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Amendments to PIPEDA, Bill S-4

https://policybase.cma.ca/en/permalink/policy11194
Date
2014-06-09
Topics
Health information and e-health
Ethics and medical professionalism
  1 document  
Policy Type
Parliamentary submission
Date
2014-06-09
Topics
Health information and e-health
Ethics and medical professionalism
Text
The Canadian Medical Association (CMA) is pleased to make submissions on Bill S-4. CMA has followed the history of PIPEDA and participated in the studies of various Standing Committees, most notably and recently in 2007 to the House of Commons Standing Committee on Access to Information, Privacy and Ethics. CMA is pleased that amendments to PIPEDA are once again being considered. The Canadian Medical Association represents over 80,000 physicians in Canada. Privacy is an important value to physicians and the patients to whom they serve. This is reflected in our Code of Ethics and policies, in particular, Principles for the Protection of Patients' Personal Health Information and Statement of Principles: The Sale and Use of Data on Individual Physicians' Prescribing. Physicians are also required to abide by privacy and confidentiality standards of practice. Thus, the CMA has a strong interest and valuable insights into the topic of personal information and privacy with respect to health information. We thank the Standing Committee for the opportunity to comment on the proposed amendments to PIPEDA. Our key comments are outlined below: Issue 1: CMA supports the existing legislative framework on the collection, use and disclosure of personal information produced by an individual in the course of their employment, business or profession ("work product") and suggests further amendments focus on strengthening it further. CMA supports the current standing of work products, that work products are considered to be personal information. That is, we support the framework defining personal information as information about an identifiable individual and that there is no carved out definition or exemption for "work product". CMA supports the position of the Office of Privacy Commissioner's following its 2007 investigation on work products, that they should not be exempted for two main reasons: * The exemption is not needed, and it would be inconsistent with the balanced approach in the current definition of personal information. The current definition of personal information and the approach to deciding issues based on that definition have worked well. They have promoted a level of privacy protection that balances the right of privacy in personal information with the needs of organizations for the reasonable and appropriate collection, use and disclosure of personal information. ...Because the concept of "work product" is ambiguous, excluding it from the definition of personal information could have unpredictable consequences that would diminish privacy unnecessarily. * (http://www.priv.gc.ca/parl/2007/sub_070222_03_e.asp) It is the CMA's position that work products should be considered personal information and given the section 7 amendments, work products should only be collected, used or disclosed without consent only if it is consistent with the purposes for which the information was produced. In the case of physicians, a prime example of a physician's work product is prescribing information. Prescribing information is a synthesis of assessing patients - by probing into their health, familial, social and sometimes financial background - infused with medical knowledge, skill and competencies resulting in a diagnosis and treatment plan, which often includes prescribing a medication or test. Not only is the physician's prescribing information a product of physicians' work but would not exist but for a trusting physician-patient relationship wherein the patient's private and personal information are shared under circumstances of vulnerability and trust. The outcome is that this is personal information. Prescribing information is about an individual: it includes the name of the patient, the name of the prescribing physician, and the drug name, dosage, amount and frequency; giving major clues as to what the patient's health issue(s) are. For further clarity, however, CMA recommends that physician information, and physician work products, should be specifically recognized within the legislation as personal information. To this end, we would propose that the following addition be made to the definition section under personal health information: Section 2.(1) "personal health information", with respect to an individual, whether living or deceased, means .....(d) information that is collected or is the outcome of collecting information in the course of providing health services to the individual; CMA supports the amendments to subsections 7(1)-(3) of the Act that any subsequent collection, use and disclosure of work products without consent must be related to the original purpose (of collection, use and disclosure). This relationship reflects the government's understanding and faithfulness to privacy principles. This is particularly critical when dealing with health information, and is even more critical in today's world given the ease of linking information through advancements in technology. In the absence of a causal relationship, personal information should not be used for system performance, commercial enterprise, data brokering, research, assessment or other purposes. CMA recommends that the legislation should go further and allow persons who believe that protection cannot be afforded under the legislation that they have the authority to refuse to communicate the information. This is the conceptual approach taken in Quebec's Act Respecting the Protection of Personal Information in the Private Sector wherein persons have an opportunity to refuse that professional information (as defined therein) be used for commercial purposes. Physicians are constantly writing prescriptions and such information should only be used for other purposes in the interests of patients and the health care system, and not to serve commercial interests or marketing strategies. If physicians do not feel that such protection is afforded patients, then they should be permitted to refuse that such information be collected, used or disclosed. Patient privacy should be primary. And finally, addressing work products in legislation clears up past differences of interpretation by Privacy Commissioners thus, providing certainty and clarity to the public. Recommendation 1: That Section 2. (1) "personal health information", be amended to read as follows: "personal health information", with respect to an individual, whether living or deceased, means .....(d) information that is collected or is the outcome of collecting information in the course of providing health services to the individual; Issue 2: CMA is pleased to see a section on breaches of security safeguards and recommends greater specificity. As noted above, physicians have responsibilities as data stewards and custodians of health information. As such, CMA supports breach notification measures that would enhance and protect patient privacy. In principle, we support the proposed amendments of breach disclosures to the Privacy Commissioner, to individuals and to organizations. However, CMA is concerned that meeting the requirements may be confusing. For example, in the health care context, it is easy to surmise that all health information is "sensitive". A far more difficult matter is determining whether the risk reaches the threshold of "significant harm" and the "probability" that the information "will be misused". The result being that incidental disclosures will be reported causing unnecessary concern and confusion in the patient population. Further specificity is recommended and we suggest something akin to Ontario's Personal Health Information Protection Act, 2004 (PHIPA). The PHIPA is an act specifically dealing with personal health information. One of its purposes is "to establish rules for the collection, use and disclosure of personal health information about individuals that protect the confidentiality of that information and the privacy of individuals with respect to that information, while facilitating the effective provision of health care" (section 1a ). The PHIPA notification provision states that the individual shall be notified "...at the first reasonable opportunity if the information is stolen, lost or accessed by unauthorized persons", [section 12(2)]. CMA is unaware of any concerns with this approach. The language of PIPIEDA is one of reasonable belief of real risk of significant harm to an individual. The issue is the test for required notification of patients for incidental inadvertent breaches and decreasing "notification fatigue". To illustrate the issue, if physicians were told today that patient data could be retrieved from the drums of discarded photocopiers and printers, it would be inappropriate for legislation to suggest that the entire patient population during the life of the photocopier or printer be notified. To this end, we recommend that there be acknowledgement that in some circumstances notification may not be required. The probability of misuse under PIPEDA is more ambiguous than the PHIPA test. Under PHIPA, the approach is more objective in that the data must be stolen, lost or accessed by unauthorized persons. To our knowledge, the Ontario model has been in place for almost a decade with no significant issues and thus we submit is one that works. In other jurisdictions (eg., Newfoundland and Labrador, Nova Scotia, New Brunswick) with health privacy legislation, there is acknowledgement of trying to balance notification and those breaches unlikely to result in harm by directly indicating when notification is not required. Recommendation 2: CMA recommends that the statute move towards a more objective test and acknowledge that there are situations when notice is not required. Issue 3: CMA supports disclosure without consent under limited circumstances, but finds the current list of disclosures overly inclusive. Health information is considered highly sensitive information and is initially collected for the purpose of individual patient health care. It should only be disclosed with consent and in only some exceptions without consent. The PIPEDA amendments for disclosure without consent have been broadened. Privacy, confidentiality and trust are the foundations of the patient-physician relationship. Without these fundamental values in play, open and honest communications cannot occur and patients would not receive the care they require. Both the patient and the physician have significant investment in the relationship. CMA respects the requirements to disclose information without consent under certain premises, such as required by court order or statute. However, any kind of activity requiring physicians to disclose patient's information without consent for the purposes of advancing a government or institution's goal could jeopardize the relationship. Both the patient's consent and the physician's consent should be required if there is potential to disturb this relationship. The physician is fiduciary of the relationship and is appropriately situated to assess and determine whether disclosure will disturb the relationship. While CMA acknowledges that certain situations may require that disclosure occur without consent (eg. purposes of investigating fraud, national security, abuse or as legally required), disclosure for less malicious activities (e.g., breaches of an agreement, insurance claims) ought to require a court order or warrant. For example, under the proposed section 7(3)(d.1) if a physician were in default of a contract with a technology company supplying electronic medical record software or app to his/her clinic, the company could disclose health information without consent for the "purposes of investigating a breach of an agreement". While we appreciate that there is a caveat that disclosure without advising the patient can only occur if there is a reasonable expectation that the disclosure would compromise the investigation, we submit that leaving the determination of what is "reasonable" to an interested party to the breach is unfair to all. Another example, if a physician is a witness to a dispute between an employer and union representing an employee for denial of long term disability by an insurance company, and has filed a witness statement which includes a medical report he/she wrote to the employer's insurance company, under the proposed section 7(3)(e.1) disclosure of health information without consent is permitted in order to assess, process or settle an insurance claim. CMA is concerned that the disclosure amendments are overly broad and do not differentiate sufficiently between highly time sensitive or grossly malicious situations, and those where it is merely expedient or an administrative encumbrance to seek consent. In addition, the disclosure requirements are framed in permissive (ie., may) and not mandatory language (ie., shall). This is very problematic when the "organization" is a physicians' clinic unless the physician's own consent is made as a pre-condition. CMA believes this suggestion is a progressive one in keeping with the broadened disclosure amendments. Physicians are in a relationship of trust and take seriously the protection of patient privacy and confidentiality, for which they are trained and are ethically and legally required to protect. To place physicians in a position which might entail breaching this trust may impact the confidence of the physician and the patient in the patient-physician relationship which is required to properly formulate appropriate treatment plans; thus, negatively impacting the health of Canadians. Recommendation 3: That disclosures of health information without consent require a warrant or subpoena or court order. Furthermore, disclosures of health information require the physician's consent that in his/her opinion the disclosure does not harm the patient-physician relationship. And, finally any broadened disclosure situations be restricted to criminal activity or that impacting national security. Conclusion Once again, CMA appreciates the opportunity to provide comment as part of the committee's study of Bill S-4. CMA is prepared to work with Parliament, governments, health professionals and the public in ensuring legislative frameworks for the collection, usage and disclosure of personal information for legitimate and reasonable purposes.
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Canadian Medical Association Submission on Bill C-462 Disability Tax Credit Promoters Restrictions Act

https://policybase.cma.ca/en/permalink/policy10812
Date
2013-05-22
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2013-05-22
Topics
Physician practice/ compensation/ forms
Text
The Canadian Medical Association (CMA) is pleased to present this brief to the House of Commons Standing Committee on Finance regarding Bill C-462 Disability Tax Credit Promoters Restrictions Act. The Canadian Medical Association represents 78,000 physicians in Canada; its mission is to serve and unite the physicians of Canada and to be the national advocate, in partnership with the people of Canada, for the highest standards of health and health care. The CMA is pleased that the House of Commons has made Bill C-462 a priority. This bill is an important step toward addressing the unintended consequences that have emerged from the Disability Tax Credit since 2005. Part 2: Issues to be addressed In 2005, the Disability Tax Credit was expanded to allow individuals to back-file for up to 10 years. While this was a welcome tax measure for individuals with disabilities, the CMA has been urging the Canada Revenue Agency to address the numerous unintended consequences that have emerged. Central among these has been the emergence of a "cottage industry" of third-party companies engaged in a number of over-reaching tactics. The practices of these companies have included aggressive promotional activities to seek and encourage individuals to file the Disability Tax Credit. The primary driver behind these tactics is profit; some companies are charging fees of up to 40 per cent of an individual's refund when the tax credit is approved. Further to targeting a vulnerable population, these activities have yielded an increase in the quantity of Disability Tax Credit forms in physician offices and contributed to red tape in the health sector. In some cases, third parties have placed physicians in an adversarial position with their patients. We are pleased that this bill attempts to address the concerns we have raised. The CMA supports Bill C-462 as a necessary measure to address the issues that have emerged since the changes to the Disability Tax Credit in 2005. However, to avoid additional unintended consequences, the CMA recommends that the Finance Committee address three issues prior to advancing Bill C-462. First, as currently written, Bill C-462 proposes to apply the same requirements to physicians as to third-party companies if physicians apply a fee for form completion, a typical practice for uninsured physician services. Such fees are subject to guidelines and oversight by provincial and territorial medical regulatory colleges (see Appendix 1: CMA Policy on Third Party Forms: The Physician Role). The CMA recommends that the Finance Committee: * Amend the definition of "promoters" under section 2 to exclude "a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment." * If the committee imports the term "person" from the Income Tax Act, then the applicable section of Bill C-462 should be amended to specify that, for the purposes of the act, "Person does not include a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment." Second, the CMA is concerned that one of the reasons individuals may be engaging the services of third-party companies is a lack of awareness of the purpose and benefits of the Disability Tax Credit. Additional efforts are required to ensure that the Disability Tax Credit form (Form T2201) be more informative and user-friendly for patients. Form T2201 should explain more clearly to patients the reason behind the tax credit, and explicitly indicate there is no need to use third-party companies to submit the claim to the CRA. The CMA recommends that the Finance Committee: * Recommend that the Canada Revenue Agency undertake additional efforts to ensure that the Disability Tax Credit form is more informative, accessible and user-friendly for patients. Finally, the CMA recommends that a privacy assessment be undertaken before the bill moves forward in the legislative process. It appears that, as written, Bill C-462 would authorize the inter-departmental sharing of personal information. The CMA raises this issue for consideration because protecting the privacy of patient information is a key duty of a physician under the CMA Code of Ethics. Part 3: Closing The CMA encourages the Finance Committee to address these issues to ensure that Bill C-462 resolves existing problems with the Disability Tax Credit while not introducing new ones. The CMA appreciates the opportunity to provide input to the Finance Committee's study of this bill and, with the amendments outlined herein, supports its passage. Summary of Recommendations Recommendation 1 The definition of "promoters" under section 2 of Bill C-462 should be amended to exclude "a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment." Recommendation 2 If the Committee imports the definition of "persons" from the Income Tax Act, the applicable section of Bill C-462 should be amended to specify that, for the purposes of the act, "Person does not include a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment." Recommendation 3 The Canada Revenue Agency should undertake additional efforts to ensure that the Disability Tax Credit form is informative, accessible and user-friendly. Recommendation 4 Prior to advancing in the legislative process, Bill C-462 should undergo a privacy assessment.
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Canadian Medical Association Submission on Motion 315 (Income Inequality)

https://policybase.cma.ca/en/permalink/policy10715
Date
2013-04-25
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2013-04-25
Topics
Physician practice/ compensation/ forms
Text
The Canadian Medical Association is pleased to present its views to the House of Commons Standing Committee on Finance regarding income inequality in Canada. The Canadian Medical Association represents 78,000 physicians in Canada; its mission is to serve and unite the physicians of Canada and to be the national advocate, in partnership with the people of Canada, for the highest standards of health and health care. Income inequality is a growing problem in Canada. According to a Conference Board of Canada report, high income Canadians have seen their share of income increase since 1990 while the poorest and even the middle-income groups have lost income share. In 2010 the top quintile of earners accounted for 39.1% of Canadian income while the bottom quintile only accounted for 7.3%. These numbers led to a ranking for Canada of 12 out of 17 among other high income countries in terms of income inequality.1 Research by the Organization for Economic Co-operation and Development has largely confirmed these results.2 Part 2: Why Income Inequality Matters to Canadian Physicians The issue of income inequality is an important one for Canada's physicians. As physicians, we are not the experts in housing, in early childhood development, income equality and so on. But we are the experts in recognizing the impact of these factors on the health of our patients. Hundreds of research papers have confirmed that people in the lowest socio-economic groups carry the greatest burden of illness.3 In 2001, people in the neighbourhoods with the highest 20% income lived about three years longer than those in the poorest 20% neighbourhoods.4 Mental health is affected as well. Suicide rates in the lowest income neighbourhoods are almost twice as high as in the wealthiest neighbourhoods.5 Studies suggest that adverse socio-economic conditions in childhood can be a greater predictor of cardiovascular disease and diabetes in adults than later life circumstances and behavioural choices.6 Finally, the countries reporting the highest population health status are those with the greatest income equality, not the greatest wealth.7 These differences in health outcomes have an impact on the health care system. Most major diseases including heart disease and mental illness follow a social gradient with those in lowest socio-economic groups having the greatest burden of illness.8 Those within the lowest socio-economic status groups are 1.4 times more likely to have a chronic disease, and 1.9 times more likely to be hospitalized for care of that disease.9 Income plays a role in access to appropriate health care as well. Individuals living in lower income neighbourhoods, younger adults and men are less likely to have primary care physicians than their counterparts.10 Women and men from low-income neighbourhoods are more likely to report difficulties making appointments with their family doctors for urgent non-emergent health problems. They were also more likely to report unmet health care needs.11 People with lower socio-economic status are more likely to be hospitalized for ambulatory care sensitive conditions and mental health12, admissions which could potentially be avoided with appropriate primary care.13 Those with higher socio-economic status are more likely to have access to and utilize specialist services.14 Utilization of diagnostic imaging services is greater among those in higher socio-economic groups.15 Access to preventive and screening programs such as pap smears and mammography are lower among disadvantaged groups.16 It is not just access to insured services that is a problem. Researchers have reported that those in the lowest income groups are three times less likely to fill prescriptions, and 60% less able to get needed tests because of cost.17 Services such as physiotherapy and occupational therapy to name two are often not covered unless they are provided in-hospital or to people on certain disability support programs.18 Access to psychologists is largely limited to people who can pay for them, through private insurance or out of their own pockets.19 Similar access challenges exist for long-term care, home care and end-of-life care. There is a financial cost to this disparity. According to a 2011 report, low-income residents in Saskatoon alone consume an additional $179 million in health care costs than middle income earners.20 A 2010 study by CIHI found increased costs for avoidable hospitalizations for ambulatory care sensitive conditions were $89 million for males and $71 million for females with an additional $248 million in extra costs related to excess hospitalizations for mental health reasons.21 The societal cost of poor health extends beyond the cost to the health care system: healthier people lose fewer days of work and contribute to overall economic productivity.22 According to data in the U.K., those living in the most disadvantaged neighbourhoods experience almost 20 years less disability-free life than those in the highest income neighbourhoods. These individuals will become disabled before they are eligible for old age services, striking two blows to the economy: they will no longer be able to contribute through productive work, and their disability will consume a great deal of health care services.23 The reasons for this inequitable access are multifaceted and include patient specific barriers as well as challenges within the health care system itself. CMA recognizes the need for physicians to work to address the system related barriers. However, one of the biggest challenges for patients themselves remains economic. Having a low-income can prevent access through lack of transportation options, an inability to get time off work, and the inability to pay for services that are not covered by government insurance. Health equity is increasingly recognized as a necessary means by which we will make gains in the health status of all Canadians and retain a sustainable publicly funded health care system. Addressing inequalities in health is a pillar of CMA's Health Care Transformation initiative. Part 3: Ensuring adequate income for all Canadians "The rates of family and child poverty are unacceptably high taking into account Canada's high quality of living standard." 2010 Report of the Committee on Human Resources, Skills and Social Development and the Status of Persons with Disability One reason income is so critical to individual health is that it is so closely linked to many of the other social determinants of health. These include but are not limited to: education, employment, early childhood development, housing, social exclusion, and physical environment. The CMA and its members are concerned that adequate consideration during the decision-making process is not being given to the social and economic determinants of health, factors such as income and housing that have a major impact on health outcomes. Recent decisions such as changes to the qualifying age for Old Age Security, and new rules for Employment Insurance, among others, will have far reaching consequences on the income of individuals, especially those in vulnerable populations. We remind the government that every action that has a negative effect on health will lead to more costs to society down the road. One method to ensure that these unintentional consequences do not occur is to consider the health impact of decisions as part of the policy development and decision-making process. A Health Impact Assessment (HIA) is a systematic process for making evidence-based judgments on the health impacts of any given policy and to identify and recommend strategies to protect and promote health. The HIA is used in several countries, including Australia, New Zealand, the United Kingdom, and increasingly the United States. The HIA can ensure that government departments consider the health impacts of their policies and programs by anticipating possible unintended consequences and taking appropriate corrective action. The use of HIA will allow the federal government to demonstrate leadership in health care in Canada and provide greater accountability to all Canadians. The CMA recommends that: 1. The federal government recognize the importance of the social and economic determinants of health to the health of Canadians and the demands on the health care system; and 2. The federal government requires a health impact assessment as part of Cabinet decision-making. We are hearing about the need to address the poverty and income security of Canadians from stakeholders across the country. We have conducted a series of town halls with Canadians asking them questions about how the social and economic conditions of their communities affect their health. From Winnipeg, to Hamilton to Charlottetown we have heard how poverty and a lack of income is undermining Canadians' health. This public response is not surprising. According to the Conference Board of Canada, more than one in seven children in Canada live in poverty.24 This poverty will severely limit the ability of these children to achieve good health in the future. There are systemic barriers that contribute to this poverty. The annual welfare income in Canada varies between $3,247 for a single person to $21,213 for a couple with two children. The 'best' of Canadian programs provides an income within only 80% of the poverty line. The lowest income is barely 30% of that needed to 'achieve' poverty.25 It is not just people on social assistance, however, that are facing poverty. Data from 2008 indicates that one in three (33%) of children living in poverty had a parent that was employed. Based a review conducted in 2010, one in 10 workers still earned less than $10 an hour in 2009, with 19% paid less than $12. The same study found that roughly 400,000 full-time adult workers, aged 25+, were making less than $10/hr. and therefore paid less than poverty line wages.26 Some physicians are working directly with patients to try and address the income inadequacy which is undermining their health. Physicians from Health Providers Against Poverty in Ontario have developed a tool for physicians to use in screening their patients for poverty and linking them with provincial/territorial and/or federal programs that might help mitigate the health effects of their poverty. This group is also involved in training health care providers to support this work. While this program and others like it are serving as a 'band aid' solution for some living in poverty, the CMA feels that physicians and their patients should not be placed in this position. As part of its study on income inequality, the CMA encourages the Finance Committee to review two recent reports from Parliamentary committees on the same topic. The first and most recent is the report of the House of Commons Committee on Human Resources, Skills and Social Development and the Status of Persons with Disability, Federal Poverty Reduction Plan: Working in Partnership Towards Reducing Poverty in Canada.27 The second is the report of the Senate Committee on Social Affairs, Science and Technology In From the Margins: A Call to Action on Poverty, Housing and Homelessness.28 The Committee on Human Resources, Skills and Social Development and the Status of Persons with Disability, noted that the federal government's efforts to address poverty among Canadian seniors "is generally recognized as one of Canada's most notable achievements of the past 30 years." The report of the Senate Committee made a number of significant observations, two bear repeating: * "[W]hen all the programs are working, when the individual gets all possible income and social supports, the resulting income too often still maintains people in poverty, rather than lifting them into a life of full participation in the economic and social life of their communities." * "[A]t their worst, the existing policies and programs entrap people in poverty, creating unintended perverse effects which make it virtually impossible for too many people to escape reliance on income security programs and even homeless shelters." The public policy debate on addressing income inequality in Canada is not new. For instance, the 1971 report of the Special Senate Committee on Poverty recommended that a guaranteed annual income financed and administered by the federal government be established. In consideration of this concept, from 1974 to 1979, the Governments of Canada and Manitoba funded the Manitoba Basic Guarantee Annual Income Experiment (referred to as "Mincome"). While this was initially designed to be a labour market study, the results were also relevant from a health perspective. A recent study of this data concluded that hospitalizations declined by 8.5 per cent for the Mincome subjects.29 The CMA recommends that: 3. The federal government gives top priority to the development of strategies to minimize poverty in Canada. Part 4: Addressing access barriers in the health sector Access to services not covered by provincial health plans remain a large barrier for Canadians. Those with low incomes are less likely to be able to access needed pharmaceuticals and services due to this barrier. One in 10 Canadians can not afford the medications that they are prescribed.30 This further exacerbates the income inequality that exists. While we urge the federal government to take action on reducing poverty among Canadians, at the minimum action needs to be taken to ensure universal access to needed medical care. The CMA recommends that: 4. Governments, in consultation with the life and health insurance industry and the public, establish a program of comprehensive prescription drug coverage to be administered through reimbursement of provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drug therapies; 5. Governments examine methods to ensure that low-income Canadians have greater access to needed medical interventions such as rehabilitation services, mental health, home care, and end-of-life care; and 6. Governments explore options to provide funding for long-term care services for all Canadians. This could include public insurance schemes or registered savings plans allowing Canadians to save for their future long-term care needs. Finally, there is a need to recognize the effect on income related to providing care to family members who are ill. Many Canadians take time off work to care for their children or parents. Without adequate long-term care resources and supports for home care, Canadians may be forced to take a leave from the workforce to provide this unpaid care. Research suggests that more than one third of parents (38.4%) who care for children with a disability are required to work fewer hours to care for their children.31 While the 2011 federal budget provided some relief in the form of a Family Caregiver Tax Credit of up to $300, it is not enough. A 2004 Canadian study placed the value of a caregiver's time at market rates from $5,221 to $13,374 depending on the community of residence.32 This is a significant amount of unpaid work and may further add to income inequalities. Expanding the tax credit available to these individuals would help but there is a need to provide further supports to family caregivers. The CMA recommends that: 7. The federal government expands the relief programs for informal caregivers to provide guaranteed access to respite services for people dealing with emergency situations, as well as increase the Family Caregiver Tax Credit to better reflect the annual cost of family caregivers' time at market rates. Part 5: Conclusion Once again, we commend the Standing Committee on Finance for agreeing to study this important issue. Canada's physicians see the examples of income inequality in their practices on a daily basis. Tackling this important social issue will contribute to not only reducing the burden of disease in Canada but to providing Canadians with the necessary financial resources to achieve good health. Summary of Recommendations Recommendation 1 The federal government recognizes the importance of the social and economic determinants of health to the health of Canadians and the demands on the health care system Recommendation 2 The federal government requires a health impact assessment as part of Cabinet decision-making. Recommendation 3 The federal government gives top priority to the development of strategies to minimize poverty in Canada. Recommendation 4 Governments, in consultation with the life and health insurance industry and the public, establish a program of comprehensive prescription drug coverage to be administered through reimbursement of provincial/territorial and private prescription drug plans to ensure that all Canadians have access to medically necessary drug therapies. Recommendation 5 Governments examine methods to ensure that low-income Canadians have greater access to needed medical interventions such as rehabilitation services, mental health, home care, and end-of-life care; and Recommendation 6 Governments explore options to provide funding for long-term care services for all Canadians. This could include public insurance schemes or registered savings plans allowing Canadians to save for their future long-term care needs. Recommendation 7 The federal government expand the relief programs for informal caregivers to provide guaranteed access to respite services for people dealing with emergency situations, as well as increase the Family Caregiver Tax Credit to better reflect the annual cost of family caregivers' time at market rates. References 1 Conference Board of Canada. How Canada Performs: Income Inequality. Ottawa (ON); 2013. Available: http://www.conferenceboard.ca/hcp/details/society/income-inequality.aspx (accessed 2013 Apr 11). 2 Organisation for Economic Co-operation and Development. Divided We Stand: Why Inequality Keeps Rising: An Overview of Growing Income Inequalities in OECD Countries: Main Findings. Paris (FR); 2011. Available: http://www.oecd.org/els/soc/49499779.pdf (accessed 2013 Apr 11). 3 Dunn JR. The Health Determinants Partnership Making Connections Project: Are Widening Income Inequalities Making Canada Less Healthy? Toronto (ON); 2002. Available: http://www.opha.on.ca/our_voice/collaborations/makeconnxn/HDP-proj-full.pdf (accessed 2011 March 15) 4 Wilkins R, Berthelot JM and Ng E. Trends in Mortality by Neighbourhood Income in Urban Canada from 1971 to 1996. Statistics Canada, Ottawa (ON); 2002. Health Reports 13 [Supplement]: pp. 45-71 5 Marmot, M. Fair Society Healthy Lives: The Marmot Review: Executive Summary. London (UK): 2010. Available: http://www.marmotreview.org/AssetLibrary/pdfs/Reports/FairSocietyHealthyLivesExecSummary.pdf (accessed 2011 Jan 25); Mikkonen J, Raphael D. Social Determinants of Health: The Canadian Facts. Toronto (ON); 2010. Available: http://www.thecanadianfacts.org/The_Canadian_Facts.pdf (accessed 2011 Jan 14) 6 Raphael D. Addressing The Social Determinants of Health In Canada: Bridging The Gap Between Research Findings and Public Policy. Policy Options. March 2003 pp.35-40. 7 Hofrichter R ed. Tackling Health Inequities Through Public Health Practice: A Handbook for Action. The National Association of County and City Health Officials & The Ingham County Health Department. Lansing (USA); 2006. Available: http://www.acphd.org/axbycz/admin/datareports/ood_naccho_handbook.pdf accessed (2012 Mar 16). 8 Dunn, James R. (2002) The Health Determinants Partnership... 9 Canadian Population Health Initiative. Disparities in Primary Health Care Experiences Among Canadians with Ambulatory Care Sensitive Conditions. Canadian Institute for Health Information, Ottawa (ON); 2012. Available: http://secure.cihi.ca/cihiweb/products/PHC_Experiences_AiB2012_E.pdf(accessed 2012 Jan 25). 10 Bierman AS, Angus J, Ahmad F, et al. Ontario Women's Health Equity Report : Access to Health Care Services : Chapter 7. Toronto (ON) Project for and Ontario Women's Health Evidence-Based Report; 2010. Available: http://powerstudy.ca/wp-content/uploads/downloads/2012/10/Chapter7-AccesstoHealthCareServices.pdf (accessed 2012 Dec 10). 11 Bierman AS, Johns A, Hyndman B, et al. Ontario Women's Health Equity Report: Social Determinants of Health & Populations at Risk: Chapter 12. Toronto (ON) Project for and Ontario Women's Health Evidence-Based Report; 2010. Available: http://powerstudy.ca/wp-content/uploads/downloads/2012/10/Chapter12-SDOHandPopsatRisk.pdf (accessed 2012 Dec 10...; Williamson DL, Stewart MJ, Hayward K. Low-income Canadians' experiences with health-related services: Implications for health care reform. Health Policy 2006; 76:106-121. 12 Canadian Institute for Health Information. Hospitalization Disparities by Socio-Economic Status for Males and Females. Ottawa(ON); 2010. Available: https://secure.cihi.ca/free_products/disparities_in_hospitalization_by_sex2010_e.pdf (accessed 2013 Feb 6) 13 Canadian Institute for Health Information. Hospitalization Disparities by Socio-Economic Status...;Roos LL, Walld R, Uhanova J, et al. Physician Visits, Hospitalizations, and Socioeconomic Status: Ambulatory Care Sensitive Conditions in a Canadian Setting. HSR 2005; 40(4): 1167-1185. 14 Allin S. Does Equity in Healthcare Use Vary across Canadian Provinces? Healthc Policy 2008; 3(4): 83-99.;Frolich N, Fransoo R, Roos N. Health Service Use in the Winnipeg Regional Health Authority: Variations Across Areas in Relation to Health and Socioeconomic status. Winnipeg (MB) Manitoba Centre for Health Policy. Available: http://mchp-appserv.cpe.umanitoba.ca/teaching/pdfs/hcm_forum_nf.pdf (accessed 2013 Feb 6); McGrail K. Income-related inequities: Cross-sectional analyses of the use of medicare services in British Columbia in 1992 and 2002. Open Medicine 2008; 2(4): E3-10; Van Doorslaer E, Masseria C. Income-Related Inequality in the Use of Medical Care in 21 OECD Countries. Paris(FR) OECD; 2004. Available: http://www.oecd.org/els/health-systems/31743034.pdf (accessed 2013 Feb 6).;Veugelers PJ, Yip AM. Socioeconomic disparities in health care use: Does universal coverage reduce inequalities in health? J Epidemiol Community Health 2003; 57:424-428. 15 Bierman AS, Angus J, Ahmad F, et al. Ontario Women's Health Equity Report : Access to Health Care Services...Demeter S, Reed M, Lix L, et al. Socioeconomic status and the utilization of diagnostic imaging in an urban setting. CMAJ 2005; 173(10): 1173-1177. 16 Bierman AS, Johns A, Hyndman B, et al. Ontario Women's Health Equity Report: Social Determinants of Health & Populations at Risk: Chapter 12...); Frolich N, Fransoo R, Roos N. Health Service Use in the Winnipeg... Wang L, Nie JX, Ross EG. Determining use of preventive health care in Ontario. Can Fam Physician 2009; 55: 178-179.e1-5; Williamson DL, Stewart MJ, Hayward K. Low-income Canadians' experiences with health-related services... 17 Mikkonen J, Raphael D. Social Determinants of Health: The Canadian Facts.... 18 Barnes S, Dolan LA, Gardner B, et al. Equitable Access to Rehabilitation : Realizing Potential, Promising Practices, and Policy Directions. Toronto (ON) Wellesley Institute; 2012. Available : http://www.wellesleyinstitute.com/wp-content/uploads/2012/06/Equitable-Access-to-Rehabilitation-Discussion-Paper1.pdf (accessed 2013 Feb 6). 19 Kirby M, Goldbloom D, Bradley L. Changing Directions, Changing Lives: The Mental Health Strategy for Canada.Ottawa (ON): Mental Health Commission of Canada; 2012. Available: http://strategy.mentalhealthcommission.ca/pdf/strategy-text-en.pdf (accessed 2013 Mar 12). 20 Saskatoon Poverty Reduction Partnership. From poverty to possibility...and prosperity: A Preview to the Saskatoon Community Action Plan to Reduce Poverty. Saskatoon (SK): Saskatoon Poverty Reduction Partnership; 2011.Available: http://www.saskatoonpoverty2possibility.ca/pdf/SPRP%20Possibilities%20Doc_Nov%202011.pdf (accessed 2012 Mar 13) 21 Canadian Institute for Health Information. Hospitalization Disparities by Socio-economic status... 22 Munro D. Healthy People, Healthy Performance, Healthy Profits: The Case for Business Action on the Socio-Economic Determinants of Health. The Conference Board of Canada, Ottawa (ON); 2008. Available: http://www.conferenceboard.ca/Libraries/NETWORK_PUBLIC/dec2008_report_healthypeople.sflb (accessed 2012 Mar 26). 23 Marmot Sir M. Achieving Improvements in Health in a Changing Environment. Presentation to the World Medical Association, Vancouver (BC); 2010. 24 Conference Board of Canada. How Canada Performs: Child Poverty. Ottawa (ON); 2013. Available: http://www.conferenceboard.ca/hcp/details/society/child-poverty.aspx (accessed 2013 Apr 11). 25 National Council of Welfare. Poverty Trends in Canada: Solving Poverty Information Kit. Her Majesty the Queen in the Right of Canada. Ottawa (ON); 2007. Available: http://www.ncw.gc.ca/l.3bd.2t.1ils@-eng.jsp?lid=140 (accessed 2012 Jan 25). 26 Campaign 2000. 2010 Report Card on Child and Family Poverty in Canada: 1989 - 2010. Toronto (ON); 2010. Available: http://www.campaign2000.ca/reportCards/national/2010EnglishC2000NationalReportCard.pdf (accessed 2013 Apr 11). 27 Hoeppner C, Chair. Federal Poverty Reduction Plan: Working in Partnership Towards Reducing Poverty in Canada. House of Commons Canada. Ottawa (ON); 2010. Available: http://www.parl.gc.ca/content/hoc/Committee/403/HUMA/Reports/RP4770921/humarp07/humarp07-e.pdf (accessed 2013 Apr 17). 28 Eggleton A, Segal H. In From the Margins: A Call TO Action On Poverty, Housing and Homelessness. The Standing Senate Committee on Social Affairs, Science and Technology. Ottawa(ON);2009. Available: http://www.parl.gc.ca/Content/SEN/Committee/402/citi/rep/rep02dec09-e.pdf (accessed 2013 Apr 17). 29 Forget, Evelyn L. The town with no poverty: the health effects of a Canadian Guaranteed Annual Income Field Experiment. University of Toronto Press. Canadian Public Policy 37(3), 283-305. 30 Law MR, Cheng L, Dhala IA et al. The effect of cost adherence to prescription medications in Canada. CMAJ February 21, 2012 vol. 184 no.3. 31 Campaign 2000. 2010 Report Card on Child and Family Poverty... 32 Chappell NL, Dlitt BH, Hollander JA et al. Comparative Costs of Home Care and Residential Care. The Gerontologist 44(3): 389-400.
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CMA Pre-budget Submission

https://policybase.cma.ca/en/permalink/policy14259
Date
2020-08-07
Topics
Physician practice/ compensation/ forms
Health information and e-health
Health care and patient safety
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2020-08-07
Topics
Physician practice/ compensation/ forms
Health information and e-health
Health care and patient safety
Health systems, system funding and performance
Text
RECOMMENDATION 1 That the government create a one-time Health Care and Innovation Fund to resume health care services, bolster public health capacity and expand primary care teams, allowing Canadians wide-ranging access to health care. RECOMMENDATION 2 That the government recognize and support the continued adoption of virtual care and address the inequitable access to digital health services by creating a Digi-Health Knowledge Bank and by expediting broadband access to all Canadians. RECOMMENDATION 3 That the government act on our collective learned lessons regarding our approach to seniors care and create a national demographic top-up to the Canada Health Transfer and establish a Seniors Care Benefit. RECOMMENDATION 4 That the government recognize the unique risks and financial burden experienced by physicians and front line health care workers by implementing the Frontline Gratitude Tax Deduction, by extending eligibility of the Memorial Grant and by addressing remaining administrative barriers to physician practices accessing critical federal economic relief programs. RECOMMENDATIONS 3 Five months ago COVID-19 hit our shores. We were unprepared and unprotected. We were fallible and vulnerable. But, we responded swiftly.
The federal government initiated Canadians into a new routine rooted in public health guidance.
It struggled to outfit the front line workers. It anchored quick measures to ensure some financial stability.
Canadians tuned in to daily updates on the health crisis and the battle against its wrath.
Together, we flattened the curve… For now. We have experienced the impact of the first wave of the pandemic. The initial wake has left Canadians, and those who care for them, feeling the insecurities in our health care system. While the economy is opening in varied phases – an exhaustive list including patios, stores, office spaces, and schools – the health care system that struggled to care for those most impacted by the pandemic remains feeble, susceptible not only to the insurgence of the virus, but ill-prepared to equally defend the daily health needs of our citizens. The window to maintain momentum and to accelerate solutions to existing systemic ailments that have challenged us for years is short. We cannot allow it to pass. The urgency is written on the faces of tomorrow’s patients. Before the onset of the pandemic, the government announced intentions to ensure all Canadians would be able to access a primary care family doctor. We knew then that the health care system was failing. The pandemic has highlighted the criticality of these recommendations brought forward by the Canadian Medical Association. They bolster our collective efforts to ensure that Canadians get timely access to the care and services they need. Too many patients are succumbing to the gaps in our abilities to care for them. Patients have signaled their thirst for a model of virtual care. The magnitude of our failure to meet the needs of our aging population is now blindingly obvious. Many of the front line health care workers, the very individuals who put themselves and their families at risk to care for the nation, are being stretched to the breaking point to compensate for a crumbling system. The health of the country’s economy cannot exist without the health of Canadians. INTRODUCTION 4 Long wait times have strangled our nation’s health care system for too long. It was chronic before COVID-19. Now, for far too many, it has turned tragic. At the beginning of the pandemic, a significant proportion of health care services came to a halt. As health services are resuming, health care systems are left to grapple with a significant spike in wait times. Facilities will need to adopt new guidance to adhere to physical distancing, increasing staff levels, and planning and executing infrastructure changes. Canada’s already financially atrophied health systems will face significant funding challenges at a time when provincial/territorial governments are concerned with resuscitating economies. The CMA is strongly supportive of new federal funding to ensure Canada’s health systems are resourced to meet the care needs of Canadians as the pandemic and life continues. We need to invigorate our health care system’s fitness to ensure that all Canadians are confident that it can and will serve them. Creating a new Health Care and Innovation Fund would focus on resuming the health care system, addressing the backlog, and bringing primary care, the backbone of our health care system, back to centre stage. The CMA will provide the budget costing in follow-up as an addendum to this submission. RECOMMENDATION 1 Creating a one-time Health Care and Innovation Fund 5 It took a global pandemic to accelerate a digital economy and spark a digital health revolution in Canada. In our efforts to seek medical advice while in isolation, Canadians prompted a punctuated shift in how we can access care, regardless of our location or socio-economic situation. We redefined the need for virtual care. During the pandemic, nearly half of Canadians have used virtual care. An incredible 91% were satisfied with their experience. The CMA has learned that 43% of Canadians would prefer that their first point of medical contact be virtual. The CMA welcomes the $240 million federal investment in virtual care and encourages the government to ensure it is linked to a model that ensures equitable access. A gaping deficit remains in using virtual care. Recently the CMA, the Royal College of Physicians and Surgeons of Canada and the College of Family Physicians of Canada established a Virtual Care Task Force to identify digital opportunities to improve health care delivery, including what regulatory changes are required across provincial/territorial boundaries. To take full advantage of digital health capabilities, it will be essential for the entire population, to have a functional level of digital health literacy and access to the internet. The continued adoption of virtual care is reliant on our ability to educate patients on how to access it. It will be further contingent on consistent and equitable access to broadband internet service. Create a Digi-Health Knowledge Bank Virtual care can’t just happen. It requires knowledge on how to access and effectively deliver it, from patients and health care providers respectively. It is crucial to understand and promote digital health literacy across Canada. What the federal government has done for financial literacy, with the appointment of the Financial Literacy Leader within the Financial Consumer Agency of Canada, can serve as a template for digital health literacy. We recommend that the federal government establish a Digi-Health Knowledge Bank to develop indicators and measure the digital health of Canadians, create tools patients and health care providers can use to enhance digital health literacy, continually monitor the changing digital divide that exists among some population segments. Pan-Canadian broadband expansion It is critical to bridge the broadband divide by ensuring all those in Canada have equitable access to affordable, reliable and sustainable internet connectivity. Those in rural, remote, Northern and Indigenous communities are presently seriously disadvantaged in this way. With the rise in virtual care, a lack of access to broadband exacerbates inequalities in access to care. This issue needs to be expedited before we can have pride in any other achievement. RECOMMENDATION 2 Embedding virtual care in our nation’s health care system 6 Some groups have been disproportionately affected by the COVID-19 crisis. Woefully inadequate care of seniors and residents of long-term care homes has left a shameful and intensely painful mark on our record. Our health care system has failed to meet the needs of our aging population for too long. The following two recommendations, combined with a focus on improving access to health care services, will make a critical difference for Canadian seniors. A demographic top-up to the Canada Health Transfer The Canada Health Transfer (CHT) is the single largest federal transfer to the provinces and territories. It is critical in supporting provincial and territorial health programs in Canada. As an equal per-capita-based transfer, it does not currently address the imbalance in population segments like seniors. The CMA, hand-in-hand with the Organizations for Health Action (HEAL), recommends that a demographic top-up be transferred to provinces and territories based on the projected increase in health care spending associated with an aging population, with the federal contribution set to the current share of the CHT as a percentage of provincial-territorial health spending. A top-up has been calculated at 1.7 billion for 2021. Additional funding would be worth a total of $21.1 billion to the provinces and territories over the next decade. Seniors care benefit Rising out-of-pocket expenses associated with seniors care could extend from 9 billion to 23 billion by 2035. A Seniors Care Benefits program would directly support seniors and those who care for them. Like the Child Care Benefit program, it would offset the high out-of-pocket health costs that burden caregivers and patients. RECOMMENDATION 3 Ensuring that better care is secured for our seniors 7 The federal government has made great strides to mitigate the health and economic impacts of COVID-19. Amidst the task of providing stability, there has been a grand oversight: measures to support our front line health care workers and their financial burden have fallen short. The CMA recommends the following measures: 1. Despite the significant contribution of physicians’ offices to Canada’s GDP, many physician practices have not been eligible for critical economic programs. The CMA welcomes the remedies implemented by Bill C-20 and recommends the federal government address remaining administrative barriers to physicians accessing federal economic relief program. 2. We recommend that the government implement the Frontline Gratitude Tax Deduction, an income tax deduction for frontline health care workers put at risk during the COVID-19 pandemic. In person patient care providers would be eligible to deduct a predetermined amount against income earned during the pandemic. The Canadian Armed Forces already employs this model for its members serving in hazardous missions. 3. It is a devastating reality that front line health care workers have died as a result of COVID-19. Extending eligibility for the Memorial Grant to families of front line health care workers who mourn the loss of a family member because of COVID-19, as a direct result of responding to the pandemic or as a result of an occupational illness or psychological impairment related to their work will relieve any unnecessary additional hardship experienced. The same grant should extend to cases in which their work contributes to the death of a family member. RECOMMENDATION 4 Cementing financial stabilization measures for our front line health care workers 8 Those impacted by COVID-19 deserve our care. The health of our nation’s economy is contingent on the health standards for its people. We must assert the right to decent quality of life for those who are most vulnerable: those whose incomes have been dramatically impacted by the pandemic, those living in poverty, those living in marginalized communities, and those doubly plagued by experiencing racism and the pandemic. We are not speaking solely for physicians. This is about equitable care for every Canadian impacted by the pandemic. Public awareness and support have never been stronger. We are not facing the end of the pandemic; we are confronting an ebb in our journey. Hope and optimism will remain elusive until we can be confident in our health care system. CONCLUSION
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CMA’s Response to CRA’s Questions, Public consultation on the Disability Tax Credit Promoters Restrictions Act regulations

https://policybase.cma.ca/en/permalink/policy14027
Date
2015-05-15
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2015-05-15
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
Text
The Canadian Medical Association (CMA) is pleased to provide the information below in response to questions by the Canada Revenue Agency (CRA) for consideration as part of the development of regulations following the enactment of the Disability Tax Credit Promoters Restriction Act. This information is in follow up to CMA’s submission to the CRA dated December 19, 2014, attached for reference. As explained in the CMA’s submission attached, the CMA strongly encourages the CRA to include an exemption for “a health care practitioner duly licensed under the applicable regulatory authority who provides health care and treatment” from the reporting requirements in the forthcoming regulations enabled by the Disability Tax Credit Promoters Restriction Act. This exemption is necessary to ensure CRA does not impose duplicative regulatory oversight of the medical profession, specific to the provision of this uninsured service. As fully explained in the CMA’s brief, this exemption would not introduce a potential “loophole”. Issue 1: Organizations Responsible for Physician Regulatory Oversight The statutory authority for the regulatory oversight of physicians rests with the provincial and territorial medical regulatory colleges. As explained on page 4 of the CMA’s submission, medical regulatory colleges have statutory, comprehensive regulatory authority of physicians; this authority captures: medical licensure, governing standards of practice, professional oversight, and disciplinary proceedings. Included in this authority is broad regulatory oversight for fees that physicians may charge for uninsured services, which would capture the fee charged for the Disability Tax Credit form. The Federation of Medical Regulatory Authorities of Canada (FMRAC) is the umbrella organization representing provincial and territorial medical regulatory authorities in Canada and can address how best to contact individual regulatory colleges.1 Issue 2: CMA’s Code of Ethics In addition to policies, guidance and oversight by provincial and territorial regulatory colleges, charging a fee associated with the delivery of an uninsured service, in this case a fee associated with completing the form associated with the Disability Tax Credit, is captured by Section 16 of the CMA’s Code of Ethics. Section 16 states: “In determining professional fees to patients for non-insured services, consider both the nature of the service provided and the ability of the patient to pay, and be prepared to discuss the fee with the patient.”2 Issue 3: Fee Structure for Uninsured Services As the CRA does not provide remuneration to physicians for the completion of the Disability Tax Credit form, the delivery of this service by physicians is an uninsured service. As an uninsured service there is no set fee level. While provincial and territorial medical associations Canadian Medical Association 3 May 15, 2015 may provide guidance to physicians within their jurisdiction on uninsured services, which may be referenced in policies by regulatory colleges, this guidance does not constitute a set fee schedule. As captured in the CMA’s Code of Ethics referenced above, physicians may consider patient-specific and other factors in determining a fee for the delivery of an uninsured service. The CMA encourages CRA to review relevant policies and guidance of individual provincial and territorial regulatory colleges for a comprehensive understanding of the oversight of uninsured services. Closing Once again, the CMA appreciates the opportunity to provide further information to support the development of regulations to enable the new authorities of the Disability Tax Credit Promoters Restriction Act and to ensure that CRA does not impose redundant and duplicative regulatory oversight of the medical profession. 1 FMRAC’s Executive Director is Dr. Fleur-Ange Lefebvre and can be reached at falefebvre@fmrac.ca 2 CMA’s Code of Ethics may be accessed here: https://www.cma.ca/Assets/assetslibrary/ document/en/advocacy/policyresearch/ CMA_Policy_Code_of_ethics_of_the_Canadian_Medical_Association_Update_2004_PD04-06-e.pdf
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CMA's Submission to Finance Canada regarding proposed amendments to the Income Tax Act

https://policybase.cma.ca/en/permalink/policy10353
Date
2012-02-14
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2012-02-14
Topics
Physician practice/ compensation/ forms
Text
As previously indicated in the Retirement Income Improvement Coalition's (RIIC) letter to the Minister of Finance on August 10, 2011, the CMA supports the federal government's proposal to expand access to pensions, specifically by establishing a legislative and regulatory framework to permit pooled registered retirement plans (PRPPs). The CMA is concerned that as currently proposed, the PRPP framework, including Bill C-25 and the proposed legislative amendments to the Income Tax Act, would limit the potential for PRPPs to contribute to expanding access to, and investment in, pensions for self-employed individuals. With respect to the pension framework, a critical issue, two principles are central to the CMA's membership of over 76,000 physicians. These are, to encourage the federal government to: 1) ensure that self-employed Canadians can retire with an appropriate level of retirement income (e.g., a 70% of pre-retirement income target); and, 2) expand the retirement savings options that are available to self-employed Canadians. The CMA's comments herein on the proposed amendments to the Income Tax Act are in support of these two principles. As elaborated below, the CMA encourages the federal government to: 1. Increase the retirement savings capacity of self-employed individuals by raising the combined limit for RRSPs; 2. Expand the PRPP framework to include defined benefit and targeted benefit pension plans; and, 3. Clarify the eligibility criteria of "PRPP administrators" to include professional associations. 1. Increase the combined contribution limit for PRPPs and RRSPs As proposed, it is our understanding that the core benefit of the PRPP framework is in providing smaller businesses access to low-cost pension plans, thereby providing a vehicle to encourage employers to establish, and contribute to, pensions for their employees. While the CMA recognizes the value of, and supports, this objective, this proposal in effect maintains the status quo for self-employed individuals. Under Clause 10 of the proposed amendments to the Income Tax Act, the contribution limit to PRPPs would be calculated as an additional component of the current registered retirement savings plan (RRSP) contribution limit. As outlined in the Explanatory Notes, "an employer's contributions to an individual's PRPP account [and...] an individual's PRPP contributions in a taxation year will immediately reduce the individual's ability to make deductible RRSP contributions in that same year." While individuals with employer contributions stand to benefit from increased retirement savings via employer contributions, self-employed individuals are merely provided with access to an alternate retirement savings vehicle. As explained in the Summary Report on Retirement Income Adequacy Researchi, "[h]igher income groups tend to exhibit a greater tendency to substitute one form of saving for another since they tend to be bound by limits...[I]f newly introduced plans are included in limitations imposed on the degree to which contributions may be deductible for tax purposes, saving may not increase for individuals who are constrained (i.e. saving up to their limit), since they would more likely substitute one type of saving for another (e.g., RRSP for a private pension plan)." Therefore, the CMA encourages the federal government to consider increasing the retirement savings capacity of self-employed individuals by raising the combined limit for RRSPs and PRPPs. 2. Include defined benefit and targeted benefit pension plans As noted under Clause 12, the registration criteria for PRPPs will be established by the PRPP Act, Bill C-25. Of concern, Bill C-25 limits PRPPs to defined contribution pension plans by specifically excluding from eligibility of registration: (a) a pension plan as defined by 2(1) of the Pension Benefits Standards Act; (b) an employees' or a deferred profit sharing plan; (c) an RRSP or a retirement compensation arrangement defined by 248(1) of the Income Tax Act; and, (d) any other prescribed plan or arrangement. As highlighted by the Summary Report on Retirement Income Adequacy Research, "defined benefit pension funds and annuities enable investors to share longevity risks as well as pool risky investments to diversify risk." By pooling risk, defined benefit and targeted benefit pension plans provide more secure savings vehicles than defined contributions plans. The CMA encourages the federal government to expand the PRPP framework to include defined benefit and targeted benefit pension plans. While the CMA will advance this recommendation to the House of Commons Finance Committee during its consultation on Bill C-25, we include it as part of this submission as modifications to the proposed amendments to the Income Tax Act would be required. 3. Clarify the eligibility criteria of "PRPP administrators" to include professional associations Further clarification is required on the type of organization that may qualify as a PRPP administrator. As noted under Clause 12, an administrator of a PRPP is authorized under the PRPP Act. As Bill C-25, the PRPP Act, is still in the legislative process, the CMA will elaborate on this issue during the formal Parliamentary consultation. However, as it stands, further clarification is required on the eligibility criteria proposed by Bill C-25. While Bill C-25 can be interpreted to extend administrator eligibility to organizations that are able to fulfill the criteria established by the PRPP Act, Finance Canada's Framework for PRPPs states that eligibility of administrators would be limited to "regulated financial institutions that are capable of taking on a fiduciary role". Well-governed professional organizations that represent a particular membership should be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. Conclusion While the CMA supports the proposed PRPP framework in principle, the proposed limitations to PRPPs should be addressed to ensure that they also provide value to self-employed Canadians, including physicians. The CMA appreciates the opportunity to comment on the proposed amendments to the Income Tax Act and to once again advance recommendations to Finance Canada on the PRPP framework. i Prepared for the Research Working Group on Retirement Income Adequacy of Federal-Provincial-Territorial Ministers of Finance.
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CMA's Submission to the House of Commons Standing Committee on Finance: Amending Bill C-25 to expand the PRPP framework to provide value to self-employed Canadians

https://policybase.cma.ca/en/permalink/policy10355
Date
2012-02-24
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2012-02-24
Topics
Physician practice/ compensation/ forms
Text
The Canadian Medical Association (CMA) supports the Government of Canada's efforts to improve Canada's retirement income system, specifically by establishing a legislative framework to permit pooled registered pension plans (PRPPs) as proposed in Bill C-25, the PRPP Act. The CMA has long supported the Government of Canada's efforts to expand access to pensions, including by permitting PRPPs. However, the CMA is concerned that as currently proposed, Bill C-25 limits the potential for PRPPs to expand the access to, and investment in, pensions of self-employed individuals. The CMA has participated in, and made recommendations to, Finance Canada over the course of the department's multi-year consultative process, including responding to the 2010 consultative paper Ensuring the Ongoing Strength of Canada's Retirement Income System. The CMA has also made recommendations to Finance Canada as a member of the Retirement Income Improvement Coalition (RIIC), which consists of 11 national professional associations representing over 1 million self-employed professionals. The following discussion and recommendations align with those previously made by the CMA and the RIIC. The pension framework is a critical issue to CMA's membership of over 76,000 physicians. In addressing the pension framework, including permitting PRPPs, two principles are central to the CMA's membership: to ensure that self-employed Canadians can retire with an appropriate level of retirement income (e.g., a target of 70% of pre-retirement income); and, to expand the retirement savings options that are available to self-employed Canadians. The CMA's comments herein, and recommendations to the Finance Committee to amend Bill C-25, are in support of these two principles. As elaborated below, the CMA encourages the Finance Committee to: 1. Amend Bill C-25 to raise the combined limit for RRSPs and PRPPs in order to increase the retirement savings capacity of self-employed individuals. 2. Amend Section 12(1) of Bill C-25 to expand the PRPP framework so it includes defined benefit and targeted benefit pension plans, which provide more secure savings vehicles than defined contributions plans. 3. Ensure the eligibility clauses of Bill C-25 (Sections 14-26) would allow well-governed professional organizations that represent a particular membership to be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. 1. Increase the combined contribution limit It is our understanding that the core benefit of the proposed PRPP framework is in providing smaller businesses access to low-cost pension plans, thereby providing a vehicle to encourage employers to establish, and contribute to, pensions for their employees. However, as explained by the Explanatory Notes accompanying the proposed Income Tax Act amendments, "an employer's contributions to an individual's PRPP account [and...] an individual's PRPP contributions in a taxation year will immediately reduce the individual's ability to make deductible RRSP contributions in that same year." While the CMA recognizes the value of, and supports, this objective, this proposal in effect maintains the status quo for self-employed individuals. Like the Canadian population at large, physicians represent an aging demographic - 38% of Canada's physicians are 55 or older - for whom retirement planning is an important concern. In addition, the vast majority of CMA members are self-employed physicians and, as such, they are unable to participate in workplace registered pension plans (RPPs). At present, physicians are more reliant on registered retirement savings plans (RRSPs) relative to other retirement savings vehicles. While individuals with employer contributions stand to benefit from increased retirement savings via employer contributions, self-employed individuals are merely provided with access to an alternate retirement savings vehicle. As explained in the Summary Report on Retirement Income Adequacy Researchi, "[h]igher income groups tend to exhibit a greater tendency to substitute one form of saving for another since they tend to be bound by limits...[I]f newly introduced plans are included in limitations imposed on the degree to which contributions may be deductible for tax purposes, saving may not increase for individuals who are constrained (i.e. saving up to their limit), since they would more likely substitute one type of saving for another (e.g., RRSP for a private pension plan)." Therefore, the CMA encourages the Finance Committee to consider amending Bill C-25 to increase the retirement savings capacity of self-employed individuals by raising the combined limit for RRSPs and PRPPs. 2. Include Defined Benefit and Targeted Benefit Pension Plans As currently proposed, Section 12(1) of Bill C-25 limits PRPPs to defined contribution pension plans by specifically excluding from eligibility of registration: (a) a pension plan as defined by 2(1) of the Pension Benefits Standards Act; (b) an employees' or a deferred profit-sharing plan; (c) an RRSP or a retirement compensation arrangement defined by 248(1) of the Income Tax Act; and, (d) any other prescribed plan or arrangement. As highlighted in the Summary Report on Retirement Income Adequacy Research, "defined benefit pension funds and annuities enable investors to share longevity risks as well as pool risky investments to diversify risk." By pooling risk, defined benefit and targeted benefit pension plans provide more secure savings vehicles than defined contribution plans. The CMA encourages the Finance Committee to amend Bill C-25 to expand the PRPP framework to include defined benefit and targeted benefit pension plans. 3. Clarify the eligibility criteria of "PRPP administrators" to include professional associations Further clarification is required on the type of organization that may qualify as a PRPP administrator under Bill C-25. While Sections 14-26 of Bill C-25 can be interpreted to extend administrator eligibility to organizations that are able to fulfill the criteria it establishes, Finance Canada's Framework for Pooled Registered Retirement Plans states that eligibility of administrators would be limited to "regulated financial institutions that are capable of taking on a fiduciary role." The CMA encourages the Finance Committee to ensure that the eligibility clauses of Bill C-25 would allow well-governed professional organizations that represent a particular membership to be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. Conclusion While the CMA supports the proposed PRPP framework in principle, the limitations currently proposed by Bill C-25 should be addressed to ensure that PRPPs also provide value to self-employed Canadians, including physicians. The CMA appreciates the opportunity to comment to the Finance Committee as part of its study of Bill C-25. Summary of Recommendations Recommendation 1 Amend Bill C-25 to raise the combined limit for RRSPs and PRPPs in order to increase the retirement savings capacity of self-employed individuals. Recommendation 2 Amend Section 12(1) of Bill C-25 to expand the PRPP framework so it includes defined benefit and targeted benefit pension plans, which provide more secure savings vehicles than defined contributions plans. Recommendation 3 Ensure the eligibility clauses of Bill C-25 (Sections 14-26) would allow well-governed professional organizations that represent a particular membership to be able to sponsor and administer RPPs and PRPPs for their own members, including self-employed members. i Prepared for the Research Working Group on Retirement Income Adequacy of Federal-Provincial-Territorial Ministers of Finance.
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Federal measures to recognize the significant contributions of Canada’s front-line health care workers during the COVID-19 pandemic

https://policybase.cma.ca/en/permalink/policy14247
Date
2020-06-02
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2020-06-02
Topics
Physician practice/ compensation/ forms
Text
Re: Federal measures to recognize the significant contributions of Canada’s front-line health care workers during the COVID-19 pandemic Dear Ministers Morneau and Hajdu: On behalf of the Canadian Medical Association (CMA) and HEAL’s member organizations, representing 650,000 health care workers in Canada, we are writing to you with recommendations for new federal measures to support the financial hardships and risks posed to front-line health care workers (FLHCWs) during the COVID-19 pandemic. To begin, we strongly support the measures the federal government has taken to date to mitigate the health and economic impacts of COVID-19. However, given the unique circumstances that FLHCWs face, additional measures are required to acknowledge their role, the risks being posed to themselves and their families, and the financial burden they have taken on through it all. All FLHCWs face numerous challenges trying to carry out their life-saving work during these incredibly difficult times and they deserve to be recognized for their significant contributions. As such, we are recommending that the federal government implement the following new measures for all FLHCWs: 1) An income tax deduction for FLHCWs put at risk during the COVID-19 pandemic, in recognition of their heroic efforts. All FLHCWs providing in-person patient care during the pandemic would be eligible to deduct a designated amount against their income earned. This would be modelled on the deduction provided to members of the Canadian Armed Forces serving in moderate- and high-risk missions. 2) A non-taxable grant to support the families of FLHCWs who die in the course of responding to the COVID-10 pandemic or who die as a result of an occupational illness or psychological impairment related to this work. The grant would also apply to cases in which the death of a FLHCW’s family member is attributable to the FLHCW’s work in responding to the pandemic. We are recommending that access to the Memorial Grant program, or a similar measure, be granted to FLHCWs and their family member(s). 3) A temporary emergency accommodation tax deduction for FLHCWs who incur additional accommodation costs as well as a home renovation credit in recognition of the need for FLHCWs to adhere to social distancing to prevent the spread of COVID-19 to their family members. We are recommending all FLHCWs earning income while working in a health care facility or public health unit or in a capacity related thereto (e.g. paramedics or janitorial staff) be eligible for the deduction and credit. 1410, pl. des tours Blair / Blair Towers Place, bur. / Suite 500 Ottawa ON K1J 9B9 Page 2 Ministers Morneau and Hajdu June 2, 2020 4) Provide additional child-care relief to FLHCWs by doubling the child-care deduction. We recommend the individuals listed above be eligible for the enhanced deduction. We recognize that it is important that any measures enacted be simple for the government to implement and administer, as well as simple for FLHCWs to understand and access. The recommendations above will ensure that relief applies to a wide range of Canada’s FLHCWs who are battling COVID-19, where the primary intention is to be as inclusive as possible. Once again, we commend the federal government for its decisive and meaningful response to the pandemic. Now is the time to ensure comprehensive supports are provided to those who have stepped up to protect the health and safety of all Canadians. We welcome the opportunity to discuss these recommendations with you. Sincerely, Sandy Buchman, MD, CCFP(PC), FCFP President, Canadian Medical Association This letter is signed by the following organizations: 1410, pl. des tours Blair / Blair Towers Place, bur. / Suite 500 Ottawa ON K1J 9B9 Page 3 Ministers Morneau and Hajdu June 2, 2020 Canadian Medical Association Canadian College of Health Leaders Canadian Podiatric Medical Association Association of Faculties of Medicine of Canada Canadian Counselling and Psychotherapy Association Canadian Psychiatric Association Canadian Association of Community Health Centres Canadian Psychological Association Canadian Association for Interventional Radiology Canadian Dental Association Canadian Association of Medical Radiation Technologists Canadian Dental Hygienists Association Canadian Society for Medical Laboratory Science Canadian Society of Nutrition Management Canadian Association of Midwives Canadian Association of Nuclear Medicine Canadian Massage Therapist Alliance Canadian Society of Respiratory Therapists Canadian Association of Occupational Therapists Royal College of Physicians and Surgeons of Canada College of Family Physicians of Canada Canadian Association of Optometrists Canadian Nurses Association Dietitians of Canada Canadian Association of Social Workers Canadian Ophthalmological Society HealthCareCAN Canadian Cardiovascular Society Canadian Orthopaedic Association Paramedic Association of Canada Pallium Canada Canadian Chiropractic Association Canadian Pharmacists Association Canadian Physiotherapy Association Speech-Language & Audiology Canada
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Federal tax proposal risks negative consequences for health care delivery

https://policybase.cma.ca/en/permalink/policy11960
Date
2016-11-18
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2016-11-18
Topics
Physician practice/ compensation/ forms
Text
The CMA is the national voice of Canadian physicians. On behalf of its more than 83,000 members and the Canadian public, the CMA’s mission is helping physicians care for patients. In fulfillment of this mission, the CMA’s role is focused on national, pan-Canadian health advocacy and policy priorities. As detailed in this brief, the CMA is gravely concerned that by capturing group medical structures in the application of Section 44 of Bill C-29, the federal government will inadvertently negatively affect medical research, medical training and education as well as access to care. To ensure that the unintended consequences of this federal tax policy change do not occur, the CMA is strongly recommending that the federal government exempt group medical and health care delivery from the proposed changes to s.125 of the Income Tax Act regarding multiplication of access to the small business deduction in Section 44 of Bill C-29. Relevance of the Canadian Controlled Private Corporation Framework to Medical Practice Canada’s physicians are highly skilled professionals, providing an important public service and making a significant contribution to our country’s knowledge economy. Due to the design of Canada’s health care system, a large majority of physicians – more than 90% – are self-employed professionals and effectively small business owners. As self-employed small business owners, physicians typically do not have access to pensions or health benefits, although they are responsible for these benefits for their employees. Access to the Canadian-Controlled Private Corporation (CCPC) framework and the Small Business Deduction (SBD) are integral to managing a medical practice in Canada. It is imperative to recognize that physicians cannot pass on any increased costs, such as changes to CCPC framework and access to the SBD, onto patients, as other businesses would do with clients. In light of the unique business perspectives of medical practice, the CMA strongly welcomed the Finance Committee’s recommendation to maintain the existing small business framework and the subsequent federal recognition in the 2016 budget of the value that health care professionals deliver to communities across Canada as small business operators. Contrary to this recognition, the 2016 budget also introduced a proposal to alter eligibility to the small business deduction that will impact physicians incorporated in group medical structures. What’s at risk: Contribution of group medical structures to health care delivery The CMA estimates that approximately 10,000 to 15,000 physicians will be affected by this federal taxation proposal. If implemented, this federal taxation measure will negatively affect group medical structures in communities across Canada. By capturing group medical structures, this proposal also introduces an inequity amongst incorporated physicians, and incentivizes solo practice, which counters provincial and territorial health delivery priorities. Group medical structures are prevalent within academic health science centres and amongst certain specialties, notably oncology, anaesthesiology, radiology, and cardiology. Specialist care has become increasingly sub-specialized. For many specialties, it is now standard practice for this care to be provided by teams composed of numerous specialists, sub-specialists and allied health care providers. Team-based care is essential for educating and training medical students and residents in teaching hospitals, and for conducting medical research. Put simply, group medical structures have not been formed for taxation or commercial purposes. Rather, group medical structures were formed to deliver provincial and territorial health priorities, primarily in the academic health setting, such as teaching, medical research as well as optimizing the delivery of patient care. Over many years, and even decades, provincial and territorial governments have been supporting and encouraging the delivery of care through team-based models. To be clear, group medical structures were formed to meet health sector priorities; they were not formed for business purposes. It is equally important to recognize that group medical structures differ in purpose and function from similar corporate or partnership structures seen in other professions. Unlike most other professionals, physicians do not form these structures for the purpose of enhancing their ability to earn profit. It is critical that the federal government acknowledge that altering eligibility to the small business deduction will have more significant taxation implication than simply the 4.5% difference in the small business versus general rate at the federal level. It would be disingenuous to argue that removing full access to the small business deduction for incorporated physicians in group medical structures will be a minor taxation increase. As demonstrated below in Table 1, the effect of this federal taxation change will vary by province. Table 1: Taxation impacts by province, if the federal taxation proposal is implemented In Nova Scotia, for example, approximately 60% of specialist physicians practice in group medical structures. If the federal government applies this taxation proposal to group medical structures, these physicians will face an immediate 17.5% increase in taxation. In doing so, the federal government will establish a strong incentive for these physicians to move away from team-based practice to solo practice. If this comes to pass, the federal government may be responsible for triggering a reorganization of medical practice in Nova Scotia. Finance Canada Grossly Underestimating the Net Impact The CMA is aware that Finance Canada has developed theoretical scenarios that demonstrate a minimal impact to incorporated physicians within group medical structures. Working closely with our subsidiary, MD Financial Management, the CMA submitted real financial scenarios from real financial information provided to the CMA from incorporated physicians in group medical structures. These real examples demonstrate that there will be a significant impact to incorporated physicians in group medical structures, if this federal tax proposal will apply to them. The theoretical scenarios developed by Finance Canada conclude the net financial impact to an incorporated physician in a group medical structure would be in the magnitude of hundreds of dollars. In stark contrast to the theoretical scenarios developed by Finance Canada, the CMA submitted financial scenarios of two incorporated physicians in group medical structures. The financial calculations undertaken by the CMA is based on the real financial information of these two physicians. The examples revealed yearly net reduction of funds of $32,510 and $18,065 for each of these physicians respectively. Projecting forward, for the first physician, this would represent a negative impact of $402,330 based on a 20-year timeframe and 4.8% rate of return1. Extending the same assumptions to all incorporated members of that physician’s group medical structure, the long-term impact for the group would be $39.4 million.2 1 Source: MD Financial Management 2 Please note that these projections have not been adjusted for the inherent tax liability on the growth. 3 Source: MD Financial Management 4 Please note that these projections have not been adjusted for the inherent tax liability on the growth. For the second physician, projecting forward, this would represent a negative impact of $223,565, based on a 20-year timeframe and 4.8% rate of return3. Extending the same assumptions to all incorporated members of that physician’s group medical structure, the long-term impact for the group would be $13.4 million.4 Unprecedented Level of Concern Expressed by Physicians Following the publication of the 2016 federal budget, the CMA received a significant volume of correspondence from its membership expressing deep concern with the proposal to alter access to the small business deduction for group medical structures. The level of correspondence from our membership is quite simply unprecedented in our almost 150 year history. As part of the CMA’s due diligence as the national professional organization representing physicians, we informed our membership of Finance Canada’s consultation process on the draft legislative measures. In response, the CMA was copied on submissions by over 1,300 physicians to Finance Canada’s pre-legislative consultation. In follow up, the CMA surveyed these physicians to better understand the impacts of the budget proposal. Here’s what we heard: . Most respondents (61%) indicated that their group structure would dissolve; . Most respondents (54%) said they would stop practicing in their group structure and that other partners would leave (76%); . A large majority (78%) indicated that the tax proposal would lead to reduced investments in medical research by their group; . Almost 70% indicated that the tax proposal would limit their ability to provide medical training spots; and, . Another 70% indicated that the tax proposal will mean reduced specialty care by their group. The full summary of the survey is provided as an appendix to this brief. To further illustrate the risks of this proposal to health care, below are excerpts from some of the communiques received by the CMA from its membership: . “Our Partnership was formed in the 1970s…The mission of the Partnership is to achieve excellence in patient care, education and research activities….there would be a serious adverse effect on retention and recruitment if members do not have access to the full small business deduction…The changes will likely result in pressure to dissolve the partnership and revert to the era of departments services by independent contractors with competing individual financial interests.” Submitted to the CMA April 15, 2016 from a member of the Anesthesia Associates of the Ottawa Hospital General Campus . “The University of Ottawa Heart Institute is an academic health care institution dedicated to patient care, research and medical education…To support what we call our “academic mission,” cardiologists at the institute have formed an academic partnership…If these [taxation] changes go forward they will crippled the ability of groups such as ours to continue to function and will have a dramatic negative impact on medical education, innovative health care research, and the provision of high-quality patient care to our sickest patients.” Submitted to the CMA April 19, 2016 from a member of the Associates in Cardiology . “We are a general partnership consisting of 93 partners all of whom are academic anesthesiologists with appointments to the Faculty of the University of Toronto and with clinical appointments at the University Health Network, Sinai Health System or Women’s College Hospital…In contrast to traditional business partnerships, we glean no business advantage whatsoever from being in a partnership…the proposed legislation in Budget 2016 seems unfair in that it will add another financial hardship to our partners – in our view, this is a regressive tax on research, teaching and innovation.” Submitted to the CMA April 14, 2016 from members of the UHN-MSH Anesthesia Associates Recommendation The CMA recommends that the federal government exempt group medical and health care delivery from the proposed changes to s.125 of the Income Tax Act regarding multiplication of access to the small business deduction, as proposed in Section 44 of Bill C-29, Budget Implementation Act, 2016, No. 2. Below is a proposed legislative amendment to ensure group medical structures are exempted from Section 44 of Bill C-29, Budget Implementation Act, 2016, No. 2: Section 125 of the Act is amended by adding the following after proposed subsection 125(9): 125(10) Interpretation of designated member – [group medical partnership] – For purposes of this section, in determining whether a Canadian-controlled private corporation controlled directly or indirectly in any manner whatever by one or more physicians or a person that does not deal at arm's length with a physician is a designated member of a particular partnership in a taxation year, the term "particular partnership" shall not include any partnership that is a group medical partnership. 125(11) Interpretation of specified corporate income – [group medical corporation] – For purposes of this section, in determining the specified corporate income for a taxation year of a corporation controlled directly or indirectly in any manner whatever by one or more physicians or a person that does not deal at arm's length with a physician, the term "private corporation" shall not include a group medical corporation. Subsection 125(7) of the Act is amended by adding the following in alphabetical order: "group medical partnership" means a partnership that: (a) is controlled, directly or indirectly in any manner whatever, by one or more physicians or a person that does not deal at arm's length with a physician; and (b) earns all or substantially all of its income for the year from an active business of providing services or property to, or in relation to, a medical practice; "group medical corporation" means a corporation that: (a) is controlled, directly or indirectly in any manner whatever, by one or more physicians or a person that does not deal at arm's length with a physician; and (b) earns all or substantially all of its income for the year from an active business of providing services or property to, or in relation to, a medical practice. "medical practice" means any practice and authorized acts of a physician as defined in provincial or territorial legislation or regulations and any activities in relation to, or incidental to, such practice and authorized acts; "physician" means a health care practitioner duly licensed with a provincial or territorial medical regulatory authority and actively engaged in practice; Incorporation Survey, October 2016 *Totals may exceed 100% as respondents were allowed to select more than one response 65% 13% 6% 5% 2% 2% 2% 2% 2% 1% ON AB BC NS MB NL QC SK NB YT % Distribution by Province of Practice 65% 28% 22% 15% 9% 8% 8% 6% 6% 3% 3% 3% 3% Academic health sciences centre Private office / clinic University Community hospital Emergency department (in community hospital or AHSC) Community clinic/Community health centre Non-AHSC teaching hospital Research unit Free-standing lab/diagnostic clinic Free-standing walk-in clinic Nursing home/ Long term care facility / Seniors' residence Administrative office / Corporate office Other % Distribution by Work Setting 20 12 9 8 8 7 7 6 5 5 4 Ottawa Hospital (Ottawa) University Health Network (Toronto) Sunnybrook Health Sciences Centre (Toronto) Foothills Medical Centre (Calgary) St. Joseph's Health Centre (Hamilton) Mount Sinai Hospital (Toronto) London Health Sciences Centre (London) South Calgary Health Campus (Calgary) St. Micheal's Hospital (Toronto) Children's Hospital of Eastern Ontario (Ottawa) Royal Alexandra Hospital (Edmonton) Most frequently mentioned hospitals where respondents work in group medical structures Synopsis 61 54 76 78 67 68 30 36 19 16 23 24 9 10 5 6 10 8 Group medical structure will dissolve Stop practice in your group medical structure Partnering members leave the group medical structure Reduced investments in medical research Reduced medical training spots Reduced provision of specialized care Physicians perceptions about the likelihood of the following outcomes Likely or very likely Unsure Unlikely or very unlikely The federal government is advancing a tax proposal that will alter access to the small business deduction. If implemented, this proposal will affect incorporated physicians practicing in partnership group medical structures. The Canadian Medical Association (CMA) is actively advocating for the federal government to exempt group medical structures from the application of this tax proposal. 94% 2% 4% Importance of Exempting Group Medical Structures from the Tax Proposal Important or very important Unsure Unimportant or very unimportant To support the effectiveness of its advocacy efforts, the CMA conducted an online survey seeking input from members who had voiced their concerns about this issue directly with the Department of Finance and who had copied the CMA on their submissions. Sample: physician type, province, and work setting The survey was sent to 1089 CMA members, of which 174 responded (15.9% response rate). All sample respondents were incorporated and practiced in a group medical structure; 26% were family physicians (N=45) and 74% were specialists (N=129). Most respondents indicated practicing primarily in Ontario (65%) and Alberta (13%). With respect to practice settings, the majority reported working in an academic health sciences centre (65%), followed by a private office/clinic (28%), university (22%), community hospital (15%), emergency department (9%), community clinic/community health centre (8%), non-AHSC teaching hospital (8%), research unit (6%), and free-standing lab/diagnostic clinic (6%). In total, respondents worked in 79 hospitals spread around 36 cities. Likelihood of outcomes resulting from the federal tax proposal When asked about the possible consequences of the proposed changes, the largest share of respondents (78%) felt a reduction in investments in medical research was likely or very likely. Almost as many (76%) also felt that partnering members would likely leave the group medical structure. . Most respondents (61%) indicated that their group medical structure would be likely or very likely to dissolve if the federal tax proposal to change access to the small business deduction was implemented. Less than one-third (30%) felt unsure while only a few (9%) reported it as unlikely or very unlikely. . More than half of respondents (54%) indicated that they would be likely or very likely to stop practicing in their group medical structure if the tax proposal was implemented. More than one-third (36%) were unsure while only a few (10%) reported it as unlikely or very unlikely. . More than three-quarters of respondents (76%) indicated that other partnering members would be likely or very likely to leave their group medical structure if the tax proposal was implemented. About 20% remained unsure while only 5% reported it as unlikely or very unlikely. . Almost 8 in 10 respondents (78%) indicated that implementing the tax proposal would be likely or very likely to reduce investments in medical research for their group medical structure. 16% remained unsure while 6% reported it as unlikely or very unlikely. . Approximately two-thirds of respondents (67%) indicated that implementing the tax proposal would be likely or very likely to reduce the ability of the group medical structure to provide medical training spots. About a quarter (23%) remained unsure and 1 in 10 reported it as unlikely or very unlikely. . Almost 7 in 10 respondents (68%) indicated that implementing the tax proposal would be likely or very likely to reduce provision of specialized care by their group medical structure. Almost a quarter (24%) remained unsure while 8% reported it as unlikely or very unlikely. Importance of exempting group medical structures from the tax proposal More than 9 in 10 respondents (94%) felt that it is important or very important for the federal government to exempt group medical structures from the tax proposal to avoid negatively affecting health care delivery in their province. The remaining respondents were unsure (2%) or considered it unimportant or very unimportant (4%). Other Impacts – Write-in Question Before submitting the survey, respondents were given the chance to provide additional comments about other potential impacts that the proposed changes might produce. Most responses touched upon a few and inter-related themes, including: 1. Impact on education and research will be detrimental and will eventually affect patient care: o “Without the group medical structure, we cannot adequately support teaching education and research activities. Physicians in academic health sciences centres will be forced to use their time to see patients, in order to bill fee-for-service to make a living. Very little time will be left over to spend doing the research that is critical to advancing medical science, to supporting our university, and our nation’s prominent place in the world of medicine” o “Support is given to the academic health sciences centres by the provincial government in order to facilitate research and education. The federal government's changes will penalize physicians who already dedicate much of their time to providing the stepping stones to advance medicine forward. These physicians generally make less income than physicians working in private practice. They are willing to take this monetary hit because they love what they do. However we all need to support our families and put food on the table. With the government's changes, this may not be possible in the current system, and these group medical structures will need to be dissolved and the physicians working will have much less time to dedicate to research and education.” o “Less education, research activity to focus on fee-for-service procedures to compensate for higher taxes.” o Our ability to provide teaching for medical education and research, which are currently not remunerated, would be curtailed. There would be no incentive but rather a significant disincentive to provide these activities because we would be financially penalized compared to physicians in the same specialty that are not in group medical structures.” o “As the main teaching practice structure, we will lose full time faculty who provide the backbone to the program. They currently earn much below the average for Family Physicians in the province and our ability to support education and research will be compromised.” 2. Discourages practice in academic centres: o “Working in an academic center as a general pediatrician means that we already make substantially less money than our community colleagues. There is very little incentive to remain in academic practice if we not only earn less, but are then not entitled to the same tax savings. I would leave academic practice and I suspect many of my colleagues would as well. I think we could see the end of the current group medical structure, as it would no longer support a financially viable model for academic practice.” o “Creates a further divide between working in an academic centre and in the community. It will continue to be more advantageous to work in a smaller community - more money, less cost of living, less administrative and academic hassles, less research funding. Why bother working at an academic centre with such disadvantages.” o “This policy seems to target academic physicians in groups disproportionately. These physicians currently support research and education by reallocating our own funds generated from clinical care. It is puzzling as to why the Federal Government is waging this war on the academic physician workforce.” 3. Physician retention and recruitment will be challenging: o “I will retire sooner than otherwise.” o “At the present time it is very difficult to recruit family doctors who are interested in teaching, research and administration of academic family medicine. This tax change will make it increasingly more difficult to recruit such individuals.” o “I'm concerned that the proposed changes erase any benefits from a corporation structure and leave me with a loss. Work is so stressful and demanding that if I find myself in a disadvantaged situation financially as well, this would be another factor encouraging me either to retire or move outside of Canada. If I'm going to be faced with losses and more stress, why not instead focus on my quality of life instead?” o “It would severely restrict our ability to recruit research and specialty physicians. We would not be able to compete with community centres and would see a dramatic decline in our ability to provide for teaching and research activities now funded through the group structure.” o “I am a dual citizen and would seriously entertain moving to the USA.” o “It will basically force me to go to a free standing walk in clinic.” o “It would be less likely to recruit the best quality of medical staff to academic practice as there will be a significant financial disincentive, especially compared to what that same individual could earn on their own in a community practice. This is on top of the fact that academic practitioners tend to earn less to start with.” 4. Discourages team-based collaborative care: o “The bill sets up an unfair system where it is more attractive to be a solo MD rather than to collaborate and be part of a team.” o “This creates an every person for themselves philosophy.” o “The provision of our group services is required to ensure best patient care. It is wrong to penalize this model of comprehensive care.” 5. Practice will close and services will be limited in certain areas: o “Any reduction in research, administration, academic activity, and members would affect patient care at our facility and therefore be a threat to patient safety. e.g., if multiple physicians leave, then we won't have enough physicians to cover the emergency department appropriately, wait times will increase, and serious patient safety concerns will arise.” o “Reduces productivity of the doctors concerned and hence quality of service provided. Access will also be affected!” o This would be unattractive for some, and they may leave (or others may not join.) If partners leave, the overhead will go up and we would likely close. Because our overhead is already borderline unacceptable. Shared between fewer docs would make it economically impossible. And this could easily happen if docs leave. o “Reduced physician coverage if members opt out of group medical structure, which would have an impact on greater access and the quality of care.” o “Our ability to have a large interdisciplinary team to assist in serving our patients could not continue to exist. Our ability to continue to provide 24/7 on-call and after hours clinics would decrease due to a change in the structure leading to less practitioners.”
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The impact of the Goods and Services Tax (GST) and the proposed Harmonized Sales Tax (HST) on Canadian physicians : Brief submitted to the House of Commons Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy2023
Last Reviewed
2019-03-03
Date
1997-01-21
Topics
Health human resources
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1997-01-21
Topics
Health human resources
Physician practice/ compensation/ forms
Text
The Canadian Medical Association (CMA) commends the federal government for its clear and open process, and for encouraging a dialogue in areas of tax policy and economics. Canadians from all walks of life look to the government for strong and constructive leadership in this area. The CMA therefore appreciates the opportunity to present its views to the House of Commons Standing Committee on Finance as it considers Bill C-70 "An Act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts." The CMA has appeared before the Committee on several occasions when it has considered matters pertaining to federal tax policy in Canada. In addition to our submissions, as part of the government's pre-budget consultation process, the CMA appeared before the Committee when it examined a number of tax policy alternatives to the Goods and Services Tax (GST) in 1994. 1 At that time, the CMA clearly articulated the medical profession's concerns about the need to implement a federal sales tax system that is simplified, fair and equitable for all. The CMA remains strongly committed to the principles that underpin an efficient and effective sales tax system. However, it is of the strong view that there is, on the one hand, a need to review the relationship between sales tax policy and health care policy in Canada, and between the sales tax policy and the physicians as providers of services, on the other. Canada's health care system is a defining characteristic of what makes Canada special. It is no secret that funding for the health care system is under stress and all providers, including physicians, are being asked to shoulder their responsibility in controlling costs and responding to this fiscal challenge. However, physicians have had their costs of providing medical services increased by the federal government through the introduction of the GST. Specifically, the introduction of the GST as it applies to physicians serves as a constant reminder that there still remain some tax policy anomalies - that, without amendment, their consequences will be significantly magnified with the introduction of a proposed harmonized sales tax (HST) on April 1, 1997, as was the case with the introduction of the Quebec Sales Tax (QST) on July 1, 1992. The tax anomaly is a result of the current categorization of medical services as "tax exempt" under the Excise Tax Act. As a consequence, physicians are, on the one hand, in the unenviable position of being denied the ability to claim a GST tax refund (that is, denied the ability to claim input tax credits - ITCs), on the medical supplies (such as medical equipment, medical supplies, rent, utilities) necessary to deliver quality health care, and on the other, cannot pass the tax onto those who purchase such services (i.e., the provincial and territorial governments). Physicians, from coast to coast, are understandably angry that they have been singled out for unfair treatment under the GST, QST and the soon to be implemented HST. II. BACKGROUND The GST was designed to be a " consumer-based tax" where the tax charged for purchases during the "production process" would be refunded - with the consumer, not producer of a good or a service, bearing the full burden of the tax. As a result, self-employed individuals and small businesses are eligible to claim a tax refund of the GST from the federal government on purchases that are required in most commercial activities. It is important to understand that those who can claim a tax refund under the GST in most commercial activities will still be able to do so with the proposed introduction of a harmonized sales tax in Atlantic Canada. The rate is proposed to be set at 15% (7% federal tax, 8% provincial tax). In the case of medical services, the consumer (i.e., the one who purchases such services) is almost always the provincial and territorial governments. Since the provincial and territorial governments do not pay GST (due to their Constitutional exemption), one would have expected the cost of providing medical services to be free of GST. However, this is not the case. It is difficult to reconcile federal health care policies to preserve and protect publicly funded health care with tax policy which singles out and taxes the costs of medical services. Regrettably, physicians find themselves in an untenable situation of "double jeopardy". This is patently unfair and on the basis of the fundamental principles of administering a fair and equitable tax system should be amended accordingly. In an effort to document the impact of the federal government's decision to designate medical services as tax exempt, an independent study by the accounting firm KPMG estimated that physicians' costs increased by $60 million of GST per year. 2 Since 1991, this total is now in excess of $360 million. The recent agreement between the federal government and Atlantic provinces (except Prince Edward Island) to harmonize their sales taxes will make matters significantly worse for physicians as the HST broadens the provincial tax base to essentially that of the GST in those provinces. With no ability to claim a tax refund on the GST they currently pay (and the proposed HST effective April 1, 1997), physicians once again will have to absorb the additional costs associated with the practice of medicine. In assessing the impact of the proposed HST, KPMG has estimated that physicians in New Brunswick, Nova Scotia, and Newfoundland will be out-of-pocket an additional $4.7 million each year because they are not eligible for a tax refund for their purchases. 3 The medical profession, is not looking for special treatment. What we are asking for is to be treated no differently than other self-employed Canadians and small businesses who have the opportunity to claim ITCs, and to be placed on the same footing with other health care providers who have the ability to recoup GST costs. Physicians, as self-employed individuals are considered small businesses for tax purposes, therefore, it seems entirely reasonable that they should have the same tax rules that apply to other small businesses. This is a question of fundamental fairness. III. POLICY CONTEXT Prior to the introduction of the GST, the federal sales tax (FST) was included in the price of most goods (not services) that were produced in, or imported to, Canada. Therefore, when goods were purchased by consumers, the FST was built into the price. At that time, physicians, and other self-employed Canadians and small businesses, were essentially on a level sales tax playing field. Since 1991, however, the introduction of the GST has tilted the table against physicians. Unless this situation is rectified, with the introduction of the HST, physicians in Atlantic Canada will join those in Quebec who experience additional costs due to the GST and their provincial sales tax using the same rules. (i). The Impact of the GST on Good Tax Policy and Good Health Care Policy When it reviews Bill C-70, the Standing Committee on Finance should look for opportunities where tax policy and health care policy go hand-in-hand. The principle of aligning good health policy with sound tax policy is critical to managing change while serving to lay down a strong foundation for future growth and prosperity. Unfortunately, the current GST policy introduces a series of distortions that have tax policy and health policy working against one another. Tax policies that do not reinforce health policy are bad tax policies. Consider, for example: 1. Under the current system, hospitals (under the "MUSH" formula - Municipalities, Universities, Schools and Hospitals) have been afforded an 83% rebate on GST paid for purchases made while physicians must absorb the full GST cost on their supplies. At a time when health policy initiatives across Canada are attempting to expand community-based practices, the current GST policy (and now harmonized sales tax policy) which taxes supplies in a private clinic setting while rebating much of the tax in a hospital setting acts to discourage the shift in emphasis; 2. Prescription drugs are zero-rated. The objective was to ensure that pharmaceutical firms are no worse off than under the previous federal sales tax regime. Recognizing that medical services can play an equally important role as drugs, it appears inconsistent that the government would choose to have drugs as tax free, and medical services absorbing GST; 3. In the current fiscal climate, the current GST policy, and now the proposed harmonized sales tax in Atlantic Canada, is threatening to harm the important role when it comes to recruitment and retention of physicians across Canada, and in particular, the Atlantic provinces - where they are already experiencing difficulty; and, 4. It is estimated that the 55,000 physicians employ up to 100,000 Canadians. Physicians play an important role in job creation. The disproportionate effects of the GST policy could have an adverse effect on the number of individuals employed by physicians. With these issues at hand, it is apparent that good tax policy and good health policy are themselves not synchronized and are working at cross purposes. At this point, when the Standing Committee is reviewing Bill C-70, it is the time to address this situation based on the fundamental principle of fairness in the tax system, while ensuring that good tax policy reinforces good health care policy. (ii). Not All Health Care Services Are Created Equal under the GST/HST Physicians are not the only group of health care providers whose services are placed under the category of "tax exempt", with the result that they incur increased GST costs. For example, the services of dentists, nurses, physiotherapists, psychologists and chiropractors are categorized as "tax exempt". However, there is an important distinction between whether the services are government funded or not. Health care providers who deliver services privately and which are not publicly funded do have the opportunity to pass along the GST in their costs through their fee structures. For these services that are government funded there are no opportunities for physicians to recover the tax paid for purchases unless a specific rebate has been provided (e.g., hospitals). To date, in negotiations with the medical profession, no provincial/territorial government has agreed to provide funding to reflect the additional costs associated with the introduction of the GST. Their position has been that this is a "federal" matter. This becomes important when one considers that under the Canadian Constitution one level of government cannot tax another, and the provincial governments are not prepared to absorb the cost of the GST. It is critical to point out that since doctors receive 99% of their professional earnings from the government health insurance plans, 4 they have absolutely no other option when it comes to recovering the GST - they must absorb it! In summary, while a number of health care services are categorized as tax exempt, it must be emphasized that some providers "are more equal than others" under the GST - contrary to other health care providers, physicians do not have the ability to claim ITCs. This distinction becomes readily apparent when one considers the sources of (private and/or public) funding for such services. IV. THE SEARCH FOR A SOLUTION Like many others in Canadian society, physicians work hard to provide quality health care to their patients within what is almost exclusively a publicly-financed system for medical services. Physicians are no different from Canadians in that they, too, are consumers (and purchasers). As consumers, physicians pay their fair share of taxes to support the wide range of valued government services. By the same token, as providers of health care, physicians have not accepted, nor should they accept, a perpetuation of the fundamental injustices built into the current GST, QST and proposed HST arrangements. To date, the CMA has made representations to two Ministers of Finance and their Department Officials. We have discussed several ways to address a situation that is not sustainable, with no resolution to date. We look to this Committee and the federal government for a fair solution to this unresolved issue. V. RECOMMENDATION This unfair and discriminatory situation can be resolved. There is a solution that can serve to reinforce good economic policy with good health care policy in Canada. An amendment to the Excise Tax Act, the legislation which governs the GST (and proposed HST) can make an unfair situation fair to all Canadian physicians. In its recent submission to the Standing Committee as part of the 1997 pre-budget consultation process, the CMA recommended "that medical services be zero-rated, in order to achieve a fair and equitable GST policy for physicians." In order to achieve this objective all health care services, including medical services, funded by the provinces could be zero-rated. This recommendation serves to place physicians on a level playing field with other self-employed Canadians and small businesses. In addition, from a health care perspective, this would treat medical services in the same manner as that of prescription drugs. This is a reasonable proposition, as in many instances, medical treatments and drug regimens go hand-in-hand. Furthermore, this recommendation would ensure that medical services under the GST and proposed HST would be no worse off than other goods or services that provincial governments' purchase and where suppliers can claim a tax refund (i.e., ITCs). While the recommendation is an important statement in principle of what is required to address the current inequities under the GST, and soon to be HST, the CMA offers a more specific recommendation to the Standing Committee as to how the principles can be operationalized within the context of Bill C-70 and the Excise Tax Act. The CMA respectfully recommends the following: 1. "THAT HEALTH CARE SERVICES FUNDED BY THE PROVINCES BE ZERO-RATED." CMA has been advised that this would be accomplished by amending Bill C-70 as follows: (1). Section 5 of Part II of Schedule V to the Excise Tax Act is replaced by the following: 5. "A supply (other than a zero-rated supply) made by a medical practitioner of a consultative, diagnostic, treatment or other health care service rendered to an individual (other than a surgical or dental service that is performed for cosmetic purposes and not for medical or reconstructive purposes)." (2). Section 9 of Part II of Schedule V to the Excise Tax Act is repealed. (3). Part II of Schedule VI to the Excise Tax Act is amended by adding the following after section 40: 41. A supply of any property or service but only if, and to the extent that, the consideration for the supply is payable or reimbursed by the government under a plan established under an Act of the legislature of the province to provide for health care services for all insured persons of the province. VI. SUMMARY By adopting the recommendation above, the federal government would fulfil, at least two over-arching policy objectives, they are: 1. Strengthening the relationship between good economic policy and good health policy in Canada; and, 2. Applying the fundamental principles that underpin our taxation system (fairness, efficiency, effectiveness), in all cases. ________________________ 1 the Goods and Services Tax: Fairness for Physicians, Presentation to the House of Commons Standing Committee on Finance, Ottawa, Ontario, March 15, 1994. The Canadian Medical Association. 2 Review of the Impact of the Goods and Services Tax on Canadian Physicians, KPMG, June, 1992. 3 Review of the Impact of a Provincial Value Added Tax on Physicians in New Brunswick, Nova Scotia, and Newfoundland and Labrador, KPMG, August, 1996. 4 National Health Expenditures, 1975-1994, Health Canada, January 1996.
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