My thanks to guest blogger Dr. Deepa Soni, an Emergency Room Physician at Credit Valley Hospital. She has written a much more eloquent letter to her MP about the recent tax changes introduced by the federal government, and allowed me to reproduce here as an open letter.
The Honourable Anita Anand,
MP, Oakville,
301 Robinson Street
Oakville, ON
L6J 1G7
April 20, 2024
Dear Minister Anand,
I’m writing to you as a constituent of your riding in Oakville regarding your government’s capital gains taxation measures introduced in this week’s budget.
As an emergency physician for the last 25 years, I and thousands of my colleagues in Ontario, were saving in our medical corporation to be able to fund benefits that many Canadians have available through their jobs: maternity leave, disability, and medical/dental benefits. In addition, and most importantly, incorporation allows us to save for our retirement as we do not have pensions (again, a benefit many Canadians, including government employees and civil servants have as part of their employment). Incorporation was a negotiated benefit that was given by the provincial government in lieu of increasing our fees, with the understanding that the structure would allow us to mitigate some of these factors about our career.
When planning for retirement under one set of assumptions, and then finding out that the federal government has moved the goal posts to extract revenue for its budget shortfall, you can understand why so many physicians are bewildered and disappointed by the Liberal government. This would be the equivalent of someone changing the terms of your pension or taking large chunks of it away. For many doctors, this will have profound impacts on their ability to retire when they thought they would.
In addition, as a daughter of first-generation immigrant parents, both of whom were physicians, I am certain you had a front row seat watching your parents work hard to obtain their medical degree, residency, and then establishing a practice. This is not to say that other Canadians don’t work hard: the one thing that makes doctors unique is that our fees are set by provincial governments and our fees have not risen to keep up with inflation. Unlike other incorporated professionals such as accountants, dentists, and skilled trades, physicians cannot increase their fees to make up for rising costs. We are locked into the fee schedule determined by provincial governments (who are always employing cost containing measures to balance budgets). The federal government is turning a blind eye to this important point as it does not fall under federal jurisdiction. Nevertheless, the impact cannot be ignored.
As a corporate lawyer prior to being elected an MP, I’m sure you would not have wanted your hard work and education to be characterized with the words ‘tax cheat‘ if you had been using a legal way to save for retirement. This is the narrative being circulated in the media and it is deeply disappointing. It is noteworthy that MPs receive an annual pay raise (this year ranging $8000-11900), along with pension and benefits. This makes an MP salary one of the highest earners in Canada, with guaranteed income through retirement.
Yet, it is doctors who are singled out as being in the wealthiest 1% and rhetoric implying that we are not doing our part for less fortunate Canadians. We pay into personal taxes and contribute to the economy like everyone else. As small businesses, doctors support the economy through employing staff (nurses, allied health, receptionists etc.), paying rent, and financially supporting many Canadian companies providing support services to our practices (electronic medical records, medical office supplies etc.).
We are also entrusted with caring for the population of Canada in the most sacred way. This taxation measure comes at a time when the medical profession in Canada is suffering unprecedented levels of burnout. Millions of Canadians cannot access a family doctor because they have closed their practises and left (in large part, due to rising costs and fixed fee schedules). Why in an era when attracting medical graduates to do family medicine is a priority, would your government eliminate one of the few advantages that help new grads set up comprehensive practices so they can care for Canadians from cradle to grave? Does your government understand the downstream effect this capital gains taxation will have on patients for decades to come?
From watching media interviews recently, it appears that the federal government’s solution to this is “we will just allow in more foreign doctors“. This is deeply hurtful on many levels: it devalues currently practising physicians who have put in their life’s work to bring excellent care to this country’s patients. In addition, it takes many years for a doctor to acclimatize to the healthcare system in Canada. What happens to patients in the meantime? The solution is not to “throw the baby out with the bathwater”. The solution is to step back and really take in the impact of these actions and the message that has been conveyed to the physicians of this country. I hope your government will rethink this and choose to act fairly regarding incorporation for medical professionals.
Sincerely
Deepa Soni MD CCFP(EM)
justanoldcountrydoctor 