#GlobalNews: « Federal tax changes could be ‘catastrophic’ for Nova Scotia doctors »
Proposed federal tax changes in Canada could have a significant impact on a number of small business owners, including physicians.
In Nova Scotia, there’s concern that the upcoming changes could result in doctors losing tens of thousands of dollars and patients from one end of the province to the other being impacted.
“What seems to the average person a federal tax issue really is going to be a pretty significant patient care issue in Nova Scotia,” said Kevin Chapman, director of strategy and partnerships with Doctors Nova Scotia.
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In July, Finance Minister Bill Morneau announced a series of measures to help close loopholes in the Canadian tax system.
According to Chapman, the province is already struggling to recruit and retain physicians and the tax changes “could be pretty catastrophic.”
Chapman says physicians can’t raise their prices to offset the new tax changes like some other small businesses may do because they are paid by the province.
The tax changes will impact about 75 per cent of their members – including doctors who work in hospitals and private clinics.
It’s expected the changes will end up costing doctors between $20,000 and $30,000 annually.
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Dr. Paul Young, a doctor in Bedford, N.S., says the tax changes mean several tax breaks associated with being incorporated will be no longer available to physicians, something that’s been in place for more than 20 years.
“It was given in lieu of a salary increase at the time so that there would be a way of keeping up with the increasing expenses of becoming a doctor and all the costs that are associated with it,” said Young.
“For instance, we don’t get parental leave or sick benefits or a pension or health benefits, we have to pay for all those out of pocket.”
Young says the changes would end up costing him about $2,000 a month.
“Primarily, the two ones that would affect us as physicians are income splitting with our low-income spouse and being able to retain our earnings within the corporation as a savings fund for retirement,” he said.
Young is concerned what the future looks like for doctors in Nova Scotia once the tax changes take place.
“Most physicians, particularity in Nova Scotia, where family physicians are the lowest paid family physicians in Canada basically, we do rely on the incorporation and those benefits for our savings as well as paying back our debt. I came out of university with $250,000 in debt that’s not deductible. I have to be able to pay for that. I use my income splitting to help pay for that,” said Young.
“I cant imagine that there are too many physicians starting of their practice who have that extra to pay, I don’t. So at the end of the day, physicians are either not going to be able to come to Nova Scotia or they’re going to leave because they’re not going to be able to practice here.”
READ MORE: Morneau leaves door open for changes to capital gains tax rates
According to Young, the only way to make up the lost income from the changes would be for doctors to work longer hours.
“The average physician, I know, I myself, I work on average about 50 hours a week. How keen am I on adding 10 hours to that with two small children? Not very,” he said.
The public has a chance to weigh in on the tax proposals until Oct. 2, as part of a 75-day public consultation process.
It’s expected the minister will introduce legislation addressing the new tax changes next Spring.
“It sounds like something the minister is intent on doing,” said Chapman, who is currently working with the Canadian Medical Association and the province to try and mitigate the impact the changes are expected to have in Nova Scotia.
With files from Alexander Quon, Global News.
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Note: « Previously Published on: 29 August 2017 | 5:32 pm, as ‘Federal tax changes could be ‘catastrophic’ for Nova Scotia doctors’ on GLOBALNEWS CANADA. Here is a source link for the Article’s Image(s) and Content ».