Doctors have been given benefits under incorporation in lieu of receiving wage hikes and that’s not right. Doctors are on both sides of the issue. The Canadian Medical Association has come out against any changes to these benefits while 450 doctors signed an open letter to Finance Minister Morneau in favour of tax reform.
The existing tax system allows for the questionable practice of “income sprinkling” where family members are paid even when they don’t contribute to the doctor’s business. In Ontario, children and spouses are allowed to be paid as members of doctor’s corporate boards.
Doctor practices are unlike other small business. They operate private businesses while being paid through the public healthcare system.
Some doctors are uncomfortable the existing breaks. Dr. Hasan Sheikh says:
“There is nothing unique about a physician’s work that makes income sprinkling okay for them and not for others (Globe and Mail Sept. 22, 2017.)”
As usual, proposed tax changes are political fodder. Some premiers have condemned them, even though the details have yet to be released. Manitoba Premier Brian Pallister calls them “class warfare.” Nova Scotia Premier Stephan McNeil worries about the ability to attract doctors and small business to the province. B.C. Finance Minister Carole James concerns are more nuanced:
“I certainly believe in closing tax loopholes, I believe that’s important, but I also don’t believe there was good consultation done.”
That’s Morneau’s failing. He announced the changes in the downtime of summer and faces a storm brewing in the fall. Only now is he consulting provinces.
One of the doctors in favour of tax reforms is Dr. Ritika Goel. The existing system doesn’t even benefit all doctors fairly:
“So, for example, if you have a single mother who is a physician she would be paying higher tax rate than a mother with a spouse that she’s able to income sprinkle and we don’t believe that’s fair (CBC’s The Current, Sept. 19, 2017).”
Another doctor is opposed to the changes. While acknowledging the issue of tax-fairness, she is bitter about existing compensation. Dr. Brenna Velker told The Current:
“I think that as physicians, you know, we all understand that those who make more money need to pay more tax, that’s how society works. The problem that I think a lot of us are running into is that we’re feeling really beat down. So, any of the forms that I fill out and of the phone calls that I make, or you know, e-mails, or anything like that, any other communication with my patients is unpaid. You know, it really leaves a bad taste in your mouth.”
Doctors deserve fair wages. They are dedicated and hard working. They incur more student debt and they start earning money later in their career.
“Let’s stop talking about propping up a broken tax system that benefits some Canadians and not others based on the title of their profession and not the nature of it,” adds Dr. Sheikh.
Instead of granting doctors dubious tax breaks, they should be given appropriate pay and benefits that dignify their profession.