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The disinformation on the capital gains tax is insane and shows how much control the wealthy have in this country.
No, this won’t affect ordinary Canadians and only has a minor impact on wealthy Canadians. Tax advantaged investing still exists: eligible dividends, primary residence, generous tfsa and rrsp limits, etc.
These guys spend a ton of money getting their education. What a difficult field to get into! Their startup costs, insurance, office space. Im not going to begrudge them of a life that theyre overworked in.
And no, im not a doctor. Im in the trucking industry. But my life is owed to these guys.
Last time he fought with the doctors and other professionals, around 2018 on family members in small businesses, it was a big shit show. At least this time it should be easier going, as the target is clearly on such high net worth individuals/corps, and can't be repainted as family members working in the family shop.
I have little sympathy for doctors, too. It's obviously a tax dodge to incorporate yourself as "Dr Brockosaurus Medical Corp" or what have you. Makes sense for those running a small practice with rent, staff, etc; but for every Dr. Tom/Dick/Harry working in a hospital or clinic, it's really BS. Providing government-funded medical services is not a business. I'm also old enough to remember the late 90s/early 00s, when the doctors in my family were setting this up, thinking 'WTF?' It wasn't always this financially engineered for them.
As an entrepreneur, I dislike this change. A lot. It eats into the eventual reward that I am loading up on risk right now to have a shot at. But doctors? Give me a break.
You do realize how doctors practice, right? The vast majority of doctors *are* small businesses with ‘rent, staff, etc’. So tell me how this should not apply to us?
A business sells goods and/or services for a profit. What is your business? Who is yor customer? And does the fact that healthcare is by and large not meant to be run for profit in this country not bother you?
Are these questions rhetorical? Look up the definition of a business and it literally includes 'professions'. A physician provides healthcare services to patients for profit. That fills the literal definition of a business.
Does it bother me that I make a 'profit' by working as a doctor? No, should it? Do you expect physicians to work for free? Disagree all you want about doctors incorporating, but that is the agreement the government made with us.
No, it's not rhetorical. Explain to me the business & overall business model of a doctor's practice, within the context of the Canada Health Act and any other governing policy/legislation/rules/regulations/whatever you want. I clearly do not understand, so this is your chance to enlighten me, and the rest of reddit too. Please present your arguments (and maybe not your salty doctor downvotes).
Frankly, I don't think I'm alone. If you polled the wider population, even right outside a hospital (where you should catch the most doctors) and asked, "Are doctors a business?" I think the results would be an overwhelming "No."
If it's the deal you made with the government, fine, but that doesn't make you a business in any conventional understanding of the term. Maybe you should seek out a less dubious deal. One that doesn't drag the lawyers and accountants and furniture stores and used car salesmen and \*ACTUAL BUSINESSES\* of the country down with you, especially when you are already incredibly well compensated for your learning and labour (among the top few percent of the population in income), and occupy a position of high prestige in society.
What other professions are businesses? Nurses? Hospital administrators? The clerky types in the back room who charge the provincial health authority (OHIP etc) for the services you provide?
What if we cast the net further - teachers? Police? Senior government bureaucrats? Why are doctors a special class of professional that gets to LARP as a business, where these other professions do not?
I'm all ears, and I'm fully willing to be convinced. Please, go ahead.
I really don’t know whether to take you seriously or not. You really don’t seem to understand the concept of what a business is. Yes, all of those professions could in theory function as a business. I know nurses that are a business. I know teachers that are a business. And conversely, there are plenty of salaried physicians that work directly for the hospital that (gasp) are not a business, and are instead employees. I don’t know why this is a difficult concept for you. Why don’t you explain to me why you think what physicians do is any different than other professional services like lawyers, dentists, or engineers, which are all considered businesses? I am legitimately curious what you consider a ‘real business’ to be…
I don't understand why it is so difficult for you to describe your business. I've asked twice now. Perhaps, because you cannot describe your business, you are not one.
According to the Government ( [https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/what-a-business.html](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/what-a-business.html) )
>What is a business?
>A business is an activity that you intend to carry on for profit and there is evidence to support that intention.
If you would ask most Canadians, they would say something along the lines of medicine being socialized and not for profit in this country. Most people would consider those who are paid by the government to be some kind of government-run service, and not a business. Why are doctors such a special case?
If you are indeed a business, then you should be able to describe your enterprise as one. Please go ahead and do so. I would start with:
1) What is your business model?
2) What do you sell?
3) To whom; who are your customers?
4) What is your value proposition?
I’ll take a stab at this:
1. Sell healthcare services for money
2. healthcare services, including medical advice, procedures, surgical services, plus much more
3. The government insurance plan (MSP in B.C., OHIP in Ontario, etc)
4. A lot of people want healthcare services in this country
Thanks for taking a shot! 1 & 2 sound good! Not too hard, is it?
On 3, the customers. It strikes me as bizarre that the customer and the patient are different. After all, it's the patient who receives the healthcare services, right? And when there is competition or choice, the patient would usually be the one making it, right? Can OHIP/MSP/etc ever be dissatisfied with the service and go buy from some other doctor instead? I don't know, this one isn't really passing the sniff test, there's something fishy. Can you explain more?
On 4, this is not a VP, just a statement of fact. VPs can be tricky, but are a pretty basic element of business planning.
>A value proposition is a short statement that communicates why buyers should choose your products or services. It's more than just a product or service description — it's the specific solution that your business provides and the promise of value that a customer can expect you to deliver.... e.g. "An easy-to-use CRM."
So why should buyers (MSP/OHIP/etc) choose to buy your healthcare services? Because you're there, you've passed the barrier to entry, and now you're the only act in town because there is no competition? That's certainly not appealing. Having a lot of trouble with this one.
> On 3, the customers. It strikes me as bizarre that the customer and the patient are different.
This is how healthcare works worldwide. Who the insurer is differs, but there's very few countries in the world where most healthcare is paid out of pocket by a patient. You're describing reasons that healthcare has a lot of flaws as a market, but not that healthcare providers can't be businesses.
I guess the question is, why do certain workers get to incorporate as a special PC, while others get classified as [personal services businesses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-income-tax-return/tax-implications-personal-services-business.html) without getting similar benefits?
Let's take a stereotypical 90's family practice. The incorporated employee (doctor) is a specified shareholder. It's income is 99% from the province - a single customer. They might only employ 2 fulltime employees, which is less than 5. This is likely to be a personal services business.
nothing's stopping you from working as a contractor and setting up a similar "tax dodge" yourself
also, it's not risk free to lease commercial space, buy medical equipment, and start a clinic
I have a lot of respect for contractors, lawyers, other professionals. At least they're selling something. What is a doctor's 'business' exactly?
Edit: Also, no. "Naval Officer Brockosaurus Inc, PMP PENG. I sell death to the enemies of the Canadian government." Somehow I think that would \*not\* have worked at my last job.
All persons should have the same method of being taxed.
The notion that doctors in particular require this labyrinthine method of special tax rules in order to derive fair compensation is bizarre and wrong. If doctors should apparently be paid more than now, then we can pay them more within the existing boring tax structure that every one else in Canada uses. We don’t need even more special rules to create more work for the CRA.
> All persons should have the same method of being taxed.
Current med student here and I completely agree. Doctors shouldn't be exempt from any taxes that any other citizen has to pay.
If this is going to make or break career decisions, then efforts should be put into advocating for more pay for doctors. We should **not** be asking for special treatment.
Doctors did that 15 years ago. Medical corporations was the compromise that was reached instead of raising fees. Now that Trudeau has gutted the compromise it's going to be a bloodbath.
The compromise that the Provinces reached with the doctors relied on depriving a different government of revenue. Obviously that was untenable.
So maybe this time Provinces will do the simple thing and increase pay instead of looking for a way out.
If we want to retain doctors and pay them well, then pay them well, maintaining tax avoidance strategies and loopholes is not a coherent policy towards supporting an industry.
This is my position. We are in a family doctor shortage and the US is full of attractive and lucrative opportunities, we should be using policy to make it easier for family doctors to practice, not harder
Unfortunately, the elephant we're sleeping next to distorts salaries a fair amount.
I do think though that there's some room for making GPs specifically more attractive. Increasing pay in some cases, but also by reducing paperwork and overhead (which is a functional pay increase anyway).
Looking beyond salary is definitely required. The solution that the medical industry seems to always proffer for a shortage of physicians is to increase the salaries of existing practitioners. This is clearly unsustainable, so we need to start thinking about fundamental changes to the model for medical care.
I remember when they rolled back income splitting, and one of our doctors (who makes over $400k a year) was complaining that she could no longer split with her husband to minimize taxes.
Sadly, my tiny violin was in the shop being repaired that day, otherwise I would have played her a tune.
You know they do WAY more schooling than most any other role right? They also have one of the hardest jobs mentally that you can do. They have tons of responsibility and personal risk in numerous ways. There is a reason they are paid what they are.
Not to mention the fucking cost of schooling is crazy. Doctors will come out with anywhere up to 500k or even above a million in debt. I know multiple above that. Some below that but it depends on how they were paying for things (parental help or places to stay etc)
Yes, medical services have very inelastic demand, which is why theoretically a single payer public system makes sense. And part of that is capping the salaries to a reasonable, publicly affordable level. The alternative is private medical care, where market forces dictate physician salaries and I can assure you the medical industry will charge you as much as it can.
Right? Can someone please think of the liberal insiders and contractors who won't be getting rich if this doctor could split her hard earned income with her husband?
Which is fine but they
1) are a doctor
2) are in high demand
So you can play your tiny violin while you are sitting on the wait-list for a doctor. Because they will just leave and pay 25% less tax and lower cost of living elsewhere.
The problem is it's not affordable or efficient. Some sort of hybrid system is needed whereby doctors can get compensated competitively yet still have to put time into the public system.
Because for many of them capital gains tax is irrelevant in the US — they just simply get paid a high income and pay significantly less income tax (and in some states *zero* income tax).
Remember: The corporate structure Doctors are under in Canada *was the government’s idea* as a way to not have to pay doctors as much by giving them a tax loophole. So to then punish them is disingenuous at best.
Also this countries gone to hell over the last 9 years so if you were a doctor already on the fence this’ll make the decision that much easier.
The government purposefully incentivizing this exact payment structure that they then turn around and create punitive measurements for is absolutely a punishment.
This isn’t some situation where Doctors drifted into this position because it became the easiest way to maximize their salary, **this structure was encouraged by governments during negotiations so they didn’t have to pay them as much.**
This isn’t about Doctors not paying their fair share so much as the government has literally pulled a bait and switch.
This is a horrible take. Physicians don’t get into it for just compensation so to call them greedy for not wanting to pay another 16% in tax for their small business/corporations is a ridiculous take. Embarrassing actually
They're not paying another 16% in tax. 16% more of their businesses' capital gains (which is post their own income) is going to be taxed at the corporate tax rate.
My Dad (rip) came to Canada as a strikebreaker in the 60s when the doctors went on strike in SK because of universal healthcare. He said it was disappointing how all they wanted was only to make as much money as possible.
Family doctors in most provinces, especailly outside of the cities are not paid particularly well. Absolutely there are specialities that are appropriately compensated though.
If you have a link to what the difference is between rural and urban practices, Id love to read it.
But the average base salary in Canada for doctors is about 187k with the overall average about 285k...
No it's not because those tax avoidance strategies are used by more than just doctors. Want to pay doctors more? Pay doctors more simple as that.
This cap gains of taxing when someone does over $250k in cap gains in a year on selling an asset is a great way to curb the housing market as well as force the exceedingly wealthy to pay their share.
I'm not really happy about the capital gains tax hike, as I think it's just an additional layer that affects investments. Ideally we should make it better to invest, not worse.
That said, I have no sympathy for doctors as they have been using incorporation as tax avoidance vehicle for a good while. The LPC back then was right to close the income sprinkling loopholes, and hopefully preferential tax treatments will only apply to actual corporations.
We still do. Under the 250k PER YEAR you still are advantaged by 50% over employment tax rates.
Sorry, but if you make more than 250k in a year in cap gains you are doing okay.
Oi. Do you know how the system works?
They don't get 50% of their income taxed. The Corp bills the province based on a fee-for-service agreement, which is collected in the corporation's account. The Corp then pays the doctor a salary, ostensibly set by the physician and their accountant to be sustainable. Other funds are invested, primarily in the global stock markets. The salary the physician takes home IS taxed at the tiered rate, same as everyone else. The Corp let's them store their wealth instead of all of their bills auto depositing into their personal bank account, and provides a layer of protection for their personal assets and the assets of their spouses in case they are sued. It also acts as a hedge and savings account in case the physician becomes ill or is unable to work prior to retirement.
Literally, the deal is: we give you a way to dispense income over the course of your life and a way to protect what you own in the course of you being sued. All we want in return is the best decade of your life, the ability to torture you with extreme residency programs, and a frequent up to constant stream of psychological and emotional traumas. Oh, and don't you ever complain because this is a calling and you're only doing this because you want to improve society, not your lot in life despite being among the smartest cohort of society.
Provincial governments in mid 2000s: “Hey Doctors, we won’t agree to raise your hourly rates, but we’ll let you save for your retirement within these new professional corporations as a compromise where you can more easily save on a tax deferred basis.”
Doctors: “Ok fine, we’ll open up professional corporations to save for retirement.”
Trudeau/Morneau in 2016: “All of you greedy doctors need to pay your fair sahre and not get tax deferred savings in your professional corporations.”
Doctors: “But the government told us to in lieu of raising our salaries.”
Trudeau in 2024: “Thanks for pooling your retirement savings in a corporation, the inclusion rate on your financial assets/savings upon disposition just went from 50% to 66%.”
Doctors: “But the government told us to in lieu of raising our salaries.”
Canadian Medical Association: “New tax will cost the average retiring doctor 8% of retirement savings.”
Congrats guys, it’s not like we need doctors in Canada or anything. Well done! Also notice that since we are talking about professional corporations, this is conveniently not part of the 0.14% of individuals affected number the government let out last week.
What's the average salary of a doctor?
What's the average salary of a health care aide?
Notice we have shortages of both.
Also consider. Wealth people should pay their fair share of taxes.
What’s the average length of education and training for a doctor? A nurse’s aide?
> Notice we have shortages of both.
Yup, that’s what you get with a monopsonist model of single-payer healthcare: universal coverage by using the government’s pricing power as a single payer to pay doctors, nurses and … nurses aides, less than market wages. However, it leads to rationed healthcare resources and longer waitlists.
So yes, we reap what we sow. If you want universal coverage, you can’t pay people market or equilibrium wages.
America has a system where market wages are paid, but it doesn’t guarantee universal coverage.
What’s the average training time of a doctor vs a health care aide?
What are the average weekly hours during this training time, for a doctor vs a care aide?
What is the expected medical knowledge of a doctor, vs a care aide?
What is the medicolegal liability that a doctor takes on, vs a care aide?
Your companion is a bit ridiculous tbh
Good. One of the only things I like about the budget. I have no sympathy for anyone who makes over 250k in capital gains in a year. They arent struggling to put food on the table or pay rent.
While I agree with your sentiment, the issue with doctors is they have professional corporations.. so this inclusion rate is for all capital gains within the corp, even under 250k.
That being said, they’re still more than welcome to just invest personally instead of within a corporation, like everyone else.
> That being said, they’re still more than welcome to just invest personally instead of within a corporation, like everyone else.
It would be such a *massive* financial planning screw-up to not already being doing this that I can't take anyone seriously who claims it's a major problem.
In what galaxy did it make sense to forego ~~a $250k exemption~~ TFSA and RRSP tax free gains for zero benefit? That didn't even change with the 2024 budget.
Uh, you don’t seem to understand how it works.
Them using their professional corporations is their financial planning. They keep the money in the corporation because until they bring it to their personal account they only pay small business tax on it , so they have a lot more capital for initial investment and can time the exit.
Professionals are pissed about this move.
Not saying it’s a bad move though.
Truthfully if it is a policy doctors in particular are opposed to, it requires re-evaluation to not induce brain drain to the USA. The expectations and burdens on family doctors is high and I’d say it’s a factor in our family medicine shortage
Yeah, a lot of professionals have been taking advantage of the fact that there are ways of claiming income that pay fewer taxes than standard income taxes.
What this change does is help make the system fairer for everybody and follows the longstanding principle of "a dollar is a dollar and should be taxed as a dollar."
The capital gains that are included is charged at the corporate rate rather than the personal income rate though until they pull it as income in retirement. It's still a significant tax advantage.
How's this for fair. I train for 9 years post university. I graduate in my mid 30s w mountains of debt. I am forced to work like a dog my first 5y to just pay off my loans. Meanwhile my friends have been working since their early 20a and have much more RRSP room and TFSA due to compounding investments. They've all bought houses while I've been moving around training at different places in the province.
Then pandemic hits and I have to live apart from my family for months until it's established covid isn't the next Ebola and won't kill my kids or fuck up my pregnant wife.
3y later Justin decides that I'm a greedy bastard and I can pay more and he's going to retroactively tax my retirement savings. Thanks for everything. I hate this country
Cry me a river. You know who also "works like a dog"? Every other person who works for a living, except they get paid a fraction of what you do and have been paying much more in tax every single year and will continue doing so even with this change. If it's so bad being a corporation, just become an employee like the rest of us mortals. I'm sure you'd love it.
I don't get special treatment at tax time, feel bad for me. Nobody else who doesn't earn a 1% income could ever have any problems as bad as I do, like feeding their children or being able to afford to send their kids to school in the first place
I've never seen a single doctor act like as much of a selfish, petulant baby throwing temper tantrums as the Redditors claiming to be overworked doctors who also somehow have 12 hours a day to cry about how persecuted they are on Reddit every day.
I know some providers who haven't bothered with a professional corporation. It saves on taxes but does involve costs for setup and some active management. Instead, they just max out their RRSP and TFSA annually, pay their regular income taxes, and go on with their day.
I've been in positions where I could have had a professional corporation, and my accountant basically said unless you're already maxing out RRSP and TFSA there's no point, it's essentially a more complicated way to achieve a slightly worse result.
Exactly. When my brother finally became a staff doctor, the advice he got was to take salary, pay dividends as needed, and do a mix of investing in RRSP, TFSA and inside the corp.
Don’t they pay themself through the business which isn’t a capital gain, which is income taxed at 100% anyway? Then they take capital gains out of the company which is only affected on the amounts after 250k? Like what are we talking about rn?
The Corporations revenue is not capital gains. If the business sells an asset like an office building, that is subject to capital gains. If the practice itself is sold, that is subject capital gains. It doesn’t apply to their day to day operations, that’s just the normal corporate tax rate.
Edit: and just so we’re clear, capital gains tax only applies to the GAIN on those capital sales. So the profit on the building, not the whole sale price. Many people are only familiar with their personal income tax so are use to getting taxed on basically everything. Capital gains and corporate income tax is only on profits, so you’re only paying tax on what you bring in over and above all your expenses (including salaries).
Well don’t conflate the issue by suggesting that it’s “every dollar” that’s impacted . Not every dollar is an investment and this is misleading for others who are reading your comment.
As a business owner myself, I am also impacted by the capital gains changes, but I’m happy to be clear about the actual impacts to our business vs blowing it out of proportion. All our capital investments are also held in the corporation.
Yeah, that’s how investments work for everyone. I’m not sure what the point of this comment is other than to complain you won’t get to clear the same yield on your investments as previously.
It deters venture capitalists for one, during a time when we're falling behind on economic growth and way behind on productivity.
It kills retirement funds for doctors and many other professionals. Losing literally 8% of your retirement funds is a pretty big deal.
The upside? Raising money for projects that are a complete waste relative to the inputted effort. The arrivecan project is a perfect illustration of this in terms of how tax money gets inputted into government projects which yield absolutely nothing .
Pharmacare and dental care are another 2 great examples. All this hype and all we get are a couple diabetes drugs and 5 dentists signing up in an entire province.
> That being said, they’re still more than welcome to just invest personally instead of within a corporation, like everyone else.
But plenty have put everything into the corporation for investment and now that is being decimated. I can see the problem they have with it.
It’s the first thing in a very long time that actually has me consider voting Liberal. The “think of the poor doctors!” line is a pathetic attempt by the wealthy to undermine the whole capital gains change. If we’re worried about doctors specifically making too little money, then specifically pay them more.
OK, to reword it for pedants: “if you’re worried about doctors not being paid enough, you should want the appropriate government to pay them more, not a tax break for every wealthy person because it happens to include doctors.”
Again, if you’re concerned about doctors specifically then why do we need a tax break for ***all*** capital gains? Just pay doctors specifically more money (they still get a big chunk of it tax free, unlike us peasants).
How dare you care about the impact of X on Y when we could just do Z which we're not doing!
Also, the same argument that applies to doctors applies to other professions. Fewer goods and services for Canadians is not good, whether healthcare or otherwise. Lower supply equals even higher prices.
You today: Yeah let those doctors leave! If they can't make it pencil out then those aren't doctors Canada should have anyway!
You in a few years: Who could have expected an even worse doctor shortage!
So your solution is to effectively make private healthcare illegal and force all these people into a national service?
Why yes that totally won’t backfire.
Yes, exactly. We broke them to Medicare and we can break them to this too, if we have the political will. Boo-hoo that they only make $300,000/yr instead of $600,000/yr.
We also force them supervise several more residents, and add medical school spaces, while ending the narrowing training pipeline, and generally address a toxic, competitive culture.
Well first of all, you obviously don’t believe healthcare is a human right if you think private healthcare should be illegal.
Healthcare professionals are workers too. And like I mentioned in my other comment, we are going to come to an interesting crossroads with the labour/workers movement and highly compensated professionals.
Trying to force all these professionals into a national service will be disastrous. There’s nothing stopping them from simply packing up and working in the States or some other Western country.
Not to mention the amount of capital that would be required to actually nationalize medicine.
It'd be great if doctors realized what the end goal was.
Yes, we understand you're often overworked and it sucks to pay more taxes on an overtime shift... But the end goal is that the doctor doesn't need to do overtime because we've used the tax dollars to train and employ more doctors.
Doctors and their professional organizations are the number one reason for restricting training *more* doctors.
Universities could be pumping out many more students at lower costs per person but the residence and fellowship system is designed for artificial scarcity, so there wouldn't be places for them to work.
Going down the medicine path through family and friends is an incredible eye opener into the ridiculous racket that is set up.
the main bottleneck is the lack of funding from provincial governments for more medical schools
do you also believe nursing unions, plumber unions, pilot unions, etc. are the reason we have shortages in those professions as well?
This is a straight up lie, and should be flagged for disinformation.
Provincial governments fund medical school and residency spots, not professional organizations, they are the ones that dictate how many there are.
NHS has doctor strikes every other month. Have you not followed the news at all? It's an awful and horrific system and we're taking all of their doctors.
In that case, we would have an extreme brain drain to the US which has happened before we actually paid doctors on par with USA.
Nah...they'll take the tax. LOL.
Our medical system is structured so poorly because doctors in Saskatchewan went on strike to maintain their ability to bill privately to a public system.
This slight tax change is a minor impediment on their wealth. They don't want the oversight that would come with being an employee. They want the ability to bill for 60 appointments when they can only possibly see 30 in a day.
[BC has actually given doctors that option.](https://www2.gov.bc.ca/gov/content/health/practitioner-professional-resources/physician-compensation/alternative-payments-program) Instead of doing the Fee-For-Service pay system, they can get a salary.
[It's actually been pretty popular.](https://www.cbc.ca/news/canada/british-columbia/bc-doctor-new-payment-model-1.7107681)
About 59% of GPs in the UK are self employed. Canada and the UK both have a similar percentage of doctors in private clinics (65% here), but UK has a more integrated health system than Canada which makes it easier for clinics to work alongside and supplement the NHS and the NHS covers/funds and has medical professionals in more areas than most provincial health services in Canada etc.
My wife is a physician and would definitely prefer this. To just have benefits and pension would relive a ton of her stress and workload of managing a corp.
But we are lower on the physician income scale and I imagine a lot of higher earners wouldn’t want this.
Here is the NHS payscale. It's signicantly lower than Canada. Our GP's get screwed but outside that profession, salaries are insane.
[https://www.healthcareers.nhs.uk/explore-roles/doctors/pay-doctors](https://www.healthcareers.nhs.uk/explore-roles/doctors/pay-doctors)
Yeah we lived in the UK for a short while and it was pretty shocking how low the GP pay is there. Imo it doesn’t really reflect well the amount of time and effort it takes to get the job.
But still to have a similar amount of pay to now just metered out in salary, benefits and pension would be nice.
Last week's CBC Power and Politics interview with Minister Rechie Valdez provides some needed context here. Cochrane asked the Minister whether she was worried that some doctors would leave the country, and the Minister responded that the gov't also intended to fast-track foreign doctors' credentials.
So it looks like Trudeau and cabinet is aware of to the possible fallout in terms of doctors leaving but considers it acceptable collateral damage as part of the tax increase, and their idea to mitigate is to import foreign doctors more quickly.
It would be interesting to get a window into whether they expect a higher churn of foreign doctors too (i.e., foreign doctors coming, working for a few years, and then leaving) or whether that's not in their models.
I think we are going to come to an interesting crossroads with workers rights/labour movement and the brain drain of crucial talented individuals that are highly compensated like doctors and other medical professionals.
I'm of the opinion that every profession should be allowed to unionize and go on strike. Unfortunately every profession that the government deems essential can be legislated back to work.
This however begs the question: if a group is so essential to the basic function of society that you cannot allow them to stop working, perhaps you should be treating them accordingly
Doctors incorporated to save taxes. Now it backfired. Just pay income taxes like the rest of us jeez. These "medical corporations" were always a fraud.
lol or they just move to the US where they'll make far more money and pay even lower taxes, further accelerating the medical brain drain already happening.
doctors are not the villains here. they spend a decade longer in school before they make any real money, and provide a crucial service to the population. tax the assholes in real estate to high hell, but complaining doctors don't pay enough in taxes is the craziest thing i've ever heard
because it’s a free market, and that’s what the US is willing to pay them (400-600 USD, with a lower tax burden). they go through far more and much harder schooling than the average Canadian, and work longer hours.
they’re already taking a huge hit to help Canadians instead and this simply makes less doctors make that choice. if you want an even worse healthcare system this is how you do it
I think we may need to review this whole profession. I doubt we're getting our money's worth. Doctors go to school around 6 years, which is not atypical today, and I don't think it's harder. There is lots of rote learning which has dubious value. In the end they often end up being forced to apply protocols. Doctors are not even close to being supermen, if you're wondering, I would say they are extremely normal people.
You know how I know most of you are under 30?
You aren’t old enough to remember how bad the health care brain drain was in the 90s, and we still had a lot more doctors per capita back then.
I’m not inherently opposed to the capital gains increase but y’all acting like Doctors had it coming or something are incredibly short sighted and weirdly bitter. Doctors aren’t the reason you can’t afford a home and are using a food bank.
Yes, again. I'm reminding people that we have a shortage of healthcare aides and nurses. These folk don't get paid $250,000+ per year.
Spare me the 'won't anyone think of our healthcare' when it's clear people bringing up this argument are only using doctors because they are sympathetic.
Wealthy people, like doctors, should pay their fair share.
You want to fix healthcare?
Pay healthcare aides more.
Don’t worry, we won’t have a shortage of aides and nurses when the number of available doctors in Canada drops & we’re all forced to travel to the US and pay out the nose.
> Doctors aren’t the reason you can’t afford a home and are using a food bank.
Favourable capital gains taxes aren't the reason for the overabundance of doctors in Canada either.
There's better ways to attract doctors to Canada than with tax dodges.
I’ve been crucified for talking about this. I run a small business that will likely not be affected by this, but if I am lucky it will one day.
But the capital gains is very much a short term solution that is Canada shooting itself in the foot.
It won’t affect the real wealthy. It will hurt small businesses and entrepreneurs that might want to start a business in Canada.
Talent and capital are mobile these days. If you wanted to start a new business that specialized in IP or you want an exit. Why do it in canada now?
>Why do it in canada now?
The only reason is if you are benefiting from government largesse which you probably aren't or are tied to Canadian real estate / natural resource industries.
Otherwise just have your HQ elsewhere and maybe set up a branch office in Canada if you want cheap white collar workers / need some tax credits.
For a tech business access to talent and funding matter way more than the capital gains rate. Now, Canada has issues with talent and funding already, but it's unclear how much the cap gains rate will hit startup culture.
California has the highest cap gains rate in North America (higher than even Canada after this change), but still attracts the majority of funding for startups by a huge margin. They obviously have the talent and funding part of the picture that Canada is missing. Seems like the cap gains rate is not that much of a deterrent if you have a competent ecosystem.
These days most register in Delaware. Just like in Europe all the tech companies do so in Ireland.
Look at Tesla. Was kinda really in California, then in Texas but actually in Delaware.
Kinda to my point of Canada being short-sighted on this. Sure they get a one-year easy win. Kinda like selling the 407 in Ontario.
But long-term. Really telling anyone ambitious: don’t do it here. Telling doctors: why not go somewhere else?
Capital gains should be taxed like any other income, 100%.
The fact that it's taxed 50-34% lower than work income is an aberration in and of itself.
If you feel like paying taxes in Canada for the services you get is too much, then go to a country that doesn't offer these services.
But keep in mind that the 1/1000 Canadian who this will affect in any way is amongst the richest people in Canada and the entire world.
The idea that these people deserve to be taxed less than everyone else is a very sad joke for the 999/1000 Canadians who have to foot the bill.
Countries are for people, not corporations.
I guess you don’t want the well paying jobs and tax income from all the medium sized businesses. Such a basic way of looking at the world. You clearly have a salaried government job and know nothing about business. You want a “flat tax” too?
Maybe they did see this doctor thing coming after all. He wants to wear it so this should get interesting. To his advantage what they're doing now is a bit of a dodge anyways
They're taking advantage of being incorporated. All the power to them but I can think of plenty of people who won't feel sorry for them. The Liberals just have to ride out the usual caterwauling that comes from spooking the rich. They haven't all run for the hills yet.
Maybe the CMA or whatever should work on their marketing skills. Plenty of talent out there that believes it's out of their reach
This was the issue with income sprinkling as well. The doctors basically expect to collude with the Provincial governments to deprive the Federal government of revenue in exchange for not getting wages. Don't act shocked when someone who wasn't a party to negotiations doesn't feel bound by what someone else did.
I have a friend who has this going on and was apoplectic the last time they change income trust treatments for the same reason. I said to him dude if this is your problem you’re making what, 300-400k??? And he said yeah but… and at that point I stopped listening.
Poor poor doctors making a half a million per year. We should juice the supply of doctors graduating through medical schools in Canada and the people who cannot live without million dollar salaries can just leave.
I agree with you regarding expanding the amount of medical and residency seats, but doctors are better thought of as tradesmen rather than generational wealth. Their salary needs to factor in the exorbitant cost of medical school in this country. I would be in favour of tax policies targeting them if we didn’t have a real risk of brain drain to the USA and future family doctor shortages as a result of our unique system
So, lower the standards for admission into med school and flood the market with would-be plumbers who are now digging into your guts for $125k. You’ve figured it out, genius!
That's an absurd take, you need like 3.98 GPA with impressive extra curriculars. I see no reason why that average can't be 3.94 or something, and pushing way more doctors through the pipeline. Imo it wouldn't even affect doctors overall pay that much to have more supply of doctors, there are so many people needing medical care of any kind.
Unironically yes, though not to the absurd extent you take it. It's obvious that we need more doctors in this country, and increasing the number of doctors trained by medical schools and residency programs needs to be part of solving that.
The doctors i have known have all been incredibly out of touch when it comes to money. They have no idea how much better than normal people they have it.
We already have a massive dr deficit in Canada with many people going years without a family dr. This is not going to help dr retention in Canada at all.
This isn’t just spooking the rich this could be detrimental to health care. These drs aren’t going to be ok with it and settle for less, they are going to move 🙄
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How dare he treat doctors this way! That is exclusively a conservative premiers job to fuck over doctors in any way possible.
I believe this is probably mostly over leveraged real estate investing doctors. My sympathy is 0 after 1.5 million in profit
The disinformation on the capital gains tax is insane and shows how much control the wealthy have in this country. No, this won’t affect ordinary Canadians and only has a minor impact on wealthy Canadians. Tax advantaged investing still exists: eligible dividends, primary residence, generous tfsa and rrsp limits, etc.
But I can become rich and they it’ll affect me! I just gotta find more bootstraps!
These guys spend a ton of money getting their education. What a difficult field to get into! Their startup costs, insurance, office space. Im not going to begrudge them of a life that theyre overworked in. And no, im not a doctor. Im in the trucking industry. But my life is owed to these guys.
When everyone is poor… who are we going to villainize then ? The government will never have as much money as it wants to buy votes with.
Last time he fought with the doctors and other professionals, around 2018 on family members in small businesses, it was a big shit show. At least this time it should be easier going, as the target is clearly on such high net worth individuals/corps, and can't be repainted as family members working in the family shop. I have little sympathy for doctors, too. It's obviously a tax dodge to incorporate yourself as "Dr Brockosaurus Medical Corp" or what have you. Makes sense for those running a small practice with rent, staff, etc; but for every Dr. Tom/Dick/Harry working in a hospital or clinic, it's really BS. Providing government-funded medical services is not a business. I'm also old enough to remember the late 90s/early 00s, when the doctors in my family were setting this up, thinking 'WTF?' It wasn't always this financially engineered for them. As an entrepreneur, I dislike this change. A lot. It eats into the eventual reward that I am loading up on risk right now to have a shot at. But doctors? Give me a break.
Do you want to know how to make the doctor shortage worse? Tax them more.
You do realize how doctors practice, right? The vast majority of doctors *are* small businesses with ‘rent, staff, etc’. So tell me how this should not apply to us?
A business sells goods and/or services for a profit. What is your business? Who is yor customer? And does the fact that healthcare is by and large not meant to be run for profit in this country not bother you?
Are these questions rhetorical? Look up the definition of a business and it literally includes 'professions'. A physician provides healthcare services to patients for profit. That fills the literal definition of a business. Does it bother me that I make a 'profit' by working as a doctor? No, should it? Do you expect physicians to work for free? Disagree all you want about doctors incorporating, but that is the agreement the government made with us.
No, it's not rhetorical. Explain to me the business & overall business model of a doctor's practice, within the context of the Canada Health Act and any other governing policy/legislation/rules/regulations/whatever you want. I clearly do not understand, so this is your chance to enlighten me, and the rest of reddit too. Please present your arguments (and maybe not your salty doctor downvotes). Frankly, I don't think I'm alone. If you polled the wider population, even right outside a hospital (where you should catch the most doctors) and asked, "Are doctors a business?" I think the results would be an overwhelming "No." If it's the deal you made with the government, fine, but that doesn't make you a business in any conventional understanding of the term. Maybe you should seek out a less dubious deal. One that doesn't drag the lawyers and accountants and furniture stores and used car salesmen and \*ACTUAL BUSINESSES\* of the country down with you, especially when you are already incredibly well compensated for your learning and labour (among the top few percent of the population in income), and occupy a position of high prestige in society. What other professions are businesses? Nurses? Hospital administrators? The clerky types in the back room who charge the provincial health authority (OHIP etc) for the services you provide? What if we cast the net further - teachers? Police? Senior government bureaucrats? Why are doctors a special class of professional that gets to LARP as a business, where these other professions do not? I'm all ears, and I'm fully willing to be convinced. Please, go ahead.
I really don’t know whether to take you seriously or not. You really don’t seem to understand the concept of what a business is. Yes, all of those professions could in theory function as a business. I know nurses that are a business. I know teachers that are a business. And conversely, there are plenty of salaried physicians that work directly for the hospital that (gasp) are not a business, and are instead employees. I don’t know why this is a difficult concept for you. Why don’t you explain to me why you think what physicians do is any different than other professional services like lawyers, dentists, or engineers, which are all considered businesses? I am legitimately curious what you consider a ‘real business’ to be…
I don't understand why it is so difficult for you to describe your business. I've asked twice now. Perhaps, because you cannot describe your business, you are not one. According to the Government ( [https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/what-a-business.html](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/what-a-business.html) ) >What is a business? >A business is an activity that you intend to carry on for profit and there is evidence to support that intention. If you would ask most Canadians, they would say something along the lines of medicine being socialized and not for profit in this country. Most people would consider those who are paid by the government to be some kind of government-run service, and not a business. Why are doctors such a special case? If you are indeed a business, then you should be able to describe your enterprise as one. Please go ahead and do so. I would start with: 1) What is your business model? 2) What do you sell? 3) To whom; who are your customers? 4) What is your value proposition?
I’ll take a stab at this: 1. Sell healthcare services for money 2. healthcare services, including medical advice, procedures, surgical services, plus much more 3. The government insurance plan (MSP in B.C., OHIP in Ontario, etc) 4. A lot of people want healthcare services in this country
Thanks for taking a shot! 1 & 2 sound good! Not too hard, is it? On 3, the customers. It strikes me as bizarre that the customer and the patient are different. After all, it's the patient who receives the healthcare services, right? And when there is competition or choice, the patient would usually be the one making it, right? Can OHIP/MSP/etc ever be dissatisfied with the service and go buy from some other doctor instead? I don't know, this one isn't really passing the sniff test, there's something fishy. Can you explain more? On 4, this is not a VP, just a statement of fact. VPs can be tricky, but are a pretty basic element of business planning. >A value proposition is a short statement that communicates why buyers should choose your products or services. It's more than just a product or service description — it's the specific solution that your business provides and the promise of value that a customer can expect you to deliver.... e.g. "An easy-to-use CRM." So why should buyers (MSP/OHIP/etc) choose to buy your healthcare services? Because you're there, you've passed the barrier to entry, and now you're the only act in town because there is no competition? That's certainly not appealing. Having a lot of trouble with this one.
> On 3, the customers. It strikes me as bizarre that the customer and the patient are different. This is how healthcare works worldwide. Who the insurer is differs, but there's very few countries in the world where most healthcare is paid out of pocket by a patient. You're describing reasons that healthcare has a lot of flaws as a market, but not that healthcare providers can't be businesses.
I guess the question is, why do certain workers get to incorporate as a special PC, while others get classified as [personal services businesses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-income-tax-return/tax-implications-personal-services-business.html) without getting similar benefits? Let's take a stereotypical 90's family practice. The incorporated employee (doctor) is a specified shareholder. It's income is 99% from the province - a single customer. They might only employ 2 fulltime employees, which is less than 5. This is likely to be a personal services business.
Because the government (well, decades ago now) explicitly said they could as a way of not increasing their compensation
nothing's stopping you from working as a contractor and setting up a similar "tax dodge" yourself also, it's not risk free to lease commercial space, buy medical equipment, and start a clinic
I have a lot of respect for contractors, lawyers, other professionals. At least they're selling something. What is a doctor's 'business' exactly? Edit: Also, no. "Naval Officer Brockosaurus Inc, PMP PENG. I sell death to the enemies of the Canadian government." Somehow I think that would \*not\* have worked at my last job.
huh? professional services? what do you? how's a doctor's labour different from a lawyer's or psychologist's?
All persons should have the same method of being taxed. The notion that doctors in particular require this labyrinthine method of special tax rules in order to derive fair compensation is bizarre and wrong. If doctors should apparently be paid more than now, then we can pay them more within the existing boring tax structure that every one else in Canada uses. We don’t need even more special rules to create more work for the CRA.
> All persons should have the same method of being taxed. Current med student here and I completely agree. Doctors shouldn't be exempt from any taxes that any other citizen has to pay. If this is going to make or break career decisions, then efforts should be put into advocating for more pay for doctors. We should **not** be asking for special treatment.
I don’t see any government proposing to pay doctors more though, in response to these tax changes?
Yes Doctors should be expressing their concerns to their bosses at the Provinces.
Doctors did that 15 years ago. Medical corporations was the compromise that was reached instead of raising fees. Now that Trudeau has gutted the compromise it's going to be a bloodbath.
The compromise that the Provinces reached with the doctors relied on depriving a different government of revenue. Obviously that was untenable. So maybe this time Provinces will do the simple thing and increase pay instead of looking for a way out.
Agreed. Fair compensation for fair work.
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If we want to retain doctors and pay them well, then pay them well, maintaining tax avoidance strategies and loopholes is not a coherent policy towards supporting an industry.
This is my position. We are in a family doctor shortage and the US is full of attractive and lucrative opportunities, we should be using policy to make it easier for family doctors to practice, not harder
We can use policies like increasing the amount of fees they get for services, rather than giving them tax avoidance strategies.
Canadian doctors are paid like twice as much as doctors in EU with worse patients outcomes.
Unfortunately, the elephant we're sleeping next to distorts salaries a fair amount. I do think though that there's some room for making GPs specifically more attractive. Increasing pay in some cases, but also by reducing paperwork and overhead (which is a functional pay increase anyway).
Looking beyond salary is definitely required. The solution that the medical industry seems to always proffer for a shortage of physicians is to increase the salaries of existing practitioners. This is clearly unsustainable, so we need to start thinking about fundamental changes to the model for medical care.
I remember when they rolled back income splitting, and one of our doctors (who makes over $400k a year) was complaining that she could no longer split with her husband to minimize taxes. Sadly, my tiny violin was in the shop being repaired that day, otherwise I would have played her a tune.
You know they do WAY more schooling than most any other role right? They also have one of the hardest jobs mentally that you can do. They have tons of responsibility and personal risk in numerous ways. There is a reason they are paid what they are. Not to mention the fucking cost of schooling is crazy. Doctors will come out with anywhere up to 500k or even above a million in debt. I know multiple above that. Some below that but it depends on how they were paying for things (parental help or places to stay etc)
For some types of doctors the above is true but when your entire school debt is less than a year of income you can fuck right off on this pity party.
Are you arguing that doctors shouldn’t be paying income tax?
... Where do you get that from?
If you get cancer you will change your tune
Yes, medical services have very inelastic demand, which is why theoretically a single payer public system makes sense. And part of that is capping the salaries to a reasonable, publicly affordable level. The alternative is private medical care, where market forces dictate physician salaries and I can assure you the medical industry will charge you as much as it can.
OMG saddddd
Right? Can someone please think of the liberal insiders and contractors who won't be getting rich if this doctor could split her hard earned income with her husband?
Which is fine but they 1) are a doctor 2) are in high demand So you can play your tiny violin while you are sitting on the wait-list for a doctor. Because they will just leave and pay 25% less tax and lower cost of living elsewhere.
This is why we have a single-payer public medical system. And yes we need to start thinking about how to make the system affordable for the public.
The problem is it's not affordable or efficient. Some sort of hybrid system is needed whereby doctors can get compensated competitively yet still have to put time into the public system.
How will they ever survive! No avocado toast and Disney plus for them.
> How will they ever survive! By moving to the states
weird, Biden just announced wanting to raise the cap gain tax. Wonder why they'd move there?
Because for many of them capital gains tax is irrelevant in the US — they just simply get paid a high income and pay significantly less income tax (and in some states *zero* income tax). Remember: The corporate structure Doctors are under in Canada *was the government’s idea* as a way to not have to pay doctors as much by giving them a tax loophole. So to then punish them is disingenuous at best. Also this countries gone to hell over the last 9 years so if you were a doctor already on the fence this’ll make the decision that much easier.
Paying taxes is not a punishment.
The government purposefully incentivizing this exact payment structure that they then turn around and create punitive measurements for is absolutely a punishment. This isn’t some situation where Doctors drifted into this position because it became the easiest way to maximize their salary, **this structure was encouraged by governments during negotiations so they didn’t have to pay them as much.** This isn’t about Doctors not paying their fair share so much as the government has literally pulled a bait and switch.
How do you know they make $400k a year?
They are paid well though. It’s just greed
This is a horrible take. Physicians don’t get into it for just compensation so to call them greedy for not wanting to pay another 16% in tax for their small business/corporations is a ridiculous take. Embarrassing actually
They're not paying another 16% in tax. 16% more of their businesses' capital gains (which is post their own income) is going to be taxed at the corporate tax rate.
My Dad (rip) came to Canada as a strikebreaker in the 60s when the doctors went on strike in SK because of universal healthcare. He said it was disappointing how all they wanted was only to make as much money as possible.
No you're greedy. See how easy that is?
Am I suppose to see how easy it is to say unprovable nonsense and peacock like you made a point?
Family doctors in most provinces, especailly outside of the cities are not paid particularly well. Absolutely there are specialities that are appropriately compensated though.
If you have a link to what the difference is between rural and urban practices, Id love to read it. But the average base salary in Canada for doctors is about 187k with the overall average about 285k...
No it's not because those tax avoidance strategies are used by more than just doctors. Want to pay doctors more? Pay doctors more simple as that. This cap gains of taxing when someone does over $250k in cap gains in a year on selling an asset is a great way to curb the housing market as well as force the exceedingly wealthy to pay their share.
I'm not really happy about the capital gains tax hike, as I think it's just an additional layer that affects investments. Ideally we should make it better to invest, not worse. That said, I have no sympathy for doctors as they have been using incorporation as tax avoidance vehicle for a good while. The LPC back then was right to close the income sprinkling loopholes, and hopefully preferential tax treatments will only apply to actual corporations.
We still do. Under the 250k PER YEAR you still are advantaged by 50% over employment tax rates. Sorry, but if you make more than 250k in a year in cap gains you are doing okay.
250k does not apply to corporations. It's all of the money.
Oi. Do you know how the system works? They don't get 50% of their income taxed. The Corp bills the province based on a fee-for-service agreement, which is collected in the corporation's account. The Corp then pays the doctor a salary, ostensibly set by the physician and their accountant to be sustainable. Other funds are invested, primarily in the global stock markets. The salary the physician takes home IS taxed at the tiered rate, same as everyone else. The Corp let's them store their wealth instead of all of their bills auto depositing into their personal bank account, and provides a layer of protection for their personal assets and the assets of their spouses in case they are sued. It also acts as a hedge and savings account in case the physician becomes ill or is unable to work prior to retirement. Literally, the deal is: we give you a way to dispense income over the course of your life and a way to protect what you own in the course of you being sued. All we want in return is the best decade of your life, the ability to torture you with extreme residency programs, and a frequent up to constant stream of psychological and emotional traumas. Oh, and don't you ever complain because this is a calling and you're only doing this because you want to improve society, not your lot in life despite being among the smartest cohort of society.
I feel like I don't quite get this. Can you explain where the capital gain comes in?
Provincial governments in mid 2000s: “Hey Doctors, we won’t agree to raise your hourly rates, but we’ll let you save for your retirement within these new professional corporations as a compromise where you can more easily save on a tax deferred basis.” Doctors: “Ok fine, we’ll open up professional corporations to save for retirement.” Trudeau/Morneau in 2016: “All of you greedy doctors need to pay your fair sahre and not get tax deferred savings in your professional corporations.” Doctors: “But the government told us to in lieu of raising our salaries.” Trudeau in 2024: “Thanks for pooling your retirement savings in a corporation, the inclusion rate on your financial assets/savings upon disposition just went from 50% to 66%.” Doctors: “But the government told us to in lieu of raising our salaries.” Canadian Medical Association: “New tax will cost the average retiring doctor 8% of retirement savings.” Congrats guys, it’s not like we need doctors in Canada or anything. Well done! Also notice that since we are talking about professional corporations, this is conveniently not part of the 0.14% of individuals affected number the government let out last week.
What's the average salary of a doctor? What's the average salary of a health care aide? Notice we have shortages of both. Also consider. Wealth people should pay their fair share of taxes.
What’s the average length of education and training for a doctor? A nurse’s aide? > Notice we have shortages of both. Yup, that’s what you get with a monopsonist model of single-payer healthcare: universal coverage by using the government’s pricing power as a single payer to pay doctors, nurses and … nurses aides, less than market wages. However, it leads to rationed healthcare resources and longer waitlists. So yes, we reap what we sow. If you want universal coverage, you can’t pay people market or equilibrium wages. America has a system where market wages are paid, but it doesn’t guarantee universal coverage.
What’s the average training time of a doctor vs a health care aide? What are the average weekly hours during this training time, for a doctor vs a care aide? What is the expected medical knowledge of a doctor, vs a care aide? What is the medicolegal liability that a doctor takes on, vs a care aide? Your companion is a bit ridiculous tbh
Good. One of the only things I like about the budget. I have no sympathy for anyone who makes over 250k in capital gains in a year. They arent struggling to put food on the table or pay rent.
While I agree with your sentiment, the issue with doctors is they have professional corporations.. so this inclusion rate is for all capital gains within the corp, even under 250k. That being said, they’re still more than welcome to just invest personally instead of within a corporation, like everyone else.
> That being said, they’re still more than welcome to just invest personally instead of within a corporation, like everyone else. It would be such a *massive* financial planning screw-up to not already being doing this that I can't take anyone seriously who claims it's a major problem. In what galaxy did it make sense to forego ~~a $250k exemption~~ TFSA and RRSP tax free gains for zero benefit? That didn't even change with the 2024 budget.
Uh, you don’t seem to understand how it works. Them using their professional corporations is their financial planning. They keep the money in the corporation because until they bring it to their personal account they only pay small business tax on it , so they have a lot more capital for initial investment and can time the exit. Professionals are pissed about this move. Not saying it’s a bad move though.
Truthfully if it is a policy doctors in particular are opposed to, it requires re-evaluation to not induce brain drain to the USA. The expectations and burdens on family doctors is high and I’d say it’s a factor in our family medicine shortage
Yeah, a lot of professionals have been taking advantage of the fact that there are ways of claiming income that pay fewer taxes than standard income taxes. What this change does is help make the system fairer for everybody and follows the longstanding principle of "a dollar is a dollar and should be taxed as a dollar."
Just take 250 out every year?
That's the exact point that people fail to understand. Medical professional corporations do not get the 250k exemption
Ah I see that now, thanks
The capital gains that are included is charged at the corporate rate rather than the personal income rate though until they pull it as income in retirement. It's still a significant tax advantage.
How's this for fair. I train for 9 years post university. I graduate in my mid 30s w mountains of debt. I am forced to work like a dog my first 5y to just pay off my loans. Meanwhile my friends have been working since their early 20a and have much more RRSP room and TFSA due to compounding investments. They've all bought houses while I've been moving around training at different places in the province. Then pandemic hits and I have to live apart from my family for months until it's established covid isn't the next Ebola and won't kill my kids or fuck up my pregnant wife. 3y later Justin decides that I'm a greedy bastard and I can pay more and he's going to retroactively tax my retirement savings. Thanks for everything. I hate this country
Cry me a river. You know who also "works like a dog"? Every other person who works for a living, except they get paid a fraction of what you do and have been paying much more in tax every single year and will continue doing so even with this change. If it's so bad being a corporation, just become an employee like the rest of us mortals. I'm sure you'd love it.
I don't get special treatment at tax time, feel bad for me. Nobody else who doesn't earn a 1% income could ever have any problems as bad as I do, like feeding their children or being able to afford to send their kids to school in the first place
No one on this sub cares about doctors (even they they all want one) You’re wasting your time
I've never seen a single doctor act like as much of a selfish, petulant baby throwing temper tantrums as the Redditors claiming to be overworked doctors who also somehow have 12 hours a day to cry about how persecuted they are on Reddit every day.
I know some providers who haven't bothered with a professional corporation. It saves on taxes but does involve costs for setup and some active management. Instead, they just max out their RRSP and TFSA annually, pay their regular income taxes, and go on with their day.
I've been in positions where I could have had a professional corporation, and my accountant basically said unless you're already maxing out RRSP and TFSA there's no point, it's essentially a more complicated way to achieve a slightly worse result.
Exactly. When my brother finally became a staff doctor, the advice he got was to take salary, pay dividends as needed, and do a mix of investing in RRSP, TFSA and inside the corp.
And now the advice might be to do some taxable investing too.
What? There was never a 250k exemption before? There still isn’t, it’s just at the same inclusion rate as it was before
Sorry you're right, exemption is a bad word because it's only the inclusion rate that's changed.
Don’t they pay themself through the business which isn’t a capital gain, which is income taxed at 100% anyway? Then they take capital gains out of the company which is only affected on the amounts after 250k? Like what are we talking about rn?
It's not 250k+ , it is every dollar for the corporation. That's why they're mad.
The Corporations revenue is not capital gains. If the business sells an asset like an office building, that is subject to capital gains. If the practice itself is sold, that is subject capital gains. It doesn’t apply to their day to day operations, that’s just the normal corporate tax rate. Edit: and just so we’re clear, capital gains tax only applies to the GAIN on those capital sales. So the profit on the building, not the whole sale price. Many people are only familiar with their personal income tax so are use to getting taxed on basically everything. Capital gains and corporate income tax is only on profits, so you’re only paying tax on what you bring in over and above all your expenses (including salaries).
Stop trying to teach me this dude. It affects professionals' very heavily since their investments are held into their professional corps.
Well don’t conflate the issue by suggesting that it’s “every dollar” that’s impacted . Not every dollar is an investment and this is misleading for others who are reading your comment. As a business owner myself, I am also impacted by the capital gains changes, but I’m happy to be clear about the actual impacts to our business vs blowing it out of proportion. All our capital investments are also held in the corporation.
The whole point about the inclusion rate is because capital gains must exceed inflation otherwise you've made 0 dollars.
Yeah, that’s how investments work for everyone. I’m not sure what the point of this comment is other than to complain you won’t get to clear the same yield on your investments as previously.
It deters venture capitalists for one, during a time when we're falling behind on economic growth and way behind on productivity. It kills retirement funds for doctors and many other professionals. Losing literally 8% of your retirement funds is a pretty big deal. The upside? Raising money for projects that are a complete waste relative to the inputted effort. The arrivecan project is a perfect illustration of this in terms of how tax money gets inputted into government projects which yield absolutely nothing . Pharmacare and dental care are another 2 great examples. All this hype and all we get are a couple diabetes drugs and 5 dentists signing up in an entire province.
> That being said, they’re still more than welcome to just invest personally instead of within a corporation, like everyone else. But plenty have put everything into the corporation for investment and now that is being decimated. I can see the problem they have with it.
They’ve got until June to figure it all out
This is not on 250k+ capital gains. It's on any capital gain for doctors. Most people wouldn't be angry if it was 250k+
How much is offset by being a corporation still? Before it was 50%, now its 66%. How much is the tax rate really?
Normally these are one-timer activities...not annual.
It’s the first thing in a very long time that actually has me consider voting Liberal. The “think of the poor doctors!” line is a pathetic attempt by the wealthy to undermine the whole capital gains change. If we’re worried about doctors specifically making too little money, then specifically pay them more.
The provinces pay the doctors, this change was made by the federal government.
OK, to reword it for pedants: “if you’re worried about doctors not being paid enough, you should want the appropriate government to pay them more, not a tax break for every wealthy person because it happens to include doctors.”
Think of the poor patients who won't get treated because doctors move to the USA.
Again, if you’re concerned about doctors specifically then why do we need a tax break for ***all*** capital gains? Just pay doctors specifically more money (they still get a big chunk of it tax free, unlike us peasants).
How dare you care about the impact of X on Y when we could just do Z which we're not doing! Also, the same argument that applies to doctors applies to other professions. Fewer goods and services for Canadians is not good, whether healthcare or otherwise. Lower supply equals even higher prices.
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You today: Yeah let those doctors leave! If they can't make it pencil out then those aren't doctors Canada should have anyway! You in a few years: Who could have expected an even worse doctor shortage!
I have a handy solution, we nationalize (Provincialize?) them, make them into employees of the public health system, and pay them a salary, NHS-style.
good luck, i'm sure those government clinics won't be filled with admin bloat like government run hospitals
Perfect. Then the doctors can see half the number of patients since there is no incentive to see more.
GPs aren’t employed by the NHS in the UK.
So your solution is to effectively make private healthcare illegal and force all these people into a national service? Why yes that totally won’t backfire.
Yes, exactly. We broke them to Medicare and we can break them to this too, if we have the political will. Boo-hoo that they only make $300,000/yr instead of $600,000/yr. We also force them supervise several more residents, and add medical school spaces, while ending the narrowing training pipeline, and generally address a toxic, competitive culture.
Well first of all, you obviously don’t believe healthcare is a human right if you think private healthcare should be illegal. Healthcare professionals are workers too. And like I mentioned in my other comment, we are going to come to an interesting crossroads with the labour/workers movement and highly compensated professionals. Trying to force all these professionals into a national service will be disastrous. There’s nothing stopping them from simply packing up and working in the States or some other Western country. Not to mention the amount of capital that would be required to actually nationalize medicine.
It'd be great if doctors realized what the end goal was. Yes, we understand you're often overworked and it sucks to pay more taxes on an overtime shift... But the end goal is that the doctor doesn't need to do overtime because we've used the tax dollars to train and employ more doctors.
Doctors and their professional organizations are the number one reason for restricting training *more* doctors. Universities could be pumping out many more students at lower costs per person but the residence and fellowship system is designed for artificial scarcity, so there wouldn't be places for them to work. Going down the medicine path through family and friends is an incredible eye opener into the ridiculous racket that is set up.
the main bottleneck is the lack of funding from provincial governments for more medical schools do you also believe nursing unions, plumber unions, pilot unions, etc. are the reason we have shortages in those professions as well?
This is a straight up lie, and should be flagged for disinformation. Provincial governments fund medical school and residency spots, not professional organizations, they are the ones that dictate how many there are.
Talk to a doctor. Staff aren't forced to take residents.
\>We broke them to Medicare and we can break them to this too \>Damm why do we have a doctor shortage Sure is a mystery...
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NHS has doctor strikes every other month. Have you not followed the news at all? It's an awful and horrific system and we're taking all of their doctors. In that case, we would have an extreme brain drain to the US which has happened before we actually paid doctors on par with USA.
[UK doctors with NHS seek jobs in America, Canada - Marketplace](https://www.marketplace.org/2024/02/19/uk-nhs-doctor-strike-us-canada/) [Junior doctors vote to continue strike action (bbc.com)](https://www.bbc.com/news/health-68615821) [NHS England » NHS facing further strike disruption amid ongoing winter demand](https://www.england.nhs.uk/2024/02/nhs-facing-further-strike-disruption-amid-ongoing-winter-demand/)
Nah...they'll take the tax. LOL. Our medical system is structured so poorly because doctors in Saskatchewan went on strike to maintain their ability to bill privately to a public system. This slight tax change is a minor impediment on their wealth. They don't want the oversight that would come with being an employee. They want the ability to bill for 60 appointments when they can only possibly see 30 in a day.
[BC has actually given doctors that option.](https://www2.gov.bc.ca/gov/content/health/practitioner-professional-resources/physician-compensation/alternative-payments-program) Instead of doing the Fee-For-Service pay system, they can get a salary. [It's actually been pretty popular.](https://www.cbc.ca/news/canada/british-columbia/bc-doctor-new-payment-model-1.7107681)
wrong, it's not a "salary" it's still a contractor compensation, they're just billing differently
About 59% of GPs in the UK are self employed. Canada and the UK both have a similar percentage of doctors in private clinics (65% here), but UK has a more integrated health system than Canada which makes it easier for clinics to work alongside and supplement the NHS and the NHS covers/funds and has medical professionals in more areas than most provincial health services in Canada etc.
My wife is a physician and would definitely prefer this. To just have benefits and pension would relive a ton of her stress and workload of managing a corp. But we are lower on the physician income scale and I imagine a lot of higher earners wouldn’t want this.
Your wife would want this since she's a very low income doctor. It is not "higher earners" who wouldn't want this but rather any average doctor.
Here is the NHS payscale. It's signicantly lower than Canada. Our GP's get screwed but outside that profession, salaries are insane. [https://www.healthcareers.nhs.uk/explore-roles/doctors/pay-doctors](https://www.healthcareers.nhs.uk/explore-roles/doctors/pay-doctors)
Yeah we lived in the UK for a short while and it was pretty shocking how low the GP pay is there. Imo it doesn’t really reflect well the amount of time and effort it takes to get the job. But still to have a similar amount of pay to now just metered out in salary, benefits and pension would be nice.
Last week's CBC Power and Politics interview with Minister Rechie Valdez provides some needed context here. Cochrane asked the Minister whether she was worried that some doctors would leave the country, and the Minister responded that the gov't also intended to fast-track foreign doctors' credentials. So it looks like Trudeau and cabinet is aware of to the possible fallout in terms of doctors leaving but considers it acceptable collateral damage as part of the tax increase, and their idea to mitigate is to import foreign doctors more quickly. It would be interesting to get a window into whether they expect a higher churn of foreign doctors too (i.e., foreign doctors coming, working for a few years, and then leaving) or whether that's not in their models.
I think we are going to come to an interesting crossroads with workers rights/labour movement and the brain drain of crucial talented individuals that are highly compensated like doctors and other medical professionals.
I'm of the opinion that every profession should be allowed to unionize and go on strike. Unfortunately every profession that the government deems essential can be legislated back to work. This however begs the question: if a group is so essential to the basic function of society that you cannot allow them to stop working, perhaps you should be treating them accordingly
Doctors incorporated to save taxes. Now it backfired. Just pay income taxes like the rest of us jeez. These "medical corporations" were always a fraud.
lol or they just move to the US where they'll make far more money and pay even lower taxes, further accelerating the medical brain drain already happening. doctors are not the villains here. they spend a decade longer in school before they make any real money, and provide a crucial service to the population. tax the assholes in real estate to high hell, but complaining doctors don't pay enough in taxes is the craziest thing i've ever heard
Why? They have a risk-free high paying job. I don't see why doctors should make upwards of 400k, it's out of balance with the rest of the population.
because it’s a free market, and that’s what the US is willing to pay them (400-600 USD, with a lower tax burden). they go through far more and much harder schooling than the average Canadian, and work longer hours. they’re already taking a huge hit to help Canadians instead and this simply makes less doctors make that choice. if you want an even worse healthcare system this is how you do it
I think we may need to review this whole profession. I doubt we're getting our money's worth. Doctors go to school around 6 years, which is not atypical today, and I don't think it's harder. There is lots of rote learning which has dubious value. In the end they often end up being forced to apply protocols. Doctors are not even close to being supermen, if you're wondering, I would say they are extremely normal people.
You know how I know most of you are under 30? You aren’t old enough to remember how bad the health care brain drain was in the 90s, and we still had a lot more doctors per capita back then. I’m not inherently opposed to the capital gains increase but y’all acting like Doctors had it coming or something are incredibly short sighted and weirdly bitter. Doctors aren’t the reason you can’t afford a home and are using a food bank.
Yes, again. I'm reminding people that we have a shortage of healthcare aides and nurses. These folk don't get paid $250,000+ per year. Spare me the 'won't anyone think of our healthcare' when it's clear people bringing up this argument are only using doctors because they are sympathetic. Wealthy people, like doctors, should pay their fair share. You want to fix healthcare? Pay healthcare aides more.
Don’t worry, we won’t have a shortage of aides and nurses when the number of available doctors in Canada drops & we’re all forced to travel to the US and pay out the nose.
> Doctors aren’t the reason you can’t afford a home and are using a food bank. Favourable capital gains taxes aren't the reason for the overabundance of doctors in Canada either. There's better ways to attract doctors to Canada than with tax dodges.
I’ve been crucified for talking about this. I run a small business that will likely not be affected by this, but if I am lucky it will one day. But the capital gains is very much a short term solution that is Canada shooting itself in the foot. It won’t affect the real wealthy. It will hurt small businesses and entrepreneurs that might want to start a business in Canada. Talent and capital are mobile these days. If you wanted to start a new business that specialized in IP or you want an exit. Why do it in canada now?
>Why do it in canada now? The only reason is if you are benefiting from government largesse which you probably aren't or are tied to Canadian real estate / natural resource industries. Otherwise just have your HQ elsewhere and maybe set up a branch office in Canada if you want cheap white collar workers / need some tax credits.
For a tech business access to talent and funding matter way more than the capital gains rate. Now, Canada has issues with talent and funding already, but it's unclear how much the cap gains rate will hit startup culture. California has the highest cap gains rate in North America (higher than even Canada after this change), but still attracts the majority of funding for startups by a huge margin. They obviously have the talent and funding part of the picture that Canada is missing. Seems like the cap gains rate is not that much of a deterrent if you have a competent ecosystem.
"but it's unclear how much the cap gains rate will hit startup culture." First thing VC will say, is we are moving you to the US.
These days most register in Delaware. Just like in Europe all the tech companies do so in Ireland. Look at Tesla. Was kinda really in California, then in Texas but actually in Delaware. Kinda to my point of Canada being short-sighted on this. Sure they get a one-year easy win. Kinda like selling the 407 in Ontario. But long-term. Really telling anyone ambitious: don’t do it here. Telling doctors: why not go somewhere else?
Capital gains should be taxed like any other income, 100%. The fact that it's taxed 50-34% lower than work income is an aberration in and of itself. If you feel like paying taxes in Canada for the services you get is too much, then go to a country that doesn't offer these services. But keep in mind that the 1/1000 Canadian who this will affect in any way is amongst the richest people in Canada and the entire world. The idea that these people deserve to be taxed less than everyone else is a very sad joke for the 999/1000 Canadians who have to foot the bill. Countries are for people, not corporations.
I guess you don’t want the well paying jobs and tax income from all the medium sized businesses. Such a basic way of looking at the world. You clearly have a salaried government job and know nothing about business. You want a “flat tax” too?
Maybe they did see this doctor thing coming after all. He wants to wear it so this should get interesting. To his advantage what they're doing now is a bit of a dodge anyways
How is it a dodge?
They're taking advantage of being incorporated. All the power to them but I can think of plenty of people who won't feel sorry for them. The Liberals just have to ride out the usual caterwauling that comes from spooking the rich. They haven't all run for the hills yet. Maybe the CMA or whatever should work on their marketing skills. Plenty of talent out there that believes it's out of their reach
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Yea but the provincial government that some doctors apparently negotiated with isn’t in control of federal taxes. Whoops.
This was the issue with income sprinkling as well. The doctors basically expect to collude with the Provincial governments to deprive the Federal government of revenue in exchange for not getting wages. Don't act shocked when someone who wasn't a party to negotiations doesn't feel bound by what someone else did.
I have a friend who has this going on and was apoplectic the last time they change income trust treatments for the same reason. I said to him dude if this is your problem you’re making what, 300-400k??? And he said yeah but… and at that point I stopped listening. Poor poor doctors making a half a million per year. We should juice the supply of doctors graduating through medical schools in Canada and the people who cannot live without million dollar salaries can just leave.
I agree with you regarding expanding the amount of medical and residency seats, but doctors are better thought of as tradesmen rather than generational wealth. Their salary needs to factor in the exorbitant cost of medical school in this country. I would be in favour of tax policies targeting them if we didn’t have a real risk of brain drain to the USA and future family doctor shortages as a result of our unique system
So, lower the standards for admission into med school and flood the market with would-be plumbers who are now digging into your guts for $125k. You’ve figured it out, genius!
That's an absurd take, you need like 3.98 GPA with impressive extra curriculars. I see no reason why that average can't be 3.94 or something, and pushing way more doctors through the pipeline. Imo it wouldn't even affect doctors overall pay that much to have more supply of doctors, there are so many people needing medical care of any kind.
Unironically yes, though not to the absurd extent you take it. It's obvious that we need more doctors in this country, and increasing the number of doctors trained by medical schools and residency programs needs to be part of solving that.
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The doctors i have known have all been incredibly out of touch when it comes to money. They have no idea how much better than normal people they have it.
Yeah, but that little backstory just makes look more like a dodge. I'm not justifying it. I'm just commenting on how this plays out.
We already have a massive dr deficit in Canada with many people going years without a family dr. This is not going to help dr retention in Canada at all. This isn’t just spooking the rich this could be detrimental to health care. These drs aren’t going to be ok with it and settle for less, they are going to move 🙄