New Survey Shows Public Outcry Over Proposed Capital Gains Tax’s Impact on Healthcare

A recent survey conducted by Abacus Data reveals a growing concern among Canadians regarding the federal government's proposed capital gains tax changes and its potential impact on the healthcare system. 

The survey, commissioned by the Canadian Medical Association (CMA), indicates that the majority of Canadians are apprehensive about the tax changes announced in the federal budget on April 16, particularly how they will affect access to family physicians.

The survey found that 58 percent of respondents were aware of the proposed changes. Despite this awareness, only a quarter of Canadians believe the changes are a good idea, while 35 percent are opposed, and 18 percent remain unsure.

According to the survey, there is a widespread belief that the capital gains tax changes will negatively impact the healthcare system. Many Canadians fear increased wait times for family physicians and a reduction in the number of physicians practicing in the country. This sentiment is echoed by the CMA, which has raised alarms about the negative effects these tax changes could have on the recruitment and retention of physicians.

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Dr. Kathleen Ross, President of the CMA, voiced her concerns. 

"The reality is that the federal government is putting at risk its own healthcare agenda, which is contingent on broadening access to family medicine, the foundation of our healthcare system," she said. 

"We’re hearing from physicians who feel betrayed, discouraged, and deflated by this latest development. We must not create more roadblocks that will add further stress to the health workforce or prevent prospective physicians from choosing to practise in Canada."

The CMA's concerns are not unfounded. The survey results show that after being informed about the CMA's position and the potential impacts on healthcare, 76 percent of Canadians with an opinion on the policy proposal want the government to reverse or revise the tax changes to exempt healthcare providers who run community-based clinics. 

Physicians, who often incorporate their practices for financial stability, rely on their professional corporations to save for retirement and cover essential expenses such as office space, equipment, technology, and staff. 

The proposed increase in the capital gains inclusion rate from 50 percent to 66 percent for amounts exceeding $250,000 threatens this financial stability, according to the CMA. 

"Many physicians start their careers in their 30s, carrying an average of $300,000 in student debt. A compressed career span makes it difficult to save for retirement. These tax changes could push physicians away from community-based practice, causing a significant care and infrastructure deficit," said Ross.

The government's decision has been criticized for being short-sighted, especially given the current strain on Canada's healthcare system. With the healthcare workforce already stretched thin, the proposed tax changes could exacerbate existing issues, leading to longer wait times and fewer family physicians available to Canadians.

"The risk of already over-stretched physicians leaving the profession or reducing their hours in response to heightened taxation is real," added Ross.

The Liberals project an additional $19.4 billion in "revenue" over the next five years from the increased capital gains tax. However, this financial gain comes at a potentially high cost to the healthcare system, which remains one of the top issues for Canadians, second only to the cost of living and inflation.

The government plans to implement these tax amendments on June 25.