Dear Prime Minister Trudeau,
I am writing to you about your government’s decision to drastically alter the ability of self employed physicians to use incorporation to save for their retirement. The ability to save for maternity leave/sick leave/disability, benefits to which most employees are entitled, will also be significantly altered. I apologize for the length of this letter but I ask your indulgence to read it in its entirety.
For background, let me tell you a bit about myself. My parents came to Canada in 1975, when your father was in power. They left behind everything: stable jobs as professionals in their home country, arriving here with a 4 year old, 2 year old and a baby on the way. They were unable to obtain jobs in their own fields so started from scratch, in minimum wage jobs. My father was eventually able to start his own business. He worked 18 hours a day, every day, for two decades, in a family owned small business much like the ones your legislation threatens to destroy. By saving in his corporation, he was able to help his 4 children pay some of their university expenses. He also sponsored his own parents to come to Canada and supported their living needs entirely by himself; they never required social assistance. In short, this one man, supported eight family members by building a small business. My siblings and I learned from my parents’ work ethic and all pursued higher education, becoming professionals. In fact, he considers it the greatest reward of his sacrifice that his children were able to be successful in their careers in this great country.
I am an emergency physician. Like thousands of my colleagues, I accumulated a huge debt to complete my medical training. I finished when I was 29 years old and entered the work force. I have two children, both maternity leaves were funded by me. I also worked part time for several years while they were young, as my shift work was not amenable to traditional child care settings, while paying off my school debt. My true savings began at the age of 36, when my youngest was in school; just over a decade after my peers who did not go to medical school.
I love what I do: ER doctors make a difference in the health of a community. If it wasn’t for emergency departments, the sickest, most vulnerable patients in our society would not have anywhere to turn 24 hours a day, 365 days a year. We work evenings, nights, weekends and holidays. The shift work is gruelling: there is rarely time in a 10 hour shift to eat, visit the bathroom, or sit down. We observe horrible traumas, we fix broken bodies and try to heal wounded souls: addiction, mental health, life threatening illnesses. Shift after shift, these stories burn an imprint on our souls. Most emergency physicians burn out long before age 65; it is a career that is hard to sustain as it is physically and emotionally demanding. Yet, there is nothing else I would rather do.
In Ontario, the right to incorporate was granted to physicians in lieu of a fair wage increase by the provincial government in 2001. Given our contracted working careers, usually starting a decade after others, the ability to save for our retirement within a corporation was one that every tax advisor suggested physicians utilize. This was not a loophole. It was an intended tax planning strategy. It is not tax avoidance, but rather tax deferral. The language being used to portray hard working physicians as tax cheats has demoralized every one of my colleagues. It is patently unfair, and I am deeply disappointed that your government would use this strategy to try to gain public sympathy for this agenda.
The example of Susan and Jonah in the tax document aims to portray the self employed person as cheating out of their fair share of taxes. On the contrary, the unfairness lies in the fact that the employee has access to a pension and benefits that are worth far more than the ‘extra’ amount they are paying in taxes. Physicians in Canada would love to be offered a fair salary, 40 hour work week, benefits, and an employer matched pension, but this is unlikely to ever materialize. To change the rules of how we can save for our own retirement 15 years after they were first written, is not only unfair, it borders on illegal.
Has your government thought through the human health resource impact of this policy? If a physician who thought they were 5 years away from retirement, now has 30% of their savings taken, what will they be forced to do? They will work for another decade. Is this good for patients? To have someone forced to work, long after they are mentally and physically capable of being at their best? While these older doctors remain in their positions, newly graduated physicians will find themselves unable to get jobs in hospitals and clinics. They will leave for countries like the USA where there is predicted to be a shortfall of 80,000 physicians in the next few years. Canada will have spent years educating physician talent only to suffer the biggest brain drain at a time when the ‘silver tsunami’ is about to arrive on our shores. I urge you to consider the impact on the health of Canadian patients.
Now onto the impact on women physicians specifically. Your government espouses to advocate for females. MP Mark Gerretsen’s Bill C-243 made the news with this quote: “No woman in Canada should have to choose between being a mother and pursuing her dream job”. Yet, for many woman physicians, the tax legislation will do exactly that. If unable to fund their maternity leave or pay their professional dues and office overhead, they may choose to limit the size of their family. Why is there one standard for Canadian women, and another for Canadian women physicians? That seems wrong on every level.
Mr Trudeau, I proudly stood on Parliament Hill with my family at the 150th celebrations. I heard you tell Canadian youth that you will foster innovation. This tax legislation will do the exact opposite of that. It will encourage mediocrity: people will seek out jobs with an employer, a pension and benefits. The risk takers will see Canada as a net losing proposition to start a small business. And sadly, though I love what I do, I have sat with my kids and told them not to pursue a career in medicine because the risk/reward ratio has tipped far too heavily toward risk. It was a sad day for me when I had that talk with my children, as it was for my colleagues who have had similar talks. Is this the Canada we want? Where the best and brightest do not take risks, innovate, try something new?
Mr Trudeau, you were elected on a majority mandate handed to you by the people. My family has voted Liberal for nearly half a century. However, this move by your government to manipulate public opinion about the very people that care for the health of the nation, has caused profound and utter disappointment amongst Canadian doctors. If this legislation passes, I can assure you, I will never vote Liberal again.
Power given, carries great responsibility. Please take the time to hear what small business owners are saying to you. It is not too late to prevent the destruction of Canada’s economic engine.
I look forward to hearing from you after you have taken the time to consider this letter.