Capital gains change: CMA ‘deeply concerned’ about impact on health care

The CMA said in a statement Thursday that the capital gains tax changes will worsen barriers for retaining and recruiting physicians.

The Canadian Medical Association says it is “deeply concerned” about how the federal government’s plan to increase the capital gains inclusion rate could further harm the health-care system.

In a statement Thursday, the CMA says the rate change proposed in the federal budget will worsen barriers to retaining and recruiting physicians as Canadians continue to struggle with access to care.

“The reality is that the federal government is putting at risk its own health care agenda, which is contingent on broadening access to family medicine, the foundation of our health care system,” CMA president Dr. Kathleen Ross said in the statement.

Ross says physicians are feeling “betrayed, discouraged and deflated” by the tax change, which Prime Minister Justin Trudeau recently announced will start June 25 this year.

“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,” Ross said.

Finance Minister Chrystia Freeland tabled the federal government’s 2024 budget on April 16, which included a proposal to raise the inclusion rate — the portion of capital gains on which tax is paid — to 66.7 per cent for individuals realizing more than $250,000 in capital gains annually.

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 CMA says most community-based physicians rely on their professional corporations to save for important life events, as most do not have access to employer or government benefits, sick leave or paid vacation.