GOOD BYE DOCTORS?

28 September, 2017

Good Afternoon; I am pleased to attach an article that appeared in today’s newspaper regarding proposed tax changes to small business corporations as they relate to doctors.

Good Afternoon;
I am pleased to attach an article that appeared in today’s newspaper regarding proposed tax changes to small business corporations as they relate to doctors.
Cheers
Bob


THE OTTAWA SUN
DAVID REEVELY

FIRST POSTED: WEDNESDAY, SEPTEMBER 27, 2017 04:49 PM EDT | UPDATED: WEDNESDAY, SEPTEMBER 27, 2017 04:53 PM EDT


Ontario will lose two-thirds of its doctors after Finance Minister Bill Morneau changes the tax rules for their personal corporations, if you believe a survey by a group called Concerned Ontario Doctors, which you shouldn’t. Over 40 percent of current Ontario doctors say they’ll bail out, the survey found — move to another province or country, or just give up on medicine altogether. Another quarter says they’ll retire earlier, continuing to work not being worth the effort for the money they’ll make. Only about 30 per cent say they’ll keep working here. A stunning three-quarters of current Ontario medical trainees say they’ll abandon the province as they begin their careers, according to the survey. This means “a likely mass exodus of doctors,” the group says, “a recipe for the collapse of our health-care system.” It’s a staggering finding, which critics of both the federal and provincial Liberal governments are flapping around to show how new federal limits on corporate tax sheltering will detonate provincial health care. There is a lot for doctors to be angry about, but let’s take a breath. Concerned Ontario Doctors is the most militant faction within the Ontario Medical Association, instrumental in bringing down the leaders of the OMA earlier this year over a deal on fees they’d reached with the provincial government. To their credit, they’re careful not to call the work a poll, which would imply statistical rigour. But they’ve tarted the work up in every other way as if that’s what they’d done, with a margin of error and charts and percentages in the responses calculated to two decimal places.
With more than 5,000 respondents, they claim a margin of error of 1.2 per cent, for instance. Real pollsters would love that kind of precision; they can’t get it without spending a ton of money on thousands upon thousands of calls to get a very large sample of respondents that’s as close to random as they can get it. But Concerned Ontario Doctors aren’t magicians. What they have is an online survey based on a link they emailed to members of the OMA, conducted between Sept. 4 and 11. They say they sent a followup email to make sure everybody saw it. We can be reasonably confident the people who answered the questions are doctors. Beyond that, things get dicey. With this survey, most basically, just under three-quarters of the people who answered said they have personal corporations. According to the Ontario Medical Association, the proportion of its members who use corporations is closer to half. Still a lot, but the sample is skewed. The respondents are notably younger, maler and more likely to be specialists than the actual population of Ontario’s doctors. (The Canadian Medical Association keeps detailed stats on this stuff.) A margin of error is something you can only calculate if your respondents are a random sample. “The people who felt strongly enough about this to answer our email” is not that. It’s called a convenience sample, which is statisticspeak for “Oh, please.” Doctors’ groups can’t claim a privileged position in the discussion as public scientist-angels and screw around like that. This discussion needs some scale, and a realistic sense of the consequences. The federal plan will take money out of doctors’ pockets, money the provincial government actively told them to go and get as a way of boosting their incomes without directly increasing fees. Incorporated doctors will have to at least reconsider both their professional arrangements and their household finances, and possibly restructure them from scratch, which is a colossal pain. The federal finance department says the proposed changes will add $250 million a year to the federal treasury, by removing some of the benefits for doctors of billing for their work through a tiny corporate structure instead of as, basically, freelance contractors to the government. Ontario alone spends almost $54 billion on health care. The health premium the province started charging in the McGuinty years brings the Ontario government $3.8 billion. But apparently in addition to ending medicine, the $250-million bite will end entrepreneurship, small businesses and the family farm.

Even if every dollar of the $250 million came from the 20,500 Ontario doctors who have personal corporations, we’d be talking about $12,000 each, out of an average gross income of $323,000. (That’s not remotely what’ll happen — the changes apply to many people besides doctors, and to every province and territory.)

Of course doctors don’t like it. Nobody would. Anybody would fight it, as doctors are. But tumbleweeds will not blow through the med-school hallways. dreevely@postmedia.com

Securing your Family's Future

Following the advice of a trusted advisor is shown to be a significant factor in building wealth and achieving investment success. Our team can provide sound advice and a Personal Wealth Management Strategy™ to guide & assist you & your family at any stage of life.