CMA warns against capital gains hike impact on medical practices

The Canadian Medical Association (CMA) has received widespread feedback from physicians across Canada regarding the proposed increase to the capital gains inclusion rate and its potential impact on medical practices.  

This comes at a time when access to community-based care is a significant concern for Canadians.   

Kathleen Ross, CMA president, stated, “The reality is that the federal government is putting at risk its own health care agenda, which is contingent on broadening access to family medicine, the foundation of our health care system.” 

“We're hearing from physicians who feel betrayed, discouraged, and deflated by this latest development. We must not create more roadblocks that will add further stress to the health workforce or prevent prospective physicians from choosing to practise in Canada,” she continued.    

The CMA is worried that increasing the capital gains inclusion rate for professional corporations will further hinder efforts to retain and recruit physicians, especially given the current strain on the health system.  

Many community-based physicians have incorporated their practices to deliver health services efficiently. Most physicians lack access to employer or government pension plans, benefits, sick leave, maternity leave, or paid vacation, and cannot raise fees to cover new or rising expenses.  

Instead, they depend on their professional corporations to save for these essential life events.   

Physicians have voiced several concerns to the CMA following the announcement of the capital gains changes:   

Shorter Career Spans: Physicians typically begin their careers in their 30s after over a decade of medical education, often with an average debt of $300,000. The compressed career span makes it challenging to save for retirement.   

Healthcare Infrastructure: Physicians usually purchase or rent the necessary infrastructure for community medical care, including office space, equipment, technology, and staff. New physicians might avoid community-based practice, leading to a care and infrastructure deficit.   

Physician Shortage: With a global shortage of physicians, it's crucial to create favourable conditions to attract and retain doctors to expand access to care.   

Canadians share these concerns. According to a recent Abacus Data survey, 76 percent of respondents who expressed an opinion on the policy proposal want the government to reverse the proposed tax change. 

The CMA believes that an exemption for medical professional corporations is essential to stabilize and secure access to community-based medical care for patients now and in the future. This exemption would acknowledge the various medical practice structures that physicians have used for decades.