The Canadian Medical Association (CMA) is actively urging the Canadian government to rethink its proposed modifications to taxation on capital gains, citing significant implications for doctors’ retirement investments.
The call for reconsideration was made by Kathleen Ross, the current president of the Canadian Medical Association, emphasizing that many physicians incorporate their medical practices and funnel their retirement funds through these corporations.
Ross expressed that these adjustments would elevate taxes on such investments, potentially increasing financial stress, especially for doctors who lack a pension plan.
Concerns also extend to the recruitment and retention of physicians in Canada, with Ross highlighting potential impacts on these factors.
The capital gains tax amendments are anticipated to predominantly affect wealthier Canadians and businesses, implicating the broader financial landscape.
Outlined in the federal budget unveiled last week, the proposed changes entail making two-thirds of capital gains taxable, up from the current half, affecting capital gains exceeding $250,000 for individuals and all gains realized by corporations.
Contradicting the notion that doctors are highly compensated, Ross underscored the significant debts many physicians incur during their extensive training years.
Statistics from the Canadian Institute for Health Information reveal that the average gross income for each physician in 2022 stood at $357,000—an amount further diluted by overhead expenses.
Emphasizing that physicians can still leverage tax-advantaged investment vehicles like Registered Retirement Savings Plans (RRSPs) by paying themselves salaries from their corporation, Ross iterates the need to address the narrative surrounding doctors’ financial standings.
During a recent press briefing, Finance Minister Chrystia Freeland responded to queries regarding doctors’ concerns, highlighting substantial government investments in healthcare and various initiatives, countering the pushback.
Prime Minister Justin Trudeau also weighed in during a news conference, focusing on the government’s efforts to instill confidence in the younger populace while calling for increased contributions from successful individuals in society to fund essential services.
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