New Brunswick doctors continue to have significant concerns regarding the proposed federal tax measures affecting private corporations.
Of the more than 500 New Brunswick doctors who answered a recent New Brunswick Medical Society members survey, sixty-five per cent said they would consider reducing the number of hours they currently work if the proposed tax measures are implemented; forty-six per cent said they would consider moving their practice outside of New Brunswick; and, twenty-five per cent said they would consider retiring from the profession.
“The feedback from our members confirms that the proposed tax measures could seriously impact health care delivery in New Brunswick, and could ultimately harm patient care,” said Dr. Lynn Murphy-Kaulbeck, the president of the New Brunswick Medical Society.
“Most doctors in New Brunswick and in the rest of Canada rely on legitimate tax measures to operate viable medical practices,” Dr. Lynn Murphy-Kaulbeck added. “They use tax planning to save for retirement and support their families. This provides security and financial stability to physicians, critical to attracting and keeping doctors in New Brunswick.”
Seventy per cent of doctors in New Brunswick are small business owners, not salaried employees. They employ staff, purchase equipment and supplies, rent or purchase offices, and pay insurance and taxes out of the fees they receive for each patient visit. Unlike salaried employees, fee-for-service doctors do not have health benefits, paid vacation, sick leave, or a pension plan.
“New Brunswick physicians have chosen to practice here despite the financial disadvantages. They already pay some of the highest taxes in North America,” said Dr. Lynn Murphy-Kaulbeck. “The proposed changes to tax rules governing private corporations could seriously impact the province’s ability to recruit and retain the doctors that are desperately needed throughout the health care system.”
On July 18, the Federal Finance Department announced a 75-day consultation process on tax measures that will affect private corporations. These changes could have a significant impact on New Brunswick doctors as it is estimated that as many as 70% of New Brunswick fee-for-service physicians operate under a private corporation model.
Three tax measures are under review by the Federal Government.
· “Income sprinkling”, using a private corporation to spread income among family members to create tax savings.
· Holding a passive investment portfolio inside a private corporation.
· The practice of converting a private corporation’s regular income into capital gains.
Media contact: Cara Smith, New Brunswick Medical Society, (506) 458-8860