Physicians share their stories – why the federal government’s tax change is the wrong thing to do

In my last President’s letter I asked physicians in BC to share their stories about how the proposed federal tax changes will hurt them and negatively impact patient care. I asked them for their personal stories and I received many – from residents and early career physicians to those recently retired.

The submissions were heartfelt and passionate. One of the common themes I heard is that physicians are angry about being falsely tarnished as a privileged, elite group of “wealthy professionals". The vast majority of physicians who incorporate run small businesses or practices. They invest over 30% of their compensation in overhead, which includes equipment and staffing costs. We pay our staff benefits that we must purchase for ourselves. We invest regularly in new equipment to provide our patients the best care. We don’t have pensions, we don’t get paid for sick leave, and in fact we don’t receive any benefits that salaried employees get. And many of us have huge debts to pay back. Incorporation is a mechanism to somewhat help us address these costs and make our practices sustainable. If the cost of doing business becomes unsustainable, our patients will suffer with reduced access to care.

That was just one of the themes in the letters we received. I am going to take this opportunity to share some of the other themes with you. If you are looking for more detailed information on how the proposed tax changes would impact physicians, click here.

What doctors told us – themes:

1. The burden of debt for new-to-practice physicians. We heard from recent graduates who are carrying huge debt loads from student loans, and don’t see how they can manage repayment if the tax changes are implemented.

   One young physician said he may not go into family medicine at all:

   "I'm fearful that the proposed changes, along with the high costs of overhead and costs of living, will cripple me financially before I can even provide care as a full scope family physician.”

   Some young physicians said they may consider giving up family practice or leave Canada altogether. The net result will be fewer physicians going into Family Medicine, reversing recent gains and worsening patient access to primary care. 
    

2. For retirees, a plan that is “unfair and immoral”. At the other end of the spectrum, we heard from recently retired physicians.

   One likened this to “getting slaughtered at the knees despite the fact that the corporation was simply following the allowable laws up to that point.”

   Another stated: “I am almost 70 years old and am finally able to retire next year… For the government to now step in and unfairly strip me of my accumulated savings is unfair and immoral... especially from a government that prides itself on fairness.”
    

3. Impact on patients. The impact on patient access to care is one that recurs throughout many of the responses.

   Some of the most powerful stories were from physicians working with high needs, vulnerable populations in both rural and urban settings who use corporate structures to develop sustainable practice models. With the proposed tax changes, some told us they will have to leave communities they cherish and patients who badly need their help.

   One physician wrote: “Our current corporate structure allows my family to plan financially for a future where there will be no pension for us. It creates a structure where one benefits from working hard in these under-serviced areas where recruiting full time physicians is extremely challenging.”

   Another commented: “The reality is that physicians have options available to them, and if the government bullies them, many will leave in protest, which will worsen urban-rural service gap that already exists in our country.”
    

4. Innovative business practices and value for patients. We heard from groups of physicians who have invested in clinics to streamline care for patients, improving access and reducing wait times. These are not government funded innovations, but the result of professionals investing their money together, with the goal of providing better patient care.  

   Here’s what one such physician said: “Small enterprises, including professional corporations, take risks, both personal and financial to establish, maintain, and grow our businesses. This is done without any of the guarantees and protections afforded to salaried employees.”

5. Mischaracterization of the profession. As I said at the start of this blog, this is a recurring and powerful theme in the correspondence we received.  Physicians expressed outrage at the image of physicians presented in the communications thus far from the federal Minister of Finance. 

   Being characterized as “wealthy professionals” who use loopholes to avoid paying their fair share is offensive. The advantages of professional corporations have been used as incentives during physician negotiations, as recruiting tools both within and outside Canada, and have been completely legal. 

   One physician said it felt “like a slap in the face”.

   Another one said: “During the election campaign, Justin Trudeau said ‘We want to focus on helping small business owners who are working hard, who are creating jobs for members in their community and serving their community’. My understanding was that this implied that doctors who have corporations are not doing those things. That somehow through incorporating and trying to run a business smartly we are just tax cheats. I personally find this offensive and I believe that most of my colleagues (incorporated or not) would feel the same way.”  
    

These are just a sample of the many stories and comments we received. We urge physicians to continue to send your stories to me at View Email Addresspresident@doctorsofbc.ca.

We will be using these stories to inform our submission to the federal government that will accompany the CMA’s report. Also, we urge physicians to write to their Member of Parliament and copy the federal Minister of Finance, Minister of Health and the Prime Minister. A template letter can be found here (.docx).

Doctors – your voices are clear and powerful. Keep telling your stories – through Doctors of BC, letters, and social media. We must ensure the federal government respects and values the contributions of physicians, and enables us to continue to deliver the care our patients need and deserve.