The Canadian Medical Association (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.CMA President Dr. Kathleen Ross, who practices in BC, made her concerns known in a press release this week."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. These changes could jeopardize ongoing efforts across Canada to recruit and retain a high-quality health workforce," Ross wrote."Many community-based physicians have incorporated their practices as a means of efficiently delivering health services to Canadians. They also rely on their professional corporations as a means of saving for retirement since most do not 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."The CMA estimated in 2017 that 66% of doctors incorporated their practice. Now taxes are so bad, even doctors feel the pinch."Physicians now find themselves confronted with the prospect of increased financial strain, particularly as it relates to their ability to plan and save for retirement. This not only undermines the well-being of health care professionals, it jeopardizes the stability of our struggling health care system. The risk of already over-stretched physicians leaving the profession or reducing their hours in response to heightened taxation is real," Ross wrote."The CMA urges the federal government to reconsider these proposed tax adjustments and to take proactive steps to address the concerns raised by the medical community. Our health system and the people who work tirelessly to prop it up cannot withstand yet another setback."For capital gains and losses realized on or after June 25 2024, federal Budget 2024 increases the rate from 50% to 66.7% for all corporations, trusts and individuals, but only with respect to the portion of capital gains or losses realized annually that exceed $250,000.
