over-stretched physicians leaving the profession or reducing their hours in response to heightened taxation is real,” said Ross.
While Canadians have been dragging the wealthy, who are upset by the capital gains tax hike, many are divided on the CMA’s concerns.
Some see physicians as Tesla and Mercedes-Benz-owning millionaires.
people whining doctors will be impacted by the capital gains tax, i for one am glad since the asshole doctor who owns 2 walk in clinics here owns both a Tesla and Benz and is a millionaire while his clinics are filthy and do not have computers in any of the rooms like it’s 1980
— ratboy genius (@dogprom_2) April 23, 2024
One emergency room doctor and former Liberal MP explained his support for the capital gains tax changes on X.
“I am a physician and I am married to a physician. We will never have to worry about paying off our mortgage, making car payments or affording food,” posted Dr. Doug Eyolfson.
“If the changes in capital gains mean we pay more tax so that social programs are more economically viable, we’re okay with that.”
I am a physician and I am married to a physician. We will never have to worry about paying off our mortgage, making car payments or affording food.
If the changes in capital gains means we pay more tax so that social programs are more economically viable, we’re OK with that— Dr. Doug Eyolfson (@DougEyolfson) April 20, 2024
While others pointed out that not all doctors are in the same financial position as Eyolfson.
Doesn’t pay staff, rent, emr fees, cyber insurance. Doesn’t have to run an office outside the hospital. Hasn’t seen overhead costs rise 30% in the last 3 years while funding is flat. Didn’t have a 250k loan to become a doctor.
Not all doctors are in the same situation. Period.
— Dr. Michael Verbora (@mverbora) April 21, 2024
In his 60s and double the income because his wife’s a doctor too. Probably bought his house for $200k and paid it off quickly. No massive medical school debt bills. And likely help or inheritance from family. Oh and shocking – he’s a Liberal MP! lol 🤡🤡🤡 https://t.co/Ks0qqNhxsn
— ERdoc (@erdocAA) April 21, 2024
Canada: “Doctors please come to Canada and open up an incorporated practice. We need you!”
Also Canada: We’re now taxing ALL corporations 36% capital gains tax and a 55% rate on other income….
….we’ve also specifically excluded professionals from any tax credits. pic.twitter.com/7m1rGVlOIq
— Tablesalt 🇨🇦🇺🇸 (@Tablesalt13) April 19, 2024
The CMA isn’t the only advocacy group to denounce the capital gains tax hike.
Last week, over 150 Canadian CEOs and tech leaders penned an open letter calling for the federal government to stop the hike.
What are your thoughts on the CMA’s reaction to the tax changes? Let us know in the comments.
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