The Canadian Medical Association (CMA) is urging the federal government to reassess its proposed adjustments to capital gains taxation, which they argue could negatively impact doctors’ retirement savings. According to CMA President Kathleen Ross, many doctors structure their practices as corporations and manage their retirement investments through these entities. The proposed tax changes, which involve increasing the capital gains tax rate, are seen by the CMA as potentially imposing additional financial burdens on doctors, particularly those without pensions.
Ross also highlighted concerns that these tax changes could hinder the recruitment and retention of medical professionals across the country. The medical community is among several groups voicing opposition to the tax reform, which primarily targets higher income Canadians and business entities. Under the new federal budget guidelines, two-thirds of capital gains, as opposed to the current half, would be taxable. This change affects individuals on capital gains over $250,000 and all corporate realizations.
In her critique, Ross expressed skepticism about the government’s portrayal of the tax adjustment as a measure of fairness across generations, noting that it disproportionately affects specific demographics. The Liberal government defends the reform as a step toward equalizing the tax obligations between capital gains and wage earners, aiming also to increase contributions from the wealthy towards public services like housing and healthcare.
Despite the available tax-advantaged investment options like the Registered Retirement Savings Plan, Ross points out that doctors face limitations with the $250,000 exemption because their investments are typically held within their corporations. In response, a spokesperson for Finance Minister Chrystia Freeland emphasized the rationale behind the tax change, asserting the need for fairness in taxation across different income sources and highlighting additional government investments in healthcare and student loan forgiveness for healthcare workers in rural and remote areas.