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Proposed tax changes - what will that mean for us


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Re: https://www.thestar.com/opinion/commentary/2017/08/02/tax-changes-will-encourage-doctors-to-leave.html

 

Assuming the bill passes, what will it mean for us? Admittedly, I'm not very money savvy (my fault) and don't really understand tax laws, but I see most of the discussion revolving around the direct effect on income. What about the indirect effect on the job market? If there is a mass exodus of doctors (albeit unlikely because I don't see the US faring much better), I can see more jobs opening up country wide for many or most specialties. On the other hand, if the older generation of doctors hang on to their positions even more tightly than ever before because of the hit to their retirement savings, the job market (country wide, across all specialties) may get much tougher for us. And what about the practice model? Will more doctors shift into salaried positions and away from being essentially small business owners? 

Thoughts?

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I'm unhappy with the proposed changes, as I expect the majority of incorporated small business owners to be as well. These changes will cause small business owners to pay more tax.  Whether this

Lack of alternatives does create some downward pressure on FM income, but FPs in Canada didn't become some of the highest paid in the world without a reason. FPs still make less than specialists and t

This isn't a loophole! The government knew exactly what they were doing when they encouraged physician incorporation. The system is working exactly how the government set it up.  The liberal

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To start, I think it's worth detailing what these proposed changes actually mean. Without details it's hard to say for sure, but two major effects look to be likely.

First, the federal government will likely put an end to income-splitting through professional corporations. Many physicians did this by making their spouse or adult children shareholders in their business, then issuing dividends to those shareholders, and then essentially asking for the money back as a gift. This allowed physicians to pay lower taxes on their income in a way permitted, but not really intended, by the law. In short, it's a loophole, one which some (but not all) physicians used to significantly reduce the amount of taxes they paid. (There's also the issue of physicians paying themselves with dividends, which may be ending as well, and could also be considered a bit of a loophole)

Second, the federal government is potentially cracking down on using professional corporations to defer income by leaving that income in the corporation itself. Money earned by a corporation that is not used for expenses or salaries gets taxed, but at a much lower rate than income taxes. So, physicians would often take out of their corporations what money they needed for their immediate personal costs, but leave the rest in the corporation where it would get taxed at a lower rate. They would then invest that money and then collect it back out slowly when they retired. They would still pay income taxes on that money coming out of their corporation after retirement, but since their income would be much lower, the overall tax rate is also lower. It's a small gain - they essentially paid tax twice, once as corporate earnings, once as income tax later on, but the overall tax rate should be lower over time. This is not quite as much of a loophole because money is supposed to be able to be left in corporations and used for expenses related to that corporation. If I wanted to, say, save up to buy an expensive piece of equipment for my clinic (let's say I wanted an ultrasound machine), I should be able to save up money in my corporation, taxed at the corporate rate, to do so. That's what all corporations do (and what Dr. Whatley was getting at in the Star article). Yet, most physicians don't really use their corporations in that way - they save money in the corporations for themselves, not for the corporation's sake - hence the scrutiny.

The effect of this on physicians will be no change to pre-tax income, and a variable effect on post-tax income depending on how much a physician took advantage of these corporate tax laws. Some will see zero change. Others will see a large change, especially if they have a lot of adult children receiving dividends.

This shouldn't affect practice models at all. Salaried physicians can be incorporated, and many are. Fee-for-service physicians can be unincorporated. What this does change is the value of incorporating and we may see fewer physicians being incorporated as a result of these changes.

I don't expect this to change the job market dramatically. It's a country-wide change, so making a relatively easy jump to another province provides no comparative advantages. Moving to another country is an option, but the earnings would have to be higher in that other country and Canada pays physicians pretty well comparatively. Could be some movement to the US, but I expect we'll see more grand declarations than actual movement. I don't expect this to hit near-retirees much either, as I don't believe the changes affect money previously saved in a corporation. That is, near-retirees have already gotten away with the actions these changes are trying to prevent. If they're counting on a large degree of income splitting to retire soon, that could delay them though. Either way, I'm expecting the net effect to be fairly minimal.

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An interesting perspective from Andre Picard;

"For years, governments have urged physicians to incorporate, and even provided tips on how to maximize their tax savings with measures such as income sprinkling. They’ve touted this approach as an alternative to fee hikes. (And doctors can’t hike their fees to cover new tax hits.) It is unfair to now claw back these benefits. It is also disingenuous – scurrilous even – to paint physicians as wealthy tax cheats exploiting “loopholes."

Link: https://www.theglobeandmail.com/opinion/ottawas-new-tax-measures-unfairly-target-many-doctors/article35843365/

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31 minutes ago, DALMED2021 said:

An interesting perspective from Andre Picard;

"For years, governments have urged physicians to incorporate, and even provided tips on how to maximize their tax savings with measures such as income sprinkling. They’ve touted this approach as an alternative to fee hikes. (And doctors can’t hike their fees to cover new tax hits.) It is unfair to now claw back these benefits. It is also disingenuous – scurrilous even – to paint physicians as wealthy tax cheats exploiting “loopholes."

Link: https://www.theglobeandmail.com/opinion/ottawas-new-tax-measures-unfairly-target-many-doctors/article35843365/

Fees being hiked = Provincial government loses money
Physicians advised on how to avoid taxes = Federal government loses money

Advising physicians on how to avoid taxes was largely a way for provincial governments to cheap out on paying physicians properly by making the feds take a hit. In my opinion, these tax loopholes should be closed but in return the fee schedules (especially in Ontario) need to be revamped to reflect the changes that have happened in various specialties and the overall market over time (some specialties need to be paid much more to properly cover their overheads and be paid fairly while others can be tuned down). In my opinion, the federal government closing these tax benefits but not also expediting/forcing some action on the provincial level to compensate is unfair.

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Its funny when FM docs say "Omg I'm not going to be able to make ends meet, going to shut my practice down and move to the US".

Its like go ahead, its not as if FM pay is lower in the US or anything..lol. And have fun learning a whole other beast of a system working under an HMO and all the various insurances and policies. Even with the exchange, FM pays better in a big city in Canada than the US. 

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Given that FM docs are better paid than US counterparts, won't that continue to create a long term pressure to lower income?  Even holding fees constant is essentially lowering them because of inflation.  Physicians of all kinds will always be considered partial scapegoats if the health-care system isn't working absolutely optimally, and so having relatively high income will mean they'll be a target.  So wondering what the outcome in ten years would be like - especially if the US isn't considered a more financially rewarding place to practice for FM for example.  

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9 minutes ago, calcan said:

Given that FM docs are better paid than US counterparts, won't that continue to create a long term pressure to lower income?  Even holding fees constant is essentially lowering them because of inflation.  Physicians of all kinds will always be considered partial scapegoats if the health-care system isn't working absolutely optimally, and so having relatively high income will mean they'll always be considered a target.  So wondering what the outcome in ten years would be like - especially if the US isn't considered a more financially rewarding place to practice from FM for example.  

Unfortunately, that is the truth. The government targets physicians at every turn and tries to push into the media that they are overpaid for their work. 

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I think this may be a product of me becoming more disillusioned sometimes, but I am increasing held to the realization that we will never enjoy the benefits our predecessors had.  A lot of the attitudes are "if you work hard, keep your head down, and wade through the BS you'll become staff like Dr. _____________, and staff life is much better". 

I feel like the long walk through the desert to the promised oasis and I'm worried one day, nothing much will be there left.  Fees will be cut, taxes will be higher, jobs will be scarce, and governments will continually scapegoat us while we shoulder all the risk of getting through a professional degree and residency.  Medicine is not, and ever will be, what was advertised to us.  

I am not sure sometimes what to make of all this.  I love what I do but I am starting to tell myself that there might come a day where I won't care to work more because the tax rate will make my margins pennies, and I would prefer to do consulting or other financial ventures.  Maybe this will force me to spend more time with my wife and family.  Sure, you can still call me the 1%, people will still scream "you make too much" but you know what? Wait times will be long, my hours will be short, and I think I will be relatively happy. 

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15 minutes ago, calcan said:

Given that FM docs are better paid than US counterparts, won't that continue to create a long term pressure to lower income?  Even holding fees constant is essentially lowering them because of inflation.  Physicians of all kinds will always be considered partial scapegoats if the health-care system isn't working absolutely optimally, and so having relatively high income will mean they'll be a target.  So wondering what the outcome in ten years would be like - especially if the US isn't considered a more financially rewarding place to practice for FM for example.  

Lack of alternatives does create some downward pressure on FM income, but FPs in Canada didn't become some of the highest paid in the world without a reason. FPs still make less than specialists and tend to be valued by Canadian patients. Many actors within the healthcare system, including governmental actors, would like to continue to push medical students towards FM in order to ensure high-quality (and generally cheaper) primary care. In short, there are some countervailing incentives to keep FP income reasonable, despite the relative lack of options.

Some context is important here as well. What we're seeing right now is a pause in what was previously a quite substantial and steady increase in physician income in Canada, with FPs being no exception. Even with the recent cuts and holds in income, over the long run physician income is still decent and has coincided with small reductions in average work hours. I think there's cause for concern if this trend continues, but little reason for panic just yet. For FM at least, over the next ten years I'd hope income keeps rough pace with inflation, and with the new negotiating framework in Ontario, that's looking a lot more plausible.

With regards to being scapegoats in both budgetary and health-care matters, I don't think we're helpless - or blameless. Physician groups overall have done a poor job advocating as to why we deserve what is very much an above-average income, much less to get raises on that figure. The OMA has been exhibit A in that regard over the past few years. We've also been painfully slow to admit fault within our profession. There are more than a few physicians who are legitimately overpaid for the work they do, and that should be corrected. Physicians have also long-argued either to gain or retain privileged positions of power within the healthcare system. There are many good reasons for this, but it does mean we share in the responsibility when the healthcare system struggles and rightfully deserve some of the criticism when the healthcare system fails patients. We don't have to be scapegoats when the healthcare system stumbles, but we're not doing much to keep ourselves out of that position.

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The common refrain i hear is "I'm too busy doing medicine and actually making a difference to get involved in medical politics"  and this leads to those going into medical politics and leadership positions being fairly lackluster. If those who are involved at the medical school level are any predictor of future leadership, half of them are decent and reliable sure, the other half are to be quite honest...people i wouldn't want making any decisions, not even simple things like what to put on my sandwich, on my behalf with regards to the medical field. People who seemingly just end up sucking up to the higher ups to look good for their CaRMS app.

We can only blame ourselves though - its no different then politics at large, why go into it, when your'e too busy doing something you think at least is making a difference. 

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Slightly off-topic, but it's not just docs who will be hit by this.  They're going after every small business owner with these changes.   A number of my friends and family run small businesses, and none of them is really impressed by this.

Between this and Ontario's changes to minimum wage, I don't know why anybody would start a small business of any kind right now.

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30 minutes ago, ploughboy said:

Slightly off-topic, but it's not just docs who will be hit by this.  They're going after every small business owner with these changes.   A number of my friends and family run small businesses, and none of them is really impressed by this.

Between this and Ontario's changes to minimum wage, I don't know why anybody would start a small business of any kind right now.

Yeah that is right- but at least for my families small business, they can just raise the price for product/service and pass it on to consumer. Doctors can't. Most of my relatives are small business owners(in the trades mostly) and they dont like the changes but at least mostly have recourse. Especially when youre in an essential service type of trade, you can get away with some increases in your fees.  Now of course this is not universally true for all small businesses.. But better recourse than doctors at least for some small businesses. Not all, but some.

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2 hours ago, JohnGrisham said:

Yeah that is right- but at least for my families small business, they can just raise the price for product/service and pass it on to consumer. Doctors can't. Most of my relatives are small business owners(in the trades mostly) and they dont like the changes but at least mostly have recourse. Especially when youre in an essential service type of trade, you can get away with some increases in your fees.  Now of course this is not universally true for all small businesses.. But better recourse than doctors at least for some small businesses. Not all, but some.

Agreed - will also hit a lot of lawyers, many whom are incorporated.  Hopefully there will be enough resistance across many fronts for this not to go through, but I'm not certain.  

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25 minutes ago, distressedpremed said:

Agreed - will also hit a lot of lawyers, many whom are incorporated.  Hopefully there will be enough resistance across many fronts for this not to go through, but I'm not certain.  

Similarly lawyers can just increase their billable rates across the board, if its really a huge issue etc.

 

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I'm sure you guys will survive. The average income in Canada is around 45k/y (and we're one of the richest country in the world... So by world standards, even the guy making 45k is probably in the top 15% worldwide).

I know lawyers working more than 70 hours a week and they don't make more than 130-150k a year. Some people have PhD and don't even make 75k a year...

It would be interesting to see how much the average physician makes in Europe. If I remember correctly, it's not rare to see surgeons making less than 180k in Germany... And I'm pretty sure that the average GP in France is somewhere around 90-100k.

My point: Don't know why we feel so intitled to make a lot of money because we're Doctors...

 

 

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3 hours ago, Clapton said:

I'm sure you guys will survive. The average income in Canada is around 45k/y (and we're one of the richest country in the world... So by world standards, even the guy making 45k is probably in the top 15% worldwide).

I know lawyers working more than 70 hours a week and they don't make more than 130-150k a year. Some people have PhD and don't even make 75k a year...

It would be interesting to see how much the average physician makes in Europe. If I remember correctly, it's not rare to see surgeons making less than 180k in Germany... And I'm pretty sure that the average GP in France is somewhere around 90-100k.

My point: Don't know why we feel so intitled to make a lot of money because we're Doctors...

 

 

Europe also doesn't have the same amount of debt and time to even get INTO medical school. When i tell my european friends many in my class had even masters and that is mandatory to have an UG degree, they think thats crazy. Not apples to apples.


There is a reason North America pays more, because students have to put up with more here in some ways at least.   Residencies in Europe are also generally longer, and more bearable hours.  

With the German system, its not uncommon for german doctors to go private and bill far more. Not to mention 150k+ Euro goes much farther in places like Germany where the housing market is fairly standardized and much more in line with wages. For example even if youre only making the average wage in Germany, that is similar to Canada, you can live pretty comfortably and happily. Not necessarily the case here in Canada, 45k pretax is not much in most markets. Also, work culture in general in many parts of Europe is far different, they dont work themselves to death, get far more vacation days(especially in Germany). Not forget to mention the brain drain Germany is having because of the compensation issues, many of their young doctors are moving elsewhere. 
 
Of course, no one is going to starve and still paid more than the average family - but there is a lot of sacrifice, time, energy, lost income etc. Not to mention the speed bumps and battles involved in medicine.  If we simply just say "oh well, we still get paid more than most people" that just gives the government more fuel to continue to undercut physicians. Its not just about the money, its about the respect factor and the lack of it from the govt towards physicians.(not to be misconstrued as prestige or something narcissistic like that).
 

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On August 4, 2017 at 7:41 AM, ralk said:

I don't expect this to hit near-retirees much either, as I don't believe the changes affect money previously saved in a corporation. That is, near-retirees have already gotten away with the actions these changes are trying to prevent. If they're counting on a large degree of income splitting to retire soon, that could delay them though. Either way, I'm expecting the net effect to be fairly minimal.

Wouldn't these tax changes have potential long lasting effects on the labour market though? For those who are not near retirement, i.e. possibly the majority of the workforce, the proposed changes can throw a curveball to their retirement savings plan. Their decision to delay retirement in turn can exacerbate the current situation of an oversupply of junior consultants/fellows/trainees with not enough positions. While it may not affect the current near-retirees, I think the landscape can shift by the time we (or I, as a soon to be M2) finish training. 

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8 hours ago, sangria said:

Wouldn't these tax changes have potential long lasting effects on the labour market though? For those who are not near retirement, i.e. possibly the majority of the workforce, the proposed changes can throw a curveball to their retirement savings plan. Their decision to delay retirement in turn can exacerbate the current situation of an oversupply of junior consultants/fellows/trainees with not enough positions. While it may not affect the current near-retirees, I think the landscape can shift by the time we (or I, as a soon to be M2) finish training. 

Possibly, but I think there's reason to be skeptical there. Physicians earn enough that even a significant hit to income can be managed without affecting retirement timing, even if it affects overall lifestyle in the margins. I expect physicians who are on top of their finances to deal with any of these prolosed tax changes without too much difficulty, because they shouldn't be large enough to derail plans entirely. Physicians who are not on top of their finances... well, I'm skeptical they'll retire when they plan to anyway.

It's important to note that the proposals aren't law yet either. Income splitting and use of dividends I would expect to be cracked down on - it's hard to argue that physicians or anyone else deserves tax breaks, but only if they're married or have children. Using a professional corporation as a retirement vehicle is a bit more defensible, however, and it wouldn't surprise me to see that part of the proposed law moderated.

In any case, I'd expect other factors impacting the job market would overwhelm this change. From a pure monetary perspective, contract negotiations, interest rates, and costs of living will affect physician finances more than this. And for the job market overall, rate of new physician entrants to the market, plus public financing for physician supports (eg OR time), trends in physician working hours, and changes in productivity appear to me to be the more important factors on thr job market. In the aftermath of the 2008 recession, finances delaying physician retirement were blamed for the poor job market arising, yet after nearly 10 years and a complete recovery in the investment market, the job market is still poor for physicians, making it hard to lay the blame on retiree-holdouts. To the extent changes in retirement patterns mattered, it got overwhelmed by broader labour market trends, and I'd expect no different moving forward.

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On 2017-08-05 at 10:54 PM, JohnGrisham said:

Europe also doesn't have the same amount of debt and time to even get INTO medical school. When i tell my european friends many in my class had even masters and that is mandatory to have an UG degree, they think thats crazy. Not apples to apples.


There is a reason North America pays more, because students have to put up with more here in some ways at least.   Residencies in Europe are also generally longer, and more bearable hours.  

With the German system, its not uncommon for german doctors to go private and bill far more. Not to mention 150k+ Euro goes much farther in places like Germany where the housing market is fairly standardized and much more in line with wages. For example even if youre only making the average wage in Germany, that is similar to Canada, you can live pretty comfortably and happily. Not necessarily the case here in Canada, 45k pretax is not much in most markets. Also, work culture in general in many parts of Europe is far different, they dont work themselves to death, get far more vacation days(especially in Germany). Not forget to mention the brain drain Germany is having because of the compensation issues, many of their young doctors are moving elsewhere. 
 
Of course, no one is going to starve and still paid more than the average family - but there is a lot of sacrifice, time, energy, lost income etc. Not to mention the speed bumps and battles involved in medicine.  If we simply just say "oh well, we still get paid more than most people" that just gives the government more fuel to continue to undercut physicians. Its not just about the money, its about the respect factor and the lack of it from the govt towards physicians.(not to be misconstrued as prestige or something narcissistic like that).
 

That was not my experience living in Germany.  Everything in Munich was more expensive than in Ottawa, from housing (people save up over generations to be able to buy a house, and rent was more than twice what we were paying in Ottawa), to gas, to food (with few exceptions), to clothes, to utilities.  The only things that were cheaper in Germany were our cell phone plans and our home internet!  In fact, any time we returned to Canada, we would stock up on clothes and shoes, because they were so much cheaper in Canada, compared to Munich.

House and property sizes were much smaller in Munich as well.  As I said, most people rented, as buying a house was something that was out of most individuals' reach, and basically a multi-generational proposition.

We still lived comfortably in Munich, but we would certainly never have been able to purchase a home there, which we have done several times in Canada, in different markets.

As for physicians, most of the ones I knew worked in both the private and public system.  That is, they took patients with private insurance as well as patients with public insurance.  As a patient, I preferred the Germany system:  I never had to wait to see a specialist, never had to wait more than a day for diagnostic procedures (i.e. Ultrasounds, CT scans, or MRIs), and was always able to get a same-day appointment, if needed, with my family physician.  He also spoke fluent English.  Contrast that to Canada, where I've had to wait over 6 months to see a specialist at times, and months for a CT scan or MRI.

Granted, Germans pay a LOT more in taxes than Canadians do.  I don't think most Canadians would be willing to pay as much tax as the Germans do.

 

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I should have added an * that outside of the super cities, in the smaller towns immediately adjacent haha. Of course directly in a centre like Frankfurt is expensive but 45 mins by train in any direction is a different story :P but even then renting is still generally more common but its in a far more reasonable manner due to its commonplace. Their train transit system is far superior hence the more expensive gas for vehicles. 

Similarly certain goods I found were far cheaper- like real leather quality dress shoes. Half of what i would pay in Canada/US for a similar product. But of course other goods were more expensive due to mix of taxation amongst other reasons.

As for taxes, yes Germany is objectively more but their tax system also has far more grants and subsidies/credits built into it too..so depending on an individual circumstance it can vary greatly(the frustrating part of the system, having gone through the taxation process!).

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4 hours ago, JohnGrisham said:

I should have added an * that outside of the super cities, in the smaller towns immediately adjacent haha. Of course directly in a centre like Frankfurt is expensive but 45 mins by train in any direction is a different story :P but even then renting is still generally more common but its in a far more reasonable manner due to its commonplace. Their train transit system is far superior hence the more expensive gas for vehicles. 

 

3

Well we didn't live in the city centre of Munich - we lived in one of those small towns adjacent to Munich (but still on the S-Bahn line).  It was still considerably more expensive than living in Barrhaven, in Ottawa. 

Transit was definitely far and away superior to anything I've experienced in Canada.

There's a reason that the Government of Canada and the Candian Armed Forces provide subsidies for housing, utilities, and general cost of living to those living in Germany while representing the Government of Canada - they recognize that the cost of living is considerably higher over there.

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Using the tax loopholes to save for retirement = good.

Using tax loopholes to pay your kids to avoid paying taxes on income = bad.

When I was a dietetic intern, I only ever saw extremely expensive, over-the-top luxury cars in the parking lot spots designated "for physicians on call only."  I don't think have an expensive, luxury car is a real need.  Saving for retirement is such a need.  Paying for luxury cars when a far less expensive car would get the physician to and from the hospital is not a need.

The physicians at my Health Centre are on salary.  They are definitely not overpaid.  They drive regular cars.  (Some of theme drive high end cars, but high end "regular' cars that aren't crazy-expensive).  Some of the physicians who can afford multiple luxury homes and ridiculously expensive cars are almost certainly overpaid, given our single payer healthcare system.

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Hey everyone, 

I am a tax lawyer with some background on this. Our law firm in conjunction with an accounting firm are issuing a joint submission to Morneau regarding his proposed changes. Just to give you guys some perspective from a tax side. The perceived "tax loophole" is hard to close simply because it is hard to achieve perfect integration (i.e., earning income through a corporation or earning it as an employee - people should theoretically be indifferent). The feds do not recognize that doctors and many professional corporations do not enjoy some of the benefits that salaried employees do. Sick days, RRSP group matching, vacation days, etc. these all come "out of pocket" if you may for professional corporations. But the perceived unfairness stems from the fact that tax deferral opportunities compounds over time in a corporation - this would not have happened had an individual invested this himself or herself through, let's say a broker. 

Although I agree that rules regarding dividend sprinkling and income splitting need to be tightened, I believe that double taxing passive investment income earned in a corporation goes way too far. But, to an average Joe, this is not unreasonable. Individuals have little chance to avoid taxes when they invest unless they use a TFSA vehicle or a RRSP. RRSPs do not even have a tax savings advantage IF your retirement income is in the same bracket as your post-retirement income. RRSPs are truly useful if you contribute in a period of high taxation, and withdraw at retirement that is of a lower bracket. Individuals who cannot incorporate are at a disadvantage in that they cannot move funds without triggering tax. So it is easy to see how this is an issue when an average Joe sees private corporations that are able to use active business earnings to invest in marketable securities and this effect compounds through time. 

I think there needs to be better integration - as OMA have re-iterated that this effectively retracts from what the provincial government have promised Ontario physicians in lieu of a pay increase back in the day. I don't think the feds should go forward with it, but there are serious optics issue from a layman's perspective. Not only with doctors be hurt, lawyers in chambers will also be hurt as we also incorporate or form a limited liability partnership. There needs to be some serious dialogue between Morneau and its provincial counterparts as the provinces adopt the same tax base as the feds. I personally don't think the consultation process will be too favourable and Morneau will soon create a re-exposure of this draft. So relax, and see. 

Fee-for-service model is somewhat outdated - I believe that there needs to be a change in how we compensate physicians across the board. It should be based on a formula of salary + variable compensation.

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41 minutes ago, NutritionRunner said:

Using the tax loopholes to save for retirement = good.

Using tax loopholes to pay your kids to avoid paying taxes on income = bad.

When I was a dietetic intern, I only ever saw extremely expensive, over-the-top luxury cars in the parking lot spots designated "for physicians on call only."  I don't think have an expensive, luxury car is a real need.  Saving for retirement is such a need.  Paying for luxury cars when a far less expensive car would get the physician to and from the hospital is not a need.

The physicians at my Health Centre are on salary.  They are definitely not overpaid.  They drive regular cars.  (Some of theme drive high end cars, but high end "regular' cars that aren't crazy-expensive).  Some of the physicians who can afford multiple luxury homes and ridiculously expensive cars are almost certainly overpaid, given our single payer healthcare system.

True, but also likely an attending far into their career. Or not.  But honestly having a luxury car is not a terrible thing. Who are we to judge what someone does to save their money? I have a colleague with a luxury car, but they live at home, never eat out, and are very frugal otherwise - they just happen to like cars.

Also, I think there are many in their 20s and 30s who you likely(at least I do) see all the time eating out, having boutique coffees, desserts, craft beers, etc etc. Again those are all luxuries - it just so happens that some people choose to spend their extra money in different ways. 

But in all likelihood yes, that doctor with the luxury car - probably isn't the case of my colleague who is otherwise very frugal. But what they choose to spend with their income is really none of my business.  Especially given I have no understanding of their financial wellness or situation even remotely. Maybe they are otherwise independently wealthy already from family money(many in my medical school class), or had very good investments?Or chose not to have kids(Very expensive endeavour) Speaking of averages, its probably just that they have a decent salary and spent their money on something they wanted.  

Also, the salaries at many health centres are well in line with FFS, in many cases the work load to pay ratio is actually better than FFS. So maybe its just correlation and not causation there.  This was the reason i was led to believe that some of the health team models for FP were limited, because it was costing the govt too much money.

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