Proposed tax changes could drive doctors out of country, physician warns

Cape Breton anesthesiologist Dr. Craig Stoneis warning Ottawa's proposed tax changes for small businesses will make it even more difficult to recruit and retain doctors, andcould even send Canadian physicians to the U.S.

Stone ispresident of the Cape Breton Medical Association, which metlate last week to discuss the implications of the proposed changes.

"This is going to cause significant hardship," said Stone. "Suddenly we're going to have the rug pulled out from under our feet. This is going to be catastrophic."

He said some local doctors are already talking about leaving Canada altogether.

Proposed changes

The planned reforms, introduced by the Trudeau government this summer, include eliminating income "sprinkling,"whichallows incorporated small businesses to get taxed at a lower rate by shifting income to family members who don't necessarily work for them.

Another reform would reduce the ability of private corporations to make passive investments in stocks and real estate.

A third reform would eliminate the ability to convert a corporation's earnings into capital gains, which are taxed at a lower rate.

Recruitment gains in jeopardy

Stone says about 70 per cent of doctors in Nova Scotia are incorporatedand would see their invoices drastically reduced.

He points out that doctors, like many small business owners, have no company pensions, no employment insurance benefits and no life insurance. He says doctors usepassive investment to set aside money for retirement and other contingencies.

Last spring, Cape Breton doctors held rallies to call attention to the number of doctors who were leaving the island. The physicians said their colleagues were fed up with a lack of servicesand a lack of local leadership within the health authority.

The province has since announced it has recruited 16 new doctors.

Stone says the new tax regime will reverse those efforts and will make it all the more difficult to convince doctors to stay in Cape Breton, or anywhere in the country.

Stone says he's shocked the Nova Scotia government has not spoken out about the potential impact of the changes on recruitment in the health-care sector.

Province responds

Aspokesperson for the Department of Finance and Treasury Board told CBC News in an email that the department isassessing the potential impact of the proposed changes.

"We will provide any input to the federal government within the consultation period, as the department has done previously when the federal government has proposed changes."

Ottawa is accepting comments on the proposed changes until Oct.2.