Trudeau dismisses plea from doctors to reconsider capital gains tax change
CBC
Prime Minister Justin Trudeau is rejecting a call from some doctors for his government to reconsider its planned capital gains tax hike.
The doctors warn that the tax change could undermine efforts to recruit and retain physicians in Canada and threaten the stability of the health-care system.
Canada is facing a severe doctor shortage. An estimated 6.5 million Canadians are going without access to primary care as family physicians retire en masse and medical schools struggle to recruit new residents to replace them.
Speaking at Wanuskewin Heritage Park near Saskatoon Tuesday, Trudeau said the tax hike presented in the federal budget only asks "the wealthiest to pay a little bit more."
"We just don't think it's right that a student, or an electrician or a teacher be paying taxes on 100 per cent of their income while others have the opportunities to use accountants and pay taxes on only 50 per cent of that income," he said.
A capital gain is the difference between the cost of an asset — a cottage, an investment property, a stock or a mutual fund — and its total sale price.
Right now, only 50 per cent of capital gains are taxable; the budget proposes to increase that "inclusion rate" from 50 per cent to two-thirds on capital gains above $250,000 for individuals.
The budget also proposes to tax two-thirds of all capital gains earned by corporations and trusts.
Canadian Medical Association president Kathleen Ross told the Canadian Press earlier Tuesday that many doctors would be be hit by the hike because they incorporate their medical practices and invest for their retirement within their corporations.
Trudeau defended the measure, saying it's about fairness.
"This is about the fact that in order for people to succeed across this economy, at all generations, we need young people to succeed, we need young people to be able to buy homes in the coming years, we need young people to be confident of the future," he said.
"So yes we are asking the most successful in this country to do a little bit more to make sure that everyone can see themselves in the success of this country."
Ross said the proposed changes would increase "financial strain" on a class of professionals who often do not have access to pensions.
"We have seen this portrayed by the government as tax fairness for every generation, but realistically, there are certain members of the population that are going to be more impacted," Ross told the Canadian Press.
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