Unintended consequences? That’s hard to believe. They were warned, time and time again to not spend, borrow and increase the capital gains tax. Yet, that’s exactly what they presented in the “fairness” budget. It’s as if they used the warnings of what not to do as a roadmap to further damage our already failing economy. Access to Health care is fundamental to a functioning society. The safety, security and well-being of Canadians is not their priority. …..

“When Finance Minister Chrystia Freeland first introduced a hike to Canada’s capital gains tax, she promised that the measure would only affect an infinitesimally small proportion of wealthy Canadians.

“Only 0.13 per cent of Canadians — with an average annual income of $1.4 million — will pay more on their capital gains,” she said in her April 16 budget speech.

But just a week later, the tax is yielding a raft of unintended consequences much larger than a few millionaires seeing a hit to their take-home pay.

More than 3,500 entrepreneurs and tech managers have now signed their names to a petition forecasting that the change will push investment out of Canada and to the United States and crater Canadian productivity. Critics of the tax hike include the founder and management of Shopify, Canada’s largest tech company.

But perhaps most dramatically, Canadian doctors are warning that tax will further exacerbate the country’s critical shortage of general practitioners.

A Tuesday statement by the Canadian Medical Association (CMA) said many family doctors operate as corporations, and that the hike cuts into retirement plans that were disproportionately funded by capital gains. “The risk of already over-stretched physicians leaving the profession or reducing their hours in response to heightened taxation is real,” it read.

An estimated 6.5 million Canadians already lack access to primary care. And even before the hike to the capital gains tax and its potential reduction on working physicians, this figure was projected to spike to 10 million as early as 2027.

One of the main reasons is that family doctors operate at razor-thin profit margins as a result of rigid compensation guidelines in Canada’s health-care system.

In Ontario, for instance, general practitioners are paid a set rate of $37.95 per patient visit, regardless of the complexity of the appointment.

Michael Verbora, an assistant clinical professor at McMaster University, posted figures last week showing that the per-visit fee has risen just $1.10 since 2020, even as inflation rose by a compounded 15 per cent. Assuming 35 per cent overhead, that represents a 19 per cent decrease in take-home pay.

“This is why you can’t find a family doctor and why practices are closing. No business can survive losing 20 per cent income in 4 years,” he wrote.

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But even if family doctors have been consistently earning less than salaried colleagues working in hospitals, their financials were helped by the fact that they could incorporate and thus evade the top-level tax brackets they would pay if they simply reported their revenue as income.

The CMA’s warning was that a hike to the capital gains tax will disproportionately impact family doctors who have been reinvesting excess earnings into their corporation, usually with an eye towards saving for retirement.

“It is completely unfair, late-in-the-game taxation for those physicians who did follow the rules of the day and save for their retirement inside of our professional corporations,” CMA president Kathleen Ross told CTV News.

The prospect of family doctors closing down en masse was put directly to Liberal Minister for Small Business Rechie Valdez in an appearance on CBC’s Power and Politics.

“We recognize that, but one of the things that we will continue to do is encourage foreign credential recognition … we’re encouraging bringing talent from other countries,” Valdez said.

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When Prime Minister Justin Trudeau was asked whether he would consider an exemption for doctors, he replied “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 opportunity to use accountants and pay taxes on only 50 per cent.”

Parliamentary Budget Officer Yves Giroux — a perennial critic of Trudeau government fiscal policy — was among the first to publicly warn that Freeland’s promise of a limited impact for the capital gains hike probably wouldn’t hold.

On Friday, Giroux told CTV that despite official pledges, the policy would likely spawn “collateral damage.””