The Canadian medical community is sounding the alarm bells over Prime Minister Justin Trudeau’s thoughtless tax hikes that will only exacerbate the healthcare crisis that is already devastating the country. The backlash against these moves include strong criticisms from the Canadian Medical Association (CMA)1 and other notable voices who claim its budget suggests increasing capital gains tax inclusion rate for individual taxpayers earning more than $250,000 to a whopping 66% from 50%.
According to Dr. Kathleen Ross, president of the CMA, which represents doctors across the nation, this ruthless tax provision could seriously hamper attempts to recruit and maintain high-profile medics in Canada. These changes put at risk continued efforts throughout Canada to attract and retain a quality health workforce,” said Dr. Ross in unambiguous terms.” It also needs to be remembered that most physicians structure their practices as small businesses and use professional corporations for retirement savings instead of employer-sponsored plans.
By increasing the capital gains inclusion rate for corporations, however, liberals are being short-sighted because they are not helping any cause but rather making it difficult to keep doctors let alone attracting them when there is already serious strain on our healthcare system. This means that Canada’s appalling rank among rich countries on access to primary care reflects significant problems with regard to poverty and mass emigration could seal its last-place position.
Dr. Ross explained further: “The reality of higher taxes leading to doctors who are already stretched too thin leaving their jobs or reducing their hours.” Such sentiments have been echoed by well over one thousand CEOs of Canadian companies in other sectors including technology whose letter has called on Trudeau and Chrystia Freeland his finance minister not to go ahead with these proposed tax increases adding that entrepreneurs may leave for America where taxes are less burdensome or compete better.
In an open letter addressed directly to Trudeau and Freeland published Thursday morning, tech leaders were blunt in their assertion: “You can’t tax your way to prosperity. But in the 2024 federal budget, we see a government trying to hike taxes on investment. This is how you kill growth if you have ever been an entrepreneur or investor.” The letter comes from a respected business consortium that recognizes the adverse effect of Trudeau’s fiscal policy on Canada’s ability to compete economically.
Trudeau responded tone-deafly by framing the idea of fairness as he claimed it was wrong for students, electricians, and teachers to pay taxes on all of their income while others who exploit loopholes are paying 50% only. However, this argument falls flat when one considers that the vast majority of doctors already reside in the highest tax bracket. In addition, most small business physicians would be burdened with significant taxes upon the disposition of land or buildings involved with practice locations if those assets are appreciated by at least $250,000.
In our latest poll on the Scoop Canada YouTube Channel, we delved into Canadians’ perspectives on how Trudeau’s proposed tax increase might impact healthcare. The findings were eye-opening, with a resounding agreement among participants that the hike poses a threat to healthcare. Engage in the ongoing discussion, cast your vote, and share your insights to shape the future of healthcare in Canada.
However, what Trudeau thinks about “we are asking the most successful in this country to do a little bit more to make sure that everyone can see themselves in the success of this country” is not acceptable considering doctors’ worries. Franco Terrazzano who is the director of the Canadian Taxpayers Federation2 has adequately summed up the mood of the public on this saying, “More and more Canadians are speaking out against Trudeau’s tax hikes; he should listen to Canadians and cut taxes. Fairness is not at play here. If it was, then taxes would be reduced by Trudeau. In Ottawa under this government taxation only goes one way—up.”
The possible $19.4 billion profit for Liberals from hiking capital gains tax over five years is nothing compared to the expenses a failing healthcare system may cost us. Perhaps Terrazzano’s scathing attack best captures the growing anger among Canadians who feel that their government’s actions are nothing but an open money grab as opposed to a right-minded pursuit for justice. “If this was about fairness, Trudeau would be cutting taxes for all Canadians rather than hiking them up. This is about squeezing every penny that he can from Canadian taxpayers,” he added.
The CMA has called on the government to reconsider its position on these tax changes and also take into account concerns that have been put across by those in the medical profession as it warns “yet our health system and the people who work tirelessly to prop it up cannot withstand yet another setback.” The association’s plea indicates how serious things have become with Canada’s healthcare infrastructure crumbling under decades of inadequate funding and threatened mass exodus of healthcare professionals.
While Canada battles an unprecedented healthcare crisis, Trudeau administration’s wrong-headed move towards increasing taxes instead of supporting healthcare workers brings out one thing: rob Peter to pay Paul. Instead of resorting to punitive measures that scare away doctors, governments should focus on attracting and retaining top talent within medical science, which will ensure that all Canadians have access to quality care. A failure to heed the warnings from the medical community and other stakeholders could have catastrophic consequences, leaving countless Canadians without adequate healthcare and further eroding the nation’s standing among developed countries.
- McFadden, Taylor, et al. “Physicians’ access to primary care: results from the Canadian Medical Association National Physician Health Survey.” Canadian Journal of Ophthalmology 55.3 (2020): 27-28. ↩︎
- Dahlby, Bev, and Ergete Ferede. “What are the economic costs of raising revenue by the Canadian federal government?.” (2022). ↩︎
Last Updated on by Sanjana