Specialists across the country are furious over a plan by the Liberals to include them in a change to the small business tax laws, saying the anger could kick off another brain drain to the U.S.
Unveiled in the March 2016 budget, the change would affect certain professionals such as accountants, lawyers, engineers and architects who work as a group under a corporation.
The changes to small-business tax deductions were created to prevent complex partnerships that result in one individual using “private corporations to inappropriately reduce or defer tax.”
But unlike lawyers or engineers or accountants, doctors rely on public monies, charging according to a fee schedule set by each province.
“Lawyers can raise their rates or offer new services to cover the losses they may have [with this new tax rule] but doctors can’t do that. In most provinces, doctors have not even been able to offer new services,” Ray Foley, executive director of the Ontario Association of Radiologists, told Yahoo Canada News.
“We have had accounting firms come in and look at the tax laws across the country and what our members bring in and they estimate each doctor in Canada stands to lose $20,000 to $60,000 a year from this,” he said.
Foley says he and other physician groups have had audiences with finance department staff about the proposals in Bill C-29.
“We told them patient care would be at risk, that it would affect health care services, but they wouldn’t listen,” he said.
Prediction of a doctor drain to U.S.
He added, especially in Ontario, doctors haven’t had a fee raise since 2008 and have had some fees cut since 2012.
“This makes no sense,” said Foley, whose organization represents 1,000 physician radiologists.
“For the past 30 years, doctors have been encouraged to work in groups, because it makes for better integration of services and also, better healthcare delivery.”
The Canadian Medical Association is just as alarmed as Foley, saying the finance minister doesn’t understand the true consequences of including doctors in the tax change.
“Group medical structures are prevalent within academic health science centres and amongst certain specialties, notably oncology, anaesthesiology, radiology, and cardiology,” said the CMA in a statement to Yahoo Canada News.
It said about 10,000 to 15,000 physicians are incorporated into these structures.
“There will be a negative impact to medical research, physician training and the delivery of specialty care,” the statement from the CMA reads.
Foley predicts the change, if implemented, could kick off a doctor drain over time.
“It won’t be a sudden thing but if you are a beginning doctor or specialist, it’s just easier to go to the U.S. like so many of them did in the 1980s and 1990s. We lost about 10 per cent of our doctors, educated here in Canada, during that time,” he said.
Foley predicts that more than 10 per cent of Canadian doctors will probably leave the country.
“Our fees in Ontario in radiology have been reduced by 15 per cent already in the last three years. Radiologists have the most overhead of any doctors because we have large equipment like CAT scans and staff to operate them,” he said.
“Why would I stay when my services aren’t valued?”
Next week, Foley and other physician organizations, including the CMA, have been invited back for a second time with the Senate finance committee to present their arguments.
Foley said the prevailing sentiment among doctors is that they are being picked on.
“They feel like they are being beaten up for the purpose of cheap politics.”