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CMA members raise concerns over tax changes

Canadian Medical Association (CMA) members are making their voice heard on a proposed change to the federal tax regime, one that could have unintended consequences for medical research, education and access to care.

CMA members are taking part in a grassroots advocacy campaign to educate Members of Parliament on the potential negative impact of proposed changes to the incorporation framework, specifically eligibility to the small business deduction.

In the 2016 federal budget released in late March, the government recognized the important contribution of health care practitioners as small businesses. This important policy recognition followed intensive advocacy efforts by the CMA and our membership. While access to the incorporation framework has been maintained, the budget also proposed several technical changes targeting commercial ventures that have established a partnership with multiple corporations each claiming a small business deduction.

It is these changes that have caused concern among incorporated physicians, particularly those in the academic health science setting and certain specialties such as oncology, radiology and anesthesiology. If these proposed changes go through, they could force these partnerships to break up, which would have serious negative impacts on medical research projects, education and training for the next generation of physicians as well as Canadians’ access to vital medical services.

As members continue to reach out to their elected representatives at the federal level, CMA CEO Tim Smith and other senior staff recently met with Finance Canada Deputy Minister Paul Rochon and other senior finance officials to discuss the CMA’s concerns on this issue.

“In meeting with Finance officials we made it clear that if these changes impact physicians incorporated in group medical structures, there will be significant negative effects for provincial and territorial health care systems,” said Mr. Smith. “This meeting confirmed our concerns. That is why the CMA is calling on the federal government to exempt physicians from the application of the proposal.

While the CMA’s meeting with officials from the Finance department validated the CMA’s concerns that group medical structures will likely be affected, the proposed measure has not yet been finalized.

Finance officials have confirmed that the proposed changes to the small business deduction will be part of the next budget implementation bill, to be released by the department for consultation over the summer prior to being tabled in the fall.

The CMA will continue to reach out and advocate on the issue through the consultation and legislative process ahead.

“Our members are telling us that they expect the CMA to advocate actively on issues such as ensuring fair tax treatment for group practices under proposed Canadian-Controlled Private Corporation changes while also looking out for the longer term vision for health care in Canada,” said Mr. Smith. “With that in mind, the CMA will continue to press for a new vision for health care in Canada and a new Health Accord that will help our system evolve to meet the needs of our growing and aging population.”

Forward any comments about this article to: cmanews@cma.ca.