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CMA making the case for tax fairness

Most of Canada’s physicians – and CMA members – are self-employed and operate medical practices as small businesses, so statements by the federal government regarding potential alterations to the Canadian-Controlled Private Corporation (CCPC) framework have captured the attention and action of the CMA.

“We have followed a clear approach of communicating our position, undertaking research on the potential negative impacts that could result from changes to the CCPC regime, and ensuring the government understands the impacts of its potential decisions,” said Dr. Cindy Forbes, CMA President.

The CMA supports the commitment to support small businesses, such as medical practices, by reducing the small business tax rate from 11% to 9% given the significant challenges facing this sector. However, the CMA has also reached out to government decision-makers to explain and underscore the potential health sector impacts of possible changes to the current CCPC system.

In communicating to the government on this issue, the CMA makes clear that:

  • Canada’s physicians are highly skilled professionals, who provide a critical public service. Through their practices, physicians also create high quality jobs in communities across the country and contribute significantly to our country’s knowledge economy.
  • Canadian physicians are directly or indirectly responsible for hundreds of thousands of jobs across the country, they invest millions of dollars in local communities, and work to ensure that Canadians are able to access the care they need.
  • In addition to managing the many costs associated with running a medical practice, Canadian physicians typically enter the workforce with significant debt levels and at a later stage in life. For some, entering practice after training requires significant investment in a clinic or a practice.
  • Physicians cannot pass on the increased costs introduced by governments, such as changes to the CCPC framework, onto patients, as other businesses would do with clients.

As part of its pre-budget submission to the federal Minister of Finance, the CMA recommended that the federal government maintain tax equity for medical professionals by affirming its commitment to the existing framework governing CCPCs.

CMA members from across the country have also spoken out clearly on this issue, raising it in meetings with their Member of Parliament, writing letters to the federal government and outlining their concerns over the potential changes in a member survey.

The CMA also encourages members to consult and advise their tax, financial and legal advisors of their concerns of the government’s nebulous intention of bringing forward changes to the small business tax rate and the potential alteration of the CCPC framework eligibility. Associations representing these professionals are also engaging with finance officials on this issue.

The CMA will continue to press the government on this issue and will ensure members are aware of further developments.

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