NLMA con­cerned about pro­posed tax changes

The Aurora (Labrador City) - - PUZZLES - BY BETH PEN­NEY

On July 18, the fed­eral Fi­nance Depart­ment an­nounced a 75day con­sul­ta­tion process on tax mea­sures, which will af­fect pri­vate com­pa­nies.

The New­found­land and Labrador Med­i­cal As­so­ci­a­tion (NLMA) has made a writ­ten sub­mis­sion to fed­eral fi­nance Min­is­ter Bill Morneau out­lin­ing its con­cerns with the pro­posed changes.

Ap­prox­i­mately half of the prac­tic­ing doc­tors in the prov­ince have reg­is­tered pro­fes­sional med­i­cal cor­po­ra­tions, and the pro­posed tax change will af­fect the abil­ity of these physi­cians to in­vest their earn­ings in their med­i­cal prac­tice, hire staff or plan for their re­tire­ment, the NLMA says.

Self-em­ployed physi­cians do not re­ceive health or den­tal ben­e­fits, life in­sur­ance or em­ploy­ment in­sur­ance ben­e­fits, while still manag­ing over­head costs, the as­so­ci­a­tion says.

“It is crit­i­cal for the fed­eral govern­ment to com­pre­hend how these pro­posed changes will af­fect doc­tors in New­found­land and Labrador and, in turn, the prov­ince’s health-care sys­tem,” NLMA pres­i­dent Dr. Lynn Dwyer said.

New­found­land and Labrador com­petes to re­cruit and re­tain doc­tors, and over the past decade has lost 54 physi­cians an­nu­ally to prac­tice out­side the prov­ince, the NLMA says.

The NLMA sur­veyed its mem­bers about how they will be af­fected by the pro­posed tax changes.

If the pro­posed tax changes are ap­proved, 83 per cent of NLMA mem­bers said they might con­sider re­duc­ing their num­ber of work hours to avoid pay­ing higher taxes, while 62 per cent said they would con­sider leav­ing the prov­ince to find work else­where, the NLMA stated.

“The pro­posed fed­eral tax changes will have the great­est im­pact in prov­inces that have a largely ru­ral, gen­er­al­ist-based sys­tem,” said Dwyer. “The NLMA is con­cerned that New­found­land and Labrador stands out as a ju­ris­dic­tion that may have the most se­vere un­in­tended im­pact of these pro­posed tax changes.”

The three tax mea­sures un­der re­view by the fed­eral govern­ment are “In­come sprin­kling,” the dis­tri­bu­tion of in­come from a pri­vate cor­po­ra­tion to a fam­ily mem­ber to be taxed at a lower rate; hold­ing a pas­sive in­vest­ment port­fo­lio in­side a pri­vate cor­po­ra­tion; and the prac­tice of con­vert­ing a pri­vate cor­po­ra­tion’s reg­u­lar in­come into capital gains.

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