Ottawa’s proposed tax increases on some capital gains, announced in this week’s federal budget has some family doctors worried, as they warn the changes may affect their ability to save for retirement.
“We don’t get pensions, we don’t get retirement funds, we don’t get insurance or sick days. We have to save up for our own retirement and for our own families,” said Canadian physician Dr. David Poon, who started a Facebook group ‘Professional Corporation Advocates’, which aims to rally professionals, especially doctors, against the changes.
“This is essentially a retroactive tax on our savings.”
The changes to how capital gains are taxed have been proposed as the government eyes ways to make up for some of the big spending measures announced in Tuesday’s budget.
According to the federal budget, the inclusion rate — the portion of capital gains on which tax is paid — for individuals with more than $250,000 in realized capital gains in a year will increase to two-thirds from one-half.
People realizing up to $250,000 in capital gains will continue to pay tax on 50 per cent of their capital gains. For corporations and trusts, however, there is no threshold. The inclusion rate for them will increase to two-thirds for all realized capital gains.
“The vast majority of family doctors and just doctors in general in Canada are practicing through what’s called a professional corporation,” explained Don Carson, a chartered accountant.
“And they have been using a professional corporation for various reasons, one of which is really to help assist and saving for retirement.”
Carson said that any excess dollars not needed for daily expenses for doctors and their families are invested in things like marketable securities and rental properties.
Dr. Poon added: “This is an affront to doctors. It is grossly inappropriate to lump us in with these ultra wealthy.”
The budget document stated that for 99.87 per cent of Canadians, personal income taxes on capital gains will not increase and described this example.
“A nurse in Ontario earning $70,000 would face a combined federal-provincial marginal tax rate of 29.7 per cent. In comparison, a wealthy individual in Ontario with $1 million of income would face a marginal tax rate of 26.8 per cent on their capital gains. This is not right.”
Trevor Tombe, an economist at the University of Calgary, said the federal government’s argument rested on treating capital gains and other means of income, such as dividends, equally. He said previous to these changes, there was a tax advantage to distributing value through capital gains, even if it didn’t otherwise make sense.
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“The argument here is strictly about treating dividends and capital gains similarly,” he said.
“What that means is that any kind of prior financial arrangements that people undertook to take advantage of the fact that capital gains were preferentially treated, those arrangements aren’t as attractive anymore.”
He added: “We want people to choose capital gains, dividends, interest, wages… those income streams make sense for fundamental reasons, not for gaming aspects of the tax system.”
Some groups representing family doctors have also been raising concerns over the new rules.
The Ontario Medical Association in a statement on Friday said the proposed changes “will negatively impact physicians in Ontario and ultimately affect access to patient care.”
“The OMA has already heard from many of its members who have raised serious concerns about how this additional and unnecessary tax will affect their practices,” the statement read.
Global News also reached out to the Canadian Medical Association (CMA) for its reaction to the changes but it did not have anyone available to comment.
The College of Family Physicians of Canada told Global News in an email Friday: “the CFPC does not have a position on income on investments for Family Doctors.”
The proposed changes also come at a time when Canada is facing a family doctor shortage and burnout, which Poon worries could be exacerbated by the federal government’s capital gains proposal.
“I cannot think of a better way to disincentivize physicians to work, to decrease productivity and to harm the already strained health-care system than to increase taxes on doctors,” he said.
With files from Global News’ Bryan Mullan
© 2024 Global News, a division of Corus Entertainment Inc.
PORT ALBERNI, B.C. – RCMP say the body of a second person has been found inside their vehicle after a road washed away amid pouring rain on the west coast of Vancouver Island.
Police say two vehicles went into the Sarita River when Bamfield Road washed out on Saturday as an atmospheric river hammered southern B.C.
The body of the other driver was found Sunday.
More coming.
The Canadian Press. All rights reserved.
The B.C. Greens say Sonia Furstenau will be staying on as party leader, despite losing her seat in the legislature in Saturday’s provincial election.
The party says in a statement that its two newly elected MLAs, Jeremy Valeriote and Rob Botterell, support Furstenau’s leadership as they “navigate the prospect of having the balance of power in the legislature.”
Neither the NDP led by Premier David Eby nor the B.C. Conservatives led by John Rustad secured a majority in the election, with two recounts set to take place from Oct. 26 to 28.
Eby says in a news conference that while the election outcome is uncertain, it’s “very likely” that the NDP would need the support of others to pass legislation.
He says he reached out to Furstenau on election night to congratulate her on the Greens’ showing.
But he says the Green party has told the NDP they are “not ready yet” for a conversation about a minority government deal.
The Conservatives went from taking less than two per cent of the vote in 2020 to being elected or leading in 45 ridings, two short of a majority and only one behind the NDP.
This report by The Canadian Press was first published Oct. 22, 2024.
The Canadian Press. All rights reserved.
Toronto FC captain Jonathan Osorio is making a difference, 4,175 kilometres away from home.
The 32-year-old Canadian international midfielder, whose parents hail from Colombia, has been working with the Canadian Colombian Children’s Organization, a charity whose goal is to help disadvantaged youth in the South American country.
Osorio has worked behind the scenes, with no fanfare.
Until now, with his benevolence resulting in becoming Toronto FC’s nominee for the Audi Goals Drive Progress Impact Award, which honours an MLS player “who showed outstanding dedication to charitable efforts and serving the community” during the 2024 season.”
Other nominees include Vancouver Whitecaps midfielder Sebastian Berhalter and CF Montreal goalkeeper Jonathan Sirois.
The winner will be announced in late November.
The Canadian Colombian Children’s Organization (CCCO) is run entirely by volunteers like Monica Figueredo and Claudia Soler. Founded in 1991, it received charitable status in 2005.
The charity currently has four projects on the go: two in Medellin and one each in Armenia and Barranquilla.
They include a school, a home for young girls whose parents are addicted to drugs, after-school and weekend programs for children in a disadvantaged neighbourhood, and nutrition and education help for underprivileged youth.
The organization heard about Osorio and was put in contact with him via an intermediary, which led to a lunch meeting. Osorio did his due diligence and soon got back to the charity with his decision.
“It was something that I wanted to be a part of right away,” said Osorio, whose lone regret is that he didn’t get involved sooner.
“I’m fortunate now that to help more now that I could have back then,” he added. “The timing actually worked out for everybody. For the last three years I have donated to their cause and we’ve built a couple of (football) fields in different cities over there in the schools.”
His father visited one of the sites in Armenia close to his hometown.
“He said it was amazing, the kids, how grateful they are to be able to play on any pitch, really,” said Osorio. “But to be playing on a new pitch, they’re just so grateful and so humble.
“It really makes it worth it being part of this organization.”
The collaboration has also made Osorio take stock.
“We’re very fortunate here in Canada, I think, for the most part. Kids get to go to school and have a roof over their head and things like that. In Colombia, it’s not really the same case. My father and his family grew up in tough conditions, so giving back is like giving back to my father.”
Osorio’s help has been a godsend to the charity.
“We were so surprised with how willing he was,” said Soler.
The TFC skipper has helped pay for a football field in Armenia as well as an ambitious sports complex under construction in Barranquilla.
“It’s been great for them,” Figueredo said of the pitch in Armenia. “Because when they go to school, now they have a proper place to train.”
Osorio has also sent videos encouraging the kids to stay active — as well as shipping soccer balls and signed jerseys their way.
“They know more about Jonathan than the other players in Colombia,” Figueredo said. “That’s the funny part. Even though he’s far away, they’ve connected with him.”
“They feel that they have a future, that they can do more,” she added. “Seeing that was really, really great.”
The kids also followed Osorio through the 2022 World Cup and this summer’s Copa America.
Back home, Osorio has also attended the charity’s annual golf tournament, helping raise funds.
A Toronto native, he has long donated four tickets for every TFC home game to the Hospital for Sick Children.
Vancouver’s Berhalter was nominated for his involvement in the Whitecaps’ partnership with B.C. Children’s Hospital while Montreal’s Sirois was chosen for his work with the Montreal Impact Foundation.
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This report by The Canadian Press was first published Oct. 21, 2024.
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