Group of doctors writes to Morneau supporting proposed tax changes

VANCOUVER (NEWS 1130) – When Finance Minister Bill Morneau announced plans to reform the tax rules for small businesses, many Canadian doctors freaked out and claimed the results would be catastrophic. But more than 300 physicians and medical students are taking the opposite stand.

They’ve signed an open letter to Morneau, saying they want their voices to be heard above the din of criticism from colleagues and medical societies.

Among other things, Morneau wants to stop allowing some tax-saving mechanisms through incorporation that physicians say are essential given that they have no access to benefits other employees enjoy. Angry medical associations say doctors will leave Canada for the US, and female physicians will be disproportionately hurt.

Signatories to the open letter see it differently. They argue that scrapping the current system will promote tax fairness and give the government more money to spend on health care.

“We need adequate tax revenues to fund social programs such as affordable housing, pharmacare, social assistance, legal aid, and the healthcare system itself.”

“These programs directly impact the health of our patients, and we believe it is important for us to contribute to their sustainability through an adequate tax base.”

Rita McCracken, a family doctor in Vancouver who says she was bombarded with advice on incorporating to save taxes even when she was in medical school, expressed disappointment at what she considers reactionary physician organizations who should be pushing for improvements to the health-care system.

“We who have signed on to this letter believe in an equitable tax system where people who earn more money should pay more taxes,” she says.

“A lot of the reason why there was concern weren’t really ringing true for me. In particular, the presentation of physicians as being a financially vulnerable group.”

She says any suggestion the proposed measures are “anti-feminist” is misguided. She adds this debate over tax loopholes distracts from more worthwhile debates over health benefits, parental leave, and pension plans.

Canadian Medical Association data suggest a large majority of physicians are incorporated. That means they can access various measures to reduce their taxes despite earning significantly more on average — upwards of $225,000 annually before taxes — than other Canadians.

“These benefits are advantageous mostly to certain incorporated doctors,” the letter states. “It also seems unfair that these benefits are not available to Canadians with similar incomes who cannot incorporate.”

The physicians do say in their letter the proposed changes should come with a transition plan for those affected and as part of a “comprehensive review” of tax policy.

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