Hundreds of N.B. Doctors Would Consider Moving If Proposed Tax Changes Adopted

FREDERICTON – Nearly half of the doctors who responded to a recent survey by The New Brunswick Medical society say they would consider leaving the province if proposed tax changes for business owners are adopted by the federal government.

Dr. Lynn Murphy-Kaulbeck, president of the New Brunswick Medical Society, said this would have a negative impact on patient care in the province.

“The feedback from our members confirms that the proposed tax measures could seriously impact health care delivery in New Brunswick, and could ultimately harm patient care,” said Dr. Murphy-Kaulbeck in a release.

“Most doctors in New Brunswick and in the rest of Canada rely on legitimate tax measures to operate viable medical practices. They use tax planning to save for retirement and support their families. This provides security and financial stability to physicians, critical to attracting and keeping doctors in New Brunswick.”

More than 500 doctors responded to the survey, with 46 percent saying they might move their practice elsewhere. Sixty-five per cent said they would consider reducing the number of hours they currently work, and 25 per cent said they would consider retiring from the profession.

RELATED: Medical Resident Faces Uncertain Future in N.B. With Proposed Tax Changes

Seventy percent of doctors in the province are small business owners, not salaried employees. They employ staff, purchase equipment and supplies, rent or purchase offices, and pay insurance and taxes out of the fees they receive for each patient visit. Unlike salaried employees, fee-for-service doctors do not have health benefits, paid vacation, sick leave, or a pension plan.

With operating expenses and already high tax rates, Dr. Murphy-Kaulbeck says they can’t afford any more increases.

New Brunswick physicians have chosen to practice here despite the financial disadvantages,” she said. “They already pay some of the highest taxes in North America. The proposed changes to tax rules governing private corporations could seriously impact the province’s ability to recruit and retain the doctors that are desperately needed throughout the health care system.”

In a Huddle story published yesterday, medical resident Colin Rouse said medical students and residents are also fearful of the impact the changes could have on their future plans, and the subsequent impact on the health system itself.

“It definitely has the potential to have a huge impact on the health care system and that’s another huge concern for me because my plan is to work here,” Rouse told Huddle.

“I think with these changes you may see some of those older family doctors that are close to retirement considering just retiring because they’re not going to be compensated as much as they have planned … and certainly that’s going to put significant pressure on these new graduates that are coming out, especially if more grads are considering going south of the border or overseas to practice. We can see wait lists get longer for people waiting to see a family doctor and in turn waiting longer to be referred to a specialist if they do need those specialist services.”

The Medical Society expressed concerns about the three main proposed changes to the way private corporations are taxed:

  • “Income sprinkling,” which is using a private corporation to spread income among family members to create tax savings:
  • Holding a passive investment portfolio inside a private corporation.
  • The practice of converting a private corporation’s regular income into capital gains.