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2015 Pre-budget consultations: Federal leadership to support an aging population

https://policybase.cma.ca/en/permalink/policy11753

Date
2015-07-31
Topics
Health systems, system funding and performance
Population health/ health equity/ public health
  1 document  
Policy Type
Parliamentary submission
Date
2015-07-31
Topics
Health systems, system funding and performance
Population health/ health equity/ public health
Text
Helping physicians care for patients Aider les médecins à prendre soin des patients Canada is a nation on the precipice of great change. This change will be driven primarily by the economic and social implications of the major demographic shift already underway. The added uncertainties of the global economy only emphasize the imperative for federal action and leadership. In this brief, the Canadian Medical Association (CMA) is pleased to present four recommendations to the House of Commons Standing Committee on Finance for meaningful federal action in support of a national seniors strategy; these are essential measures to prepare for an aging population. Canada's demographic and economic imperative In 2011 the first of wave of the baby boomer generation turned 65 and Canada's seniors population stood at 5 million.1 By 2036, seniors will represent up to 25% of the population.2 The impacts of Canada's aging population on economic productivity are multi-faceted. An obvious impact will be fewer workers and a smaller tax base. Finance Canada projects that the number of working-age Canadians for every senior will fall from about 5 today to 2.7 by 2030.3 The projected surge in demand for services for seniors that will coincide with slower economic growth and lower government revenue will add pressure to the budgets of provincial and territorial governments. Consider that while seniors account for about one-sixth of the population, they consume approximately half of public health spending.4 Based on current trends and approaches, seniors' care is forecast to consume almost 62% of provincial/territorial health budgets by 2036.5 The latest fiscal sustainability report of the Parliamentary Budget Officer explains that the demands of Canada's aging population will result in "steadily deteriorating finances" for the provinces and territories and they "cannot meet the challenges of population ageing under current policy."6 Theme 1: Productivity A) New federal funding to provincial/territorial governments Canada's provincial and territorial leaders are aware of the challenges ahead. This July, the premiers issued a statement calling for the federal government to increase the Canada Health Transfer to 25% of provincial and territorial health care costs to address the needs of an aging population. To support the innovation and transformation needed to address these needs, the CMA recommends that the federal government deliver additional funding on an annual basis beginning in 2016-17 to the provinces and territories by means of a demographic-based top-up to the Canada Health Transfer (Table 1). For the fiscal year 2016-17, this top-up would require $1.6 billion in federal investment. Table 1: Allocation of the federal demographic-based top-up, 2016-20 ($million)7 Jurisdiction 2016 2017 2018 2019 2020 All of Canada 1,602.1 1,663.6 1,690.6 1,690.3 1,879.0 Newfoundland and Labrador 29.7 30.5 33.6 35.3 46.1 Prince Edward Island 9.1 9.7 10.6 10.6 11.5 Nova Scotia 53.6 58.6 62.3 61.9 66.6 New Brunswick 45.9 50.7 52.2 52.0 57.2 Quebec 405.8 413.7 418.8 410.2 459.5 Ontario 652.2 677.9 692.1 679.0 731.6 Manitoba 28.6 30.6 33.5 31.1 36.6 Saskatchewan 3.5 4.9 7.3 11.9 15.4 Alberta 118.5 123.3 138.9 134.9 157.5 British Columbia 251.6 258.7 270.3 258.4 291.3 Yukon 1.4 2.6 2.1 2.4 2.5 Northwest Territories 1.4 1.6 1.7 1.7 2.1 Nunavut 0.9 0.6 0.8 0.9 1.0 B) Federal support for catastrophic drug coverage A major gap in Canada's universal health care system is the lack of universal access to prescription medications, long recognized as the unfinished business of medicare. Canada stands out as the only country with universal health care without universal pharmaceutical coverage.8 According to the Angus Reid Institute, more than one in five Canadians (23%) report that they or someone in their household did not take medication as prescribed because of the cost during the past 12 months.9 Statistics Canada's Survey of Household Spending reveals that households headed by a senior spend $724 per year on prescription medications, the highest among all age groups and over 60% more than the average household.10 Another recent study found that 7% of Canadian seniors reported skipping medication or not filling a prescription because of the cost.11 In addition to the very real harms to individuals, lack of coverage contributes to the inefficient use of Canada's scarce health resources. While there are sparse economic data in Canada on this issue, earlier research indicated that this inefficiency, which includes preventable hospital visits and admissions, represents an added cost of between $1 billion and $9 billion annually.12 As an immediate measure to support the health of Canadians and the productivity of the health care sector, the CMA recommends that the federal government establish a new funding program for catastrophic coverage of prescription medication. The program would cover prescription medication costs above $1,500 or 3% of gross household income on an annual basis. Research commissioned by the CMA estimates this would cost $1.48 billion in 2016-17 (Table 2). This would be a positive step toward comprehensive, universal prescription drug coverage. Table 2: Projected cost of federal contribution to cover catastrophic prescription medication costs, by age cohort, 2016-2020 ($ million)13 Age cohort 2016 2017 2018 2019 2020 Share of total cost Under 35 years 107.0 107.6 108.2 108.8 109.3 7% 35 to 44 years 167.4 169.8 172.7 175.7 178.4 11% 45 to 54 years 274.2 270.2 270.2 265.7 262.8 18% 55 to 64 years 362.5 370.7 378.6 384.6 388.2 25% 65 to 74 years 292.1 304.0 315.8 328.4 341.9 21% 75 years + 286.3 292.0 299.0 306.6 314.4 20% All Ages 1,480.4 1,497.2 1,514.2 1,531.2 1,548.1 100% Theme 2: Infrastructure and communities All jurisdictions across Canada are facing shortages in the continuing care sector. Despite the increased availability of home care, research commissioned for the CMA indicates that demand for continuing care facilities will surge as the demographic shift progresses.14 In 2012, it was reported that wait times for access to a long-term care facility in Canada ranged from 27 to over 230 days. It is estimated that 85% of "alternate level of care" patients in hospitals (i.e., patients who do not require hospital-level care) are in these beds because of the lack of availability of long-term care. Due to the significant difference in the cost of hospital care (approximately $846 per day) versus long-term care ($126 per day), the CMA estimates that the shortages in the long-term care sector represent an increased cost of $2.3 billion. Despite the recognized need for infrastructure investment in the continuing care sector, to date, this sector has been excluded from the Building Canada Plan. The CMA recommends that the federal government amend the criteria of the Building Canada Plan to include capital investment in continuing care infrastructure, including retrofit and renovation. Based on previous estimates, the CMA recommends that $540 million be allocated for 2016-17 (Table 3). Table 3: Estimated cost to address forecasted shortage in long-term care beds, 2016-20 ($ million)15 Forecasted shortage in long-term care beds Estimated cost to address shortage Federal share to address shortage in long-term care beds (based on 1/3 contribution) 2016 6,028 1,621.5 540.5 2017 6,604 1,776.5 592.2 2018 8,015 2,156.0 718.7 2019 8,656 2,328.5 776.2 2020 8,910 2,396.8 798.9 Total 38,213 10,279.3 3,426.4 Theme 3: Jobs As previously mentioned, Canada's aging population will produce significant changes in the labour force. There will be fewer Canadian workers, each with a greater likelihood of having caregiving responsibilities for family and friends. According to the report of the federal Employer Panel for Caregivers, Canadian employers "were surprised and concerned that it already affects 35% of the Canadian workforce."16 This report highlights key findings of the 2012 General Social Survey: 1.6 million caregivers took leave from work; nearly 600,000 reduced their work hours; 160,000 turned down paid employment; and, 390,000 quit their jobs to provide care. It is estimated that informal caregiving represents $1.3 billion in lost workforce productivity. These costs will only increase as Canada's demographic shift progresses. In parallel to the increasing informal caregiving demands on Canadian workers, Canada's aging population will also increase the demand for personal care workers and geriatric competencies across all health and social care professions.17 Theme 4: Taxation The above section focused on the economic costs of caregiving on the workforce. The focus of this section will be on the economic value caregivers provide while they take on an increased economic burden. Statistics Canada's latest research indicates that 8.1 million Canadians are informal caregivers, 39% of whom primarily care for a parent.18 The Conference Board of Canada reports that in 2007 informal caregivers contributed over 1.5 billion hours of home care - more than 10 times the number of paid hours in the same year.19 The economic contribution of informal caregivers was estimated to be about $25 billion in 2009.20 This same study estimated that informal caregivers incurred over $80 million in out-of-pocket expenses related to caregiving in 2009. Despite their tremendous value and important role, only a small fraction of caregivers caring for a parent received any form of government support.21 Only 5% of caregivers providing care to parents reported receiving financial assistance while 28% reported needing more assistance than they received.22 As a first step to providing increased support for Canada's family caregivers, the CMA recommends that the federal government amend the Caregiver and Family Caregiver Tax Credits to make them refundable. This would provide an increased amount of financial support for family caregivers. It is estimated that this measure will cost $90.8 million in 2016-17.23 Conclusion The CMA recognizes that in the face of ongoing economic uncertainty the federal government may face pressures to avoid new spending initiatives. The CMA strongly encourages the federal government to adopt the four recommendations outlined in this submission rather than further delay making a meaningful contribution to meeting the future care needs of Canada's aging population. The CMA would welcome the opportunity to provide further information and its rationale for each recommendation. 1 Statistics Canada. Generations in Canada. Cat. No. 98-311-X2011003. Ottawa: Statistics Canada; 2012. Available: www12.statcan.gc.ca/census-recensement/2011/as-sa/98-311-x/98-311-x2011003_2-eng.pdf 2 Statistics Canada. Canada year book 2012, seniors. Available: www.statcan.gc.ca/pub/11-402-x/2012000/chap/seniors-aines/seniors-aines-eng.htm 3 Finance Canada. Economic and fiscal implications of Canada's aging population. Ottawa: Finance Canada; 2012. Available: www.fin.gc.ca/pub/eficap-rebvpc/eficap-rebvpc-eng.pdf 4 Canadian Institute for Health Information. National health expenditure trends, 1975 to 2014. Ottawa: The Institute; 2014. Available: www.cihi.ca/web/resource/en/nhex_2014_report_en.pdf 5 Calculation by the Canadian Medical Association, based on Statistics Canada's M1 population projection and the Canadian Institute for Health Information age-sex profile of provincial-territorial health spending. 6 Office of the Parliamentary Budget Officer. Fiscal sustainability report 2015. Ottawa: The Office; 2015. Available: www.pbo-dpb.gc.ca/files/files/FSR_2015_EN.pdf 7 Conference Board of Canada. Research commissioned for the CMA, July 2015. 8 Morgan SG, Martin D, Gagnon MA, Mintzes B, Daw JR, Lexchin J. Pharmacare 2020: The future of drug coverage in Canada. Vancouver: Pharmaceutical Policy Research Collaboration, University of British Columbia; 2015. Available: http://pharmacare2020.ca/assets/pdf/The_Future_of_Drug_Coverage_in_Canada.pdf 9 Angus Reid Institute. Prescription drug access and affordability an issue for nearly a quarter of Canadian households. Available: http://angusreid.org/wp-content/uploads/2015/07/2015.07.09-Pharma.pdf 10 Statistics Canada. Survey of household spending. Ottawa: Statistics Canada; 2013. 11 Canadian Institute for Health Information. How Canada compares: results From The Commonwealth Fund 2014 International Health Policy Survey of Older Adults. Available: www.cihi.ca/en/health-system-performance/performance-reporting/international/commonwealth-survey-2014 12 British Columbia Pharmacy Association. Clinical service proposal: medication adherence services. Vancouver: The Association; 2013. Available: www.bcpharmacy.ca/uploads/Medication_Adherence.pdf 13 Supra at note 7. 14 Conference Board of Canada. Research commissioned for the CMA, January 2013. 15 Ibid. 16 Government of Canada. Report from the Employer Panel for Caregivers: when work and caregiving collide, how employers can support their employees who are caregivers. Available: www.esdc.gc.ca/eng/seniors/reports/cec.shtml 17 Stall S, Cummings G, Sullivan T. Caring for Canada's seniors will take our entire health care workforce. Available: http://healthydebate.ca/2013/09/topic/community-long-term-care/non-md-geriatrics 18 Statistics Canada. Family caregivers: What are the consequences? Available: www.statcan.gc.ca/pub/75-006-x/2013001/article/11858-eng.htm 19 Conference Board of Canada. Home and community care in Canada: an economic footprint. Ottawa: The Board; 2012. Available: http://www.conferenceboard.ca/cashc/research/2012/homecommunitycare.aspx 20 Hollander MJ, Liu G, Chappeel NL. Who cares and how much? The imputed economic contribution to the Canadian health care system of middle aged and older unpaid caregivers providing care to the elderly. Healthc Q. 2009;12(2):42-59. 21 Supra at note 16. 22 Ibid. 23 Supra at note 7.

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Best Practices and Federal Barriers: Practice and Training of Healthcare Professionals

https://policybase.cma.ca/en/permalink/policy11513

Date
2015-03-17
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2015-03-17
Topics
Health systems, system funding and performance
Text
The Canadian Medical Association (CMA) is pleased to present its brief to the House of Commons Standing Committee on Health for consideration as part of its study of "Best Practices and Federal Barriers: Practice and Training of Health Professionals". The subject under discussion is relevant to both parts of the CMA's mission. The CMA has undertaken considerable activity on the issue. For example, in 2012 and 2013 we participated, with the Canadian Nurses Association and the Health Action Lobby (HEAL) on the Council of the Federation's (CoF) working group on Team-based Care. For many years, the CMA has conducted the National Physician Survey, which develops comprehensive information on physician demographics and practice patterns. In the past decade a number of health professions have expanded their scopes of practice. In most provinces, for example, pharmacists can now renew prescriptions or provide emergency prescription refills. Ontario has established nurse-practitioner-led primary health care clinics which collaborate with family physicians and others in the community. Nova Scotia has experimented with using paramedics as first-contact primary caregivers in rural or remote areas. Governments expand scopes of practice for a number of possible reasons: cost-effectiveness (i.e. replacing one health professional with a less expensive one); improving access, particularly in areas underserviced by physicians; increasing convenience for patients (for example, allowing a neighbourhood pharmacist to give a flu shot may save the patient from taking time off work for a doctor's appointment): or responding to lobbying by health provider groups. The CMA believes that ideally, every health care provider should have a scope of practice that is consistent with his or her education and training, and that the health care system should enable them to practice to the fullest extent of this scope. More importantly, the scope of practice of every health professional should enable them to contribute optimally to providing high quality patient-centered care without compromising patient safety. Indeed, the primary reason for expanding the scope of practice of a health professional should be to improve Canadians' health and health care. In the following pages we will discuss several specific topics related to the Scope of Practice issue, and make recommendations for a possible federal role in supporting best practices among health professionals. 1. A Canada-Wide Approach to Scopes of Practice Scopes of practice are determined largely by provincial and territorial governments, and each jurisdiction has developed its own regulations regarding what health professional groups may do and under what circumstances. This has led to inconsistency across the country. For example, about half the jurisdictions in Canada allow pharmacists to order laboratory tests and prescribe for minor ailments; provinces vary in the degree to which they fund nurse practitioner positions; and there is wide variation in how, and even if, physician assistants are regulated. While recognizing that the authority to determine scopes of practice rests with provincial/territorial governments, CMA believes that it is desirable to work toward consistency in access to health services across Canada. Recommendation 1: that the federal government work with provincial/territorial governments and with health professional associations to promote a consistent national approach to scope-of-practice expansions 2. Promoting and Facilitating Team-Based Care The scopes-of-practice issue is closely related to the development of models for team-based care, a development that CMA supports. When Canadians seek health care today, it is mainly to help them maintain their health or to manage chronic diseases. This trend is expected to continue as the population ages and the rate of chronic disease rises correspondingly. For patients who have multiple chronic diseases or disabilities, care needs can be complex and a number of different health and social-services professionals may be providing care to the same person. A patient might, for example, be consulting a family physician for primary health care, several medical specialists for different conditions, a pharmacist to monitor a complex medication regime, a physiotherapist to help with mobility difficulties, health care aides to make sure the patient is eating properly or attending to personal hygiene, and a social worker to make sure his or her income is sufficient to cover health care and other needs. The complexity of today's health care requires that the system move away from the traditional "silo" method of delivering care and encourage health professionals to work collaboratively to effectively meet patients' needs. The CMA believes that the following factors contribute to the success of inter-professional care: Patient access to a primary care provider who is familiar with the patient's needs and preferences, and has responsibility for the overall care of the patient, co-ordinating the various providers involved in this care. For more than 30 million Canadians, that primary care provider is a family physician. The College of Family Physicians of Canada believes that family practices can serve as patient's "medical home," in which care is anchored and co-ordinated by a family physician, with access to other health care providers as required. Mechanisms that encourage collaboration and communication among providers. These include: o Interdisciplinary primary care practices, such as Family Health Networks in Ontario, which permit patients to access a variety of different health professionals and their expertise from one practice setting; Widespread use of the electronic health record, which can facilitate information sharing and communication among providers. A smooth, seamless process for referral from one provider to another. Role clarity and mutual trust. Each health professional on a care team should have a clear understanding of their own roles and the roles of other team members. The CoF's Team-Based Care Working Group investigated the critical factors for successful team based care, and identified models in certain provinces that it believed should be considered for rollout across Canada. This rollout could be enhanced if it were encouraged by all governments, including the Government of Canada. In the past, Health Canada has supported demonstration projects in health system reform through the National Primary Care Research Group. The CMA believes that the federal government could take a similar role in future, in supporting and disseminating promising models of inter-professional practice. The dissemination process should be accompanied by a process to rigorously evaluate the effect of such models on health outcomes, quality of patient care, and health care costs. Recommendation 2: that the Government of Canada support research into and evaluation of innovative models of team-based care, and actively promote the dissemination of successful models nationwide. Recommendation 3: that Canada Health Infoway work with provinces and territories to increase the adoption of electronic medical records at the point of care and build connectivity among points of care. 3. A Health-Care System That Supports Best Practices in Team-Based Care We have already discussed the part that governments could play in identifying, disseminating and evaluating models of inter-professional practice. The health care system's planners, funders and managers can also foster team-based care in other ways, such as: Promoting education in inter-professional care. As the Committee has heard, the Association of Faculties of Medicine of Canada's guiding principles for medical education include valuing inter-professionalism and incorporating it into residency learning and practice. CMA encourages the development of programs to help new physicians and other health professionals acquire the skills needed to function optimally an in inter-professional setting. Improving access to health services not funded under the Canada Health Act. At present, patients who do not have private health care coverage must pay out of pocket for physiotherapy, dietitian services, mental health care and most social services. This works against the principles of inter-professional care by hindering access to necessary services; this could compromise patient health and safety. Undertaking an open and meaningful consultation process when changes to scopes of practice are proposed. CMA's experience has been that physicians are more accepting of changes in other professions' scopes of practice if their medical associations have been involved in negotiation on these changes. Ensuring that the supply of health professionals in Canada is sufficient to the needs of Canadian patients, by developing, implementing and monitoring human resource plans for all major health professions. Recommendation 4: that the federal government work with provincial/territorial government and national health professional associations to develop and implement a health human resources plan that ensures Canadians' access to all appropriate health care providers. In conclusion, the Canadian Medical Association recognizes that the great majority of decisions regarding scopes of practice are made at the provincial/territorial level. But we believe that in order to encourage a Canadian health-care system in which all providers work together, contributing their unique skills and expertise to providing patient-centered, seamless, cost-effective care, the support and encouragement of the federal government will be extremely beneficial.

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Brief to the House of Commons Standing Committee on Finance 1995 Pre-Budget Consultation

https://policybase.cma.ca/en/permalink/policy1994

Last Reviewed
2019-03-03
Date
1994-11-18
Topics
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1994-11-18
Topics
Health systems, system funding and performance
Text
I. PURPOSE While Canada is undergoing significant social, political and economic change, the Canadian Medical Association (CMA) remains committed to the delivery of high quality health care and to safeguarding the national integrity of the health system. However, given the need for the federal government to gain control over our deficit and national debt, it seems clear that putting Canada's fiscal house in order remains a high priority. In this regard, CMA appreciates the invitation to submit its views on the 1995 pre-budget consultations that are underway. One overriding objective of the brief is to provide the Committee with a better understanding of the current pressures on physicians across Canada that have arisen as a direct result of past government decisions in this area. It is our firmly-held position that the health care system in general, and the medical profession in particular, have paid more than their fair share in terms of contributing to debt management. This brief focusses on five somewhat distinct areas of concern to Canadian physicians: (1) federal health transfers to the provinces; (2) taxable health benefits; (3) the goods and services tax (GST); (4) Registered Retirement Savings Plan (RRSP) contributions, and (5) the Lifetime Capital Gains Exemption (LCGE) for Small Businesses. In each case, the brief contains specific recommendations as to what the government should do, and more importantly what the government should not do, to balance its short-term deficit reduction targets against longer-term Canadian values. To summarize, good health policy and prudent economic policy go hand-in-hand provided the principles of fairness and good management practices are observed. If change is to come within an overall policy framework that is strategic, coordinated and fair and which preserves (or augments) the integrity of Canada's health care system, it behooves us to avoid short-term, stop-gap initiatives. As the government's 1994 Throne Speech put it "...the agenda of the government is based on an integrated approach to economic, social, environmental and foreign policy". Accordingly, in establishing an appropriate fiscal framework for health, change must take place within the context of a longer-term integrated view. II. BACKGROUND...."Medicare Is A Shared Value" Canada's system of universal health insurance is still one of the best in the world. Experts from around the world travel many thousands of miles to study and, in some cases, emulate our system. For most Canadians, medicare is a highly cherished, integral component of our social fabric. While Medicare's popularity has not diminished over the past 30 years, it is sometimes taken for granted in these difficult economic times. Recent public opinion surveys indicate that 84% of Canadians (with the highest response in Quebec) see medicare as a defining characteristic of being Canadian. Furthermore, 84% of Canadians are of the opinion that the system provides high quality care. 1 At the same time, however, 65% of Canadians are concerned about continued accessibility to a full range of publicly-financed benefits. According to the same poll, 83% of Canadians see current financing of the system as being "unsustainable" over the longer-term 2 and they are right. As much loved as the Canadian medicare system is, there is a large and growing consensus that we need to make changes. This brief is not about maintaining the status quo. Rather, it is about managing the changes required in the long-term best interests of all Canadians and of the physicians who are ultimately responsible for serving those interests, subject to the fiscal realities confronting government. III. CONSIDERATIONS CMA acknowledges that there is a pressing need, now more than ever, for the federal government to balance a number of competing social and economic policy challenges. In a time when deficit reduction measures are required, all segments of society are being asked to do more with the same or less. Health care is no exception, having done so for quite some time. At the same time, we must re-evaluate the variety of services provided or paid for by government. Deficit Management, but at what Costs? As of 1993/94, Canada's net public debt stood at $508.2 billion, or $17,484 for every Canadian. Combined with the debts of the provinces and territories, our national debt is in excess of $700 billion. Not to understate the case, currently one-third of each revenue dollar the government collects is allocated to debt service payments on the federal debt. 3 CMA believes enough is enough: we must not pass this burden on to future generations of Canadians. The federal government has managed to run operating surpluses for five of the past seven years. 4 While this is necessary it is no longer sufficient to meet our fiscal challenges. Maintaining the status quo would mean that debt service payments would further crowd out government expenditures at an accelerated rate. While the government's first priority should be to get us "out of hock", there is an equally- compelling need to respect the longstanding and fundamental principle of fairness/equity that help define Canadian society. One step toward meeting these twin objectives is to consider all possible methods of repatriating that portion of the national debt held by the international lending community. Some experts have argued that Canada, as a country, can no longer afford to have "massive leakages" in interest payments to individuals/countries abroad. 5 In so doing, we would also repatriate our ability as a sovereign nation to set and maintain social policy objectives. This involves guarding against the persistent "tyranny of the deficit" and the influence that international bond rating agencies can exert on the economy. Facts and Fallacies about Health Spending In reviewing expenditures in the public sector, some would suggest that health and health care spending are "out of control". This is a myth. While it is true that Canada spends 10.0% (1993) of Gross Domestic Product (GDP) on health care (second highest among OECD countries), the reality is that the public sector share of total health care expenditures has fallen from 76.4% in 1975 to approximately 71.9% in 1993 6 (falling to the lowest third of OECD countries). This process of reducing real public sector expenditures, in the absence of a well-coordinated and planned framework, has not always been in the best interests of health and health care. Specifically, federal offloading in terms of unilateral reductions in health cash transfers to the provinces have been followed by: * the elimination of entire programs, such as dental insurance programs for children and universal drug insurance programs; * hospital closures (e.g., 52 hospitals in Saskatchewan); * massive regionalization of health programs and the attendant disempowerment of community hospital boards; * the reduction of total bed capacity by as much as 20% in some provinces; * the reduction in medical school enrolment by 10% and a planned 10% reduction in post-MD residency slots; * global medical care expenditure caps in virtually every province in Canada; * individual physician income thresholds in at least five provinces; * a moratorium on interprovincial mobility of physicians; * legislative overrides of duly-negotiated contracts for health care providers; * widespread restrictions on the operation of high technology equipment; and * the de facto "expropriation" of physician business practices without compensation (e.g., Saskatchewan pathologists). These repercussions also serve to underline the fact that change is the only constant in the health care system. Many physicians across the country have expressed concerns that such changes or "threats" to our health care system are already beginning to have serious consequences for individual patients in terms of access to needed medical facilities. If the national integrity of medicare is to survive, federal fiscal policy changes must be assessed within a larger and longer-term framework; one that respects the need for innovation and professionalism in the health care system. Physicians as Responsible Professionals Some mistakenly argue that physician expenditures are responsible for the increasing costs to the health care system. The reality is that physician expenditures as a proportion of total health care expenditures in Canada have declined from 15.7% in 1975 to 15.1 in 1991. 7 Furthermore, physician expenditures constitute a declining share of GDP. Given the recent round of unilateral reductions in medical care spending in many jurisdictions, this percentage share will continue to drop significantly as more recent data become available. As health care resources have become increasingly constrained, physicians have taken on added responsibilities at the macro, meso and micro levels to better manage our health resources. * At the "macro" level, within the provinces and territories, the medical profession has been engaged in formalized consultation structures known as "Joint Management Committees" or "Administrative Councils" with government and other stakeholders to ensure value for money within a diminishing "real" globe of publicly-available resources for health care. * At the "meso" or institutional level, physicians are working hand-in-hand with health care administrators and other community stakeholders to "rationalize" services so as to provide the best value for money in all areas. In addition, to give a greater voice for choice and improve overall accountabilities in the system, physicians are providing formal input to governments that are looking to regionalize health system operations. * At the "micro" or clinical level, physicians have been taking the lead in developing and disseminating clinical practice guidelines (CPGs) to ensure that the care provided is both appropriate and cost-effective. More can and is being done, in collaboration with government, to ensure responsible use of the taxpayer's dollar while meeting the needs of individual patients. At all levels, physicians will continue to involve themselves as capable and responsible professionals. As the health policy agenda continues its rapid pace, physicians and the organizations that represent them should be viewed as "agents" for, rather than "objects" of, change. Good Health Policy Means Good Economic Policy Agencies such as the World Economic Forum, 8 tell us that our system of financing health care is one of Canada's greatest assets in competing in the new world economic order. We should heed this advice, as the Prime Minister recently observed. Compared to the United States, this economic advantage takes the form of 30 percent lower health spending (measured as a percent of GDP or in per capita expenditures) while providing for universal medical benefits and high quality care. In terms of our European trading partners, the fact that health insurance programs are financed primarily through consolidated revenues (rather than employment-based taxes), also confers a unit cost advantage to Canadian exporters. In this sense, good health policy and good economic policy should be mutually reinforcing. Aside from the complementary nature of the relationship between health and the economy, this fundamental concept also suggests that we need to take a longer-term, more integrated and more strategic approach to managing our collective debt and debt-servicing challenges. The federal government can no longer simply shift its financial obligations onto the backs of lower levels of government or individual Canadians without consultation or advance notice. We need to re-evaluate the full range of government- provided or -funded services. Again, however, if federal fiscal reductions are to take place, the principles of fairness and equity must begin to guide the development of sustainable economic and health policies. While there are no doubt trade-offs that can and must be made, if the price of getting our fiscal house in order is losing a national treasure - i.e., our health care system, it is a price too high to be paid. To summarize, we have set out a series of principles that should serve to guide the Committee in its decision-making, they are: * take the longer-term view; * adopt a system-wide, integrated approach for fiscal management; * strive for a strategic approach that mutually reinforces health and economic policies; and * strengthen the fundamental foundation of fairness and equity. These four principles form the building blocks of the remainder of CMA's submission. IV. ISSUES Canada is at a social, political and economic crossroad. The challenge to this Committee and to this Government is to balance short-term fiscal pressures against the longer-term need to re-position Canada to take advantage of economic opportunity while preserving that which is of fundamental importance to Canadian society as a whole. As the Committee looks to striking the right balance, there are five specific areas of concern that the CMA wishes to bring to your attention on behalf of the Canadian medical profession. The Temptation to Reduce Federal Health Transfers CMA commends this Government for exempting EPF health transfers from the extended freeze that was applied to other provincial transfer programs in its spring 1994 budget. We would have been surprised had this Government done anything else, given that medicare is the "Liberal legacy" of the 1960s and given the Liberal Party's consistent opposition to the previous government's "policy by stealth" (i.e., Bill C-69; Bill C-96). The fact is that medicare's contribution to getting our "fiscal house in order" is already large and continues to grow. In specific terms, the Committee will know that over the 1986/87 to 1995/96 fiscal period, it is estimated that $42.108 billion will have been removed via reductions in Established Program Financing for health and post-secondary education. For health alone, over $30 billion will have been removed from the system by fiscal year 1995/96. 9 Even with a resumption of GNP minus three percent growth formula in per capita EPF entitlements for health, beginning next spring, reduced cash contributions to medicare programs will continue to contribute to the attainment of the government's fiscal targets. Given the unprecedented health reforms taking place across the country, Canadians and the health care system can ill afford another federal fiscal shock. The system is already balkanizing, with poorer regions not being able to fiscally sustain some basic health care benefits. Any further acceleration in the rate of reduction in federal cash transfers will all but assure the demise of the national integrity of medicare programs. Moreover, any further reductions in federal health-related cash transfers will: (1) significantly hamper or stall the work of the newly-created National Health Forum; (2) further reduce the capacity for enforcement of national health principles under federal law; (3) exacerbate health-related problems of dealing with child poverty and problems of reducing health inequalities by socio-economic class; and (4) increase other areas of federal direct program expenditures in the context of renewed efforts to provincial program "uploading" (e.g., Canada Pension Plan Disability Program). A propos of health and economy going hand-in hand, it is useful to remind ourselves of the importance of maintaining the comparability of health benefits across Canada in terms of promoting regional development, shared opportunity and efficient resource allocation. Poor regions of this country are already finding it difficult to compete for scarce new business investment capital. The implications of competing from a more uneven playing field in terms of being able to offer only "bare bones" publicly-financed health benefits will further widen the gap between the "have" and "have not" provinces. It is for these reasons that the CMA joins with other national health organizations 10 in recommending the following: 1. THAT THE FEDERAL GOVERNMENT AVOID FURTHER CUTS TO THE EPF HEALTH TRANSFER AND LOCK IN THE CASH PORTION; 2. THAT THE FEDERAL GOVERNMENT NEGOTIATE A STABLE FIVE-YEAR FUNDING ARRANGEMENT WITH THE PROVINCES/TERRITORIES; 3. THAT THE FEDERAL GOVERNMENT MUST ENSURE THAT ACCOUNTABILITY OF THE HEALTH TRANSFER BE SEPARATE AND EXPLICIT. Taxable Health Benefits Canadians have already been dealt one blow with the increasing de-insurance of health care services (e.g., reduction of out-of-country benefits to an unfair and dangerous level, elimination or reduction in drug benefit programs). In the context of funding those services that remain public benefits, only the cruellest government would strike yet another blow to individual Canadians and to Canadian business by taxing the very benefits that taxes were raised to pay. If implemented, this proposal would be tantamount to nothing less than double taxation. Fairness and equity would suggest that the government should be doing more, not less at the legislative and regulatory levels to promote the availability of private health insurance benefits in areas increasingly vacated by government cutbacks. This is why CMA makes the following recommendation: 4. THAT THE CURRENT FEDERAL GOVERNMENT POLICY WITH RESPECT TO NON-TAXABLE HEALTH BENEFITS BE MAINTAINED; Goods and Services Tax (GST) When the GST was introduced in 1991, preoccupation with implementation issues resulted in a number of fundamental injustices at the micro level. One such injustice was dealt to the medical profession. Physicians, like other Canadians, expect to pay their fair share of taxes. We do not however, accept what essentially amounts to double taxation. Physicians in practice in Canada are in the unique, unenviable and unfair position of being forced to absorb all the GST on business inputs. Unlike all other professions, physicians are precluded from being able to pass on the tax to consumers (with provincial health insurance plans as payment in full) or from claiming input tax credits (ITCs) since insured medical services are deemed to be "tax exempt". Unlike other professions, physicians cannot claim input credits for the imputed taxes associated with providing needed medical care. In fact, all of the following health professionals are capable of recouping from patients the GST paid on inputs because their revenues are not restricted by government: dentists; optometrists; chiropractors; physiotherapists; chiropodists; osteopaths; audiologists; speech therapists; occupational therapists and psychologists. Physicians are still angrily awaiting remedial steps to correct this injustice. To be clear, CMA is not asking for preferential treatment for Canadian physicians. What we want is the same fair and equitable treatment from the federal government accorded to other self-employed professional groups. Like physicians, other professions are purchasing inputs and paying GST; but unlike physicians, they are able to recoup the GST. Given this oversight in the legislation and regulations, physicians have already been asked to pay (over and above the GST paid by other professional groups) a cumulative total of $250 million since its introduction of the tax in 1991. The magnitude of this tax paid is not in dispute (as a result of a study prepared by KPMG). While the direct effects of the GST are significant and measurable, the indirect effects are even more significant though less measurable. It is estimated that the 55,000 physicians in Canada employ up to 100,000 Canadians. Given the disproportionate effects of the GST on the medical profession as employers, the employment dampening could be at least as high as 1,000 full-time jobs lost. In addition, the tax-induced distorting effects in terms of efficient resource allocation in the health care system cannot be measured, but are thought to be significant. A goal of health reform in many parts of the country is to move care services out of institutions and into the community. Current federal GST policy, by taxing supplies in a clinical practice setting but not in a hospital setting, acts to discourage this shift in emphasis. No other issue in recent years has raised the ire of individual practitioners as much as the imposition of this most unfair and inequitable tax on business inputs. Understanding that the Minister of Finance is in the process of consulting with the provinces as to the nature of a replacement tax for the GST, we are confident that this oversight will be remedied. In the interests of fundamental fairness/equity and allocative efficiency, CMA respectfully recommends the following: 5. THAT THE COMMITTEE WORK TO ENSURE THAT CANADIAN PHYSICIANS, AS SMALL BUSINESSES, PAY NO MORE THAN OTHER PROFESSIONS UNDER ANY REPLACEMENT TAX FOR THE GST; 6. THAT ALL TAXES ON BUSINESS EXPENSES BE FAIRLY AND FULLY REMOVED UNDER ANY REPLACEMENT TAX FOR THE GST; 7. THAT IF ANY REMEDIAL STEPS ARE TAKEN TO ENSURE NO TAXES ARE LEVIED ON BUSINESS INPUTS, THESE BE APPLIED UNIFORMLY ACROSS ALL EXEMPT SERVICES. Registered Retirement Savings Plan (RRSP) Canadian physicians, while receiving a large proportion of their professional earnings from the public sector (94%), do not benefit as self-employed individuals from defined benefit plans or from publicly-financed pension benefits that accrue to employed professionals. They, like other self-employed individuals, must plan and fund their own retirement. Fairness/equity once again demands that there be symmetry between money-purchase (MP) and defined-benefit (DB) retirement plans. This is all the more important for physicians because of their compressed period of lifetime earnings in relation to other groups. This Committee will have heard various calls for either reducing the annual contribution limit or taxing assets within RRSPs. Such arguments are both specious and patently unfair. Both propositions potentially involve double taxation. Experts both within and outside government argue, quite correctly, that the current policy be maintained, and that equity between employees and the self-employed before the taxman be assured. It is for these reasons, that CMA has led an unprecedented alliance for the preservation of retirement savings, and recommends the following: 8. THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT; 9. THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE; 10. THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. Lifetime Capital Gains Exemption (LCGE) for Small Businesses Most Canadian physicians are independent, self-employed practitioners. As such, they have the ability if they are incorporated to claim the LCGE when they sell their practices. Over time, several provinces have accorded physicians the right to incorporate (e.g., Prince Edward Island, New Brunswick, Alberta, British Columbia, and the Yukon Territory), in other jurisdictions, physician incorporation is under active review (e.g., Nova Scotia, Quebec, Ontario and the Northwest Territories). While physicians have benefited from incorporation on a limited basis, this issue takes on added importance when one considers the "national" move towards incorporation allowing a greater number of eligible physicians to claim the LCGE. Recent health reforms have also underscored the importance of maintaining the current policy. Previously, physicians were free to move their practices from one location to another to meet the changing health needs of Canadians. Over the past two years, provincial governments have moved to restrict inter-provincial mobility of physicians and indeed mobility within any given province or territory. These "barriers" not only restrict the number of new entrants into the system in addition to those who wish to move to other areas of the country, but also can be thought of as increasing the capitalized value of established practices. Indeed, with the advent of regional physician resource plans across Canada, the cost of establishing a new practice can be expected to continue to grow at an unprecedented rate. So while some physicians have yet to claim the LCGE, it is reasonable to think that they will some time in the future. As the health needs of Canadians change, and as people move, medical care services will have to respond accordingly. The elimination of the LCGE, by significantly increasing the purchase price of a new medical practice, unnecessarily and unfairly raises additional economic barriers to shifting practices in response to changing community health needs. CMA therefore recommends: 11. THAT THE FEDERAL GOVERNMENT MAINTAIN THE CURRENT POLICY FOR THE LIFETIME CAPITAL GAINS EXEMPTION FOR SMALL BUSINESSES. V. TRADE-OFFS To summarize: in broad terms the health care sector has already paid its fair (and to a larger extent unfair) share. Everyone who has appeared before this Committee will argue that cuts should not occur in their backyard. They can't all be right! The government of Canada must decide where its priorities lie over the longer-term. Deficit reduction targets can no longer be met by simply chipping away at the full range of federally-sponsored programs. The national integrity of national health insurance programs, given their importance to Canada's economic, social and political future must be on the short list of safeguarded social programs. If further reductions in federal health transfers are deemed appropriate, the Committee should be prepared to publicly acknowledge that the principles of universality or comprehensiveness (i.e., the choice between covering everyone versus everything) will have to be fundamentally re-examined. Given the degree of support for the universality principle, if the federal government is serious about further reducing its direct or indirect contributions to health, then it must reconsider the range of core benefits that will be made available to Canadians. In fact, we may now have reached the point where we need to get back to basics; reminding ourselves of the original medicare promise, which was to protect Canadians from the spectre of personal bankruptcy associated with large and unexpected health care bills. Not to pay the day-to-day ("grocery") bill of health care. The recently-announced National Health Forum, chaired by the Prime Minister, will provide an important opportunity to assess the breadth and depth of publicly-financed health care. The contribution of medicine to the health of Canadians and to the economy is just too important to be traded off. Physicians are still feeling the "aftershocks" of recent federal fiscal decisions. They have also had to absorb sharp unilateral reductions at the provincial level. The provinces of Nova Scotia, Prince Edward Island and Alberta - to name only three - have disproportionately singled out the medical profession on a net earnings basis in decreasing health funding. Taken together, these fiscal forces could trigger an unprecedented exodus of physicians from Canada. As governments move to restrict the ability of physicians to provide needed medical care, CMA is increasingly concerned about the growing number of physicians who are being actively recruited by the United States, and those who feel they have no alternative but to leave the country. At a macro level, we as a society, must recognize that we are in a North American labour market, and as such, each physician heading south represents both a short-term pain and long-term pain. VI. SUMMARY OF RECOMMENDATIONS The CMA offers the following recommendations to the Committee in its deliberations: 1. THAT THE FEDERAL GOVERNMENT AVOID FURTHER CUTS TO THE EPF HEALTH TRANSFER AND LOCK IN THE CASH PORTION; 2. THAT THE FEDERAL GOVERNMENT NEGOTIATE A STABLE FIVE-YEAR FUNDING ARRANGEMENT WITH THE PROVINCES/TERRITORIES; 3. THAT THE FEDERAL GOVERNMENT MUST ENSURE THAT ACCOUNTABILITY OF THE HEALTH TRANSFER BE SEPARATE AND EXPLICIT. 4. THAT THE CURRENT FEDERAL GOVERNMENT POLICY WITH RESPECT TO NON-TAXABLE HEALTH BENEFITS BE MAINTAINED; 5. THAT THE COMMITTEE WORK TO ENSURE THAT CANADIAN PHYSICIANS, AS SMALL BUSINESSES, PAY NO MORE THAN OTHER PROFESSIONS UNDER ANY REPLACEMENT TAX FOR THE GST; 6. THAT ALL TAXES ON BUSINESS EXPENSES BE FAIRLY AND FULLY REMOVED UNDER ANY REPLACEMENT TAX FOR THE GST; 7. THAT IF ANY REMEDIAL STEPS ARE TAKEN TO ENSURE NO TAXES ARE LEVIED ON BUSINESS INPUTS, THESE BE APPLIED UNIFORMLY ACROSS ALL EXEMPT SERVICES. 8. THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT; 9. THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE; 10. THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. 11. THAT THE FEDERAL GOVERNMENT MAINTAIN THE CURRENT POLICY FOR THE LIFETIME CAPITAL GAINS EXEMPTION FOR SMALL BUSINESSES. _______________ 1 The Angus Reid Group, The Reid Report. Vol. 8, No. 7, July/August, 1993 and Vol. 8, No. 8, September, 1993. 2 Ibid. 3 Agenda: Jobs and Growth: Creating A Healthy Fiscal Climate (The Economic and Fiscal Climate), Department of Finance, October 1994. 4 Economic and Fiscal Reference Tables, Department of Finance, September 1994; Annual Financial Report of the Government of Canada, Fiscal Year, 1993/94. 5 Valaskakis K.: The Debt Monster, Montreal Gazette, November 5, 1994. 6 National Health Expenditures in Canada, 1975-1993. Health Canada. 7 Ibid. 8 World Economic Forum 1991: The World Competitiveness report 1990, Institut pour l'étude des méthodes de direction de l'entreprise, Lausanne, Switzerland. 9 Thomson A 1991: Federal Support for Health Care: A Background Paper. Health Action Lobby, Ottawa, June 1991. 10 See the 1995/96 Pre-Budget Submission to the Standing Committee on Finance by the Health Action Lobby (HEAL), November 15, 1994.

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CMA & CNA Letter on the Future Mandate of the Health Care Innovation Working Group (the Council of the Federation)

https://policybase.cma.ca/en/permalink/policy11477

Date
2015-01-22
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
  1 document  
Policy Type
Parliamentary submission
Date
2015-01-22
Topics
Population health/ health equity/ public health
Health systems, system funding and performance
Text
Re: Future Mandate of the Health Care Innovation Working Group (the Council of the Federation) Dear Premiers: On behalf of the Canadian Nurses Association (CNA) and the Canadian Medical Association (CMA), I am writing in advance of the meeting of the Council of the Federation later this month regarding the future mandate of the Health Care Innovation Working Group with respect to seniors care. The CNA and CMA welcomed the Council of the Federation's prioritization of seniors care as an area of focus of the Health Care Innovation Working Group. Already, seniors and their families in communities across Canada face significant challenges accessing social supports and health services. These challenges will only intensify as the demographic shift progresses. Based on current trends and approaches, the proportion of provincial/territorial health spending associated with seniors care is forecast to grow by over 15% to almost 62% of health budgets by 2036. Recognizing the significant pressure this will present for health care systems and provincial/territorial budgets moving forward, it is critical that the Council of the Federation maintain its prioritization of seniors care and meeting the needs of an aging population. As such, we respectfully encourage you in your capacity as Co-Chairs of the Health Care Innovation Working Group to ensure the future mandate of the working group on seniors care be included as part of the agenda at the January 30, 2015 meeting of the Council of the Federation. The CNA and CMA are actively engaged on this issue and welcome the opportunity to meet with each of you to discuss how we may collaborate to ensure improved health outcomes for seniors, now and in the future. Sincerely, Christopher S. Simpson, MD, FRCPC, FACC, FHRS CMA President Karima Velji, RN, PhD, CHE CNA President

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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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Registered retirement savings plans : Presentation to the House of Commons Standing Committee on Finance

https://policybase.cma.ca/en/permalink/policy1996

Last Reviewed
2019-03-03
Date
1994-11-17
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Last Reviewed
2019-03-03
Date
1994-11-17
Topics
Physician practice/ compensation/ forms
Text
Millions of Canadians are planning for their retirement relying on Registered Retirement Savings Plans (RRSPs) and private pension plans, either as their only future retirement income or to supplement the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP). Approximately 5 million contribute to RRSPs. Another 3.7 million participate in registered pension plans (RPPs). Some are independent business people, others work in family businesses. Some are self-employed or work for organizations that have opted for RRSPs instead of RPPs. Our Alliance is representative of this Canadian diversity. The objective of the Alliance is to maintain the current provisions of the Income Tax Act (the Act) and Income Tax Regulations (the Regulations) governing retirement savings. The current system is fundamentally good for the economy of Canada, and any changes made for short term deficit reduction will ultimately harm the economy in general and small and medium-sized business, in particular. Research shows that RRSPs are an important tool for small business retirement planning. Only in recent years have limits been adjusted to bring similar protection to those afforded under RPPs. We have only just started to achieve a measure of equitable treatment for the retirement savings of the self-employed and employees not protected by employer pension plans. The current system provides for the harmonization of all tax-assisted retirement savings arrangements, which will only be achieved when the limits on money-purchase arrangements (including RRSPs) attain the equivalent limits already set for defined-benefit arrangements, such as employer pension plans. Changes to RRSPs alone will discriminate against the self-employed and against employees without employer pension plans. These Canadians form the majority of the workforce now and in the future. Arguments in favour of changes to the current system are based on two assumptions: firstly, that Canadians are saving sufficient income for their retirement and will continue to do so regardless of tax increases; and secondly, that the cost to the Government in lost tax revenues is enormous. Neither of these assumptions is valid. Background The fiscal theory underlying retirement savings is decades old. Contributions to registered plans are deductible and all earnings are exempt from tax until benefits are paid out from those plans. In essence the retirement savings system consists of a deferral of tax on contributions and earnings. The pension tax reform of 1989-1990 does not change the underlying fiscal theory. It aims to achieve equity between the employed and the self-employed and between defined benefit arrangements and money-purchase arrangements (including RRSPs). That equity was achieved by phasing in a higher contribution limit for money-purchase arrangements so that they could, in the future, provide a retirement income comparable to that furnished by a defined benefit arrangement. This objective of achieving equivalence permeates the Act and the Regulations and has resulted in a substantial and continuing realignment of retirement savings arrangements in Canada. That realignment, with its attendant compliance costs, borne by employers and employees, was based on the acceptance of the premises behind pension tax reform, which acceptance Canadians have demonstrated. This realignment had a gestation period of over 5 years. 1 From the 1984 federal budget, which sought complete equity but with massive compliance costs, to the 1985 federal budget, which sought lesser compliance costs but with diminished equity, there issued pension tax reform, which yields substantial equity with substantial compliance costs. The Auditor General, in his 1988 report, estimated that pension tax reform would necessitate $330 million in start-up costs and $15 million in annual reporting costs. The Department of Finance disagreed and estimated that start-up costs would be from $60 to $70 million and that the annual reporting costs would be between $10 and $15 million. The independent consultant's report, upon which the Auditor General's report was based, had said that the start-up costs would be $395 million. Accordingly, Canadians have already borne many of the costs of retooling the retirement savings system and will continue to do so. Having paid those costs, surely Canadians are entitled to the measure of equity that the system promises. Governing Principles There are disquieting rumours about possible changes to the current retirement savings system. As yet, the government has said little on this issue, other than to say that the retirement system is not inviolable. The Alliance seeks to maintain the status quo. We should, therefore, deal with the principles that underlie the current system, and which continue to hold true: internal fairness and the accumulation of sufficient retirement income. Internal Fairness The current system was reformed to deliver internal fairness - if not quite yet, by 1996. It allows individuals to accumulate a pre-determined amount of private retirement savings. Taxpayers may, on a tax-assisted basis, earn a lifetime pension at the rate of $1,722 per year. In other words, an employee with 35 years of service may be entitled, on retirement, to an annual lifetime pension of $60,270. That level of tax assistance has been available to members of defined benefit plans since 1977. It has been frozen at that level since that time and will remain frozen until 1996. The money purchase limits, including RRSP limits, have been phased in to eventually provide equivalent benefits. Accordingly, the annual RRSP limits, when fully instituted in 1996, will allow the self-employed to accumulate retirement savings equivalent to those of members of defined benefit plans. Thus, one of the rationales underlying the current retirement savings structure is to eliminate the earlier discrimination against the self-employed. The self-employed will now be allowed to achieve retirement savings equivalent to those available to employees. RRSPs are not an isolated program under the Act, but rather an integral component of an indissoluble whole. Accumulation of Sufficient Retirement Income The limits set by pension tax reform are intended to provide a level of retirement income that will allow retired individuals to maintain their standard of living. It is generally felt that a retirement income equal to about 60-70 percent of pre-retirement income should not result in a marked change in one's standard of living. Increasingly, it appears that individual taxpayers will need to rely more on private retirement savings and less on public programmes. It is important, therefore, that the tax system permit the accumulation of retirement savings sufficient to allow taxpayers to maintain their pre-retirement standard of living. Indeed, it does not appear possible for money-purchase arrangements to reach, in most cases, the replacement ratio of 60 to 70 percent. Consider the following example. 2 Let us consider two taxpayers earning $50,000 and $100,000 respectively, in 1993 who maximize their contributions to RRSPs. What replacement income ratio can these taxpayers attain? Assume that the taxpayers are married and that the annuity to be purchased from the RRSP, at retirement, has the following characteristics: post-retirement indexation at 3% per annum with a spousal survivor benefit of two-thirds. 3 The results of this hypothetical are: [TABLE CONTENT DOES NOT DISPLAY PROPERLY. SEE PDF FOR PROPER DISPLAY] RRSP as a percentage of final year's salary at a 1993 salary of $50,000 ($100,000) Retirement Age Savings Start Age 25 35 45 55 41.0% (31.6%) 24.7% (19.0%) 11.2% (8.6%) 60 54.4% (41.9%) 35.1% (26.7%) 19.0% (14.6%) 65 72.2% (55.7%) 48.8% (37.6%) 29.4% (22.6%) [TABLE END] The above table indicates, for example, that a 35-year old earning $50,000 in 1993 can, at most, earn a pension from an RRSP equal to 48.8% of his final year's income, if his retirement commences at age 65. In other words, after 30 years of working and saving, that individual will have a retirement income of less than half of his pre-retirement income. This is below the income replacement threshold assumed by pension tax reform itself. For the taxpayer earning $100,000 in 1993, his RRSP pension will be 37.6% of this pre-retirement income. The only individual who attains an adequate replacement ratio, on these assumptions, is the 25-year old who saves for 40 years. It follows that, although the pension tax system espouses equivalence with the defined benefit pension plan, it does not attain it in practice. Inequities in the Current System In the current North American context, the limits of Canadian tax assistance for retirement savings are not generous. The equivalent money purchase and defined benefit limits for the United States, for example, are more than twice as generous as the Canadian limits. In addition, the Canadian system does not provide for deferrals of salary, as does the United States system. Furthermore, inequities exist in the provision of supplementary retirement benefits. Supplementary benefits are those in excess of the $60,270 benchmark pension discussed above. They also include benefits that the Regulations, and the Department of National Revenue, do not allow to be paid from a registered pension plan. Servants of the people, such as Members of Parliament and Members of Provincial Legislatures, benefit from the privileged status of the payor of the pension, in that security of the pension promise is not an issue. Self-employed individuals and ordinary employees, on the other hand, must be concerned with the funding of their pension promise. Requirement for Informed and Thoughtful Debate In the early 1990s, annual contributions to RRSPs and RPPs exceeded $33 billion. Trusteed pensions, not including consolidated revenue fund plans, held $235 billion in assets at the end of 1992. The book value of the assets of such plans stood at $268 billion at the end of the first quarter of 1994. RRSP assets, not including self-directed plans, totalled $147 billion at the end of 1992. In his discussion paper entitled Creating a Healthy Fiscal Climate: The Economic and Fiscal Update, released October 18, 1994, the Minister of Finance has indicated that the tax expenditure associated with all retirement savings for 1991 was $14.9 billion. It is not surprising, therefore, that the Department of Finance should cast a covetous eye at the retirement savings system. We are concerned that a search for easy sources of revenue might prompt the government to change the existing rules in the Act governing retirement savings. It is submitted, however, that changes to the system, although fiscally attractive in the short term, would be detrimental to Canadian taxpayers in the long run. Deficit reduction should not be the sole motivating factor for change to the retirement savings system. The existing complex web of rules governing retirement savings should only be touched if there are compelling reasons, unrelated to immediate deficit reduction, to effect change. This is particularly so given the recent and unfinished reform of retirement savings arrangements in this country. It is clear that this debate has not yet begun and cannot be completed before the next federal budget. The prudent approach, therefore, is to defer any change to the retirement savings system until that debate has taken its course. A Framework for the Debate The following parameters should govern any consideration of the changes to the retirement savings system. 1. The Principle of Even-Handedness It is clear that all components of the retirement savings structure are interrelated. As a result, it would be unfair to single out RRSPs for detrimental treatment. RRSP savings are no different from other forms of retirement savings. 2. A Tax Increase According to a recent study of the Canada Tax Foundation, 3.7 million Canadians contributed to RPPs, and 4.8 million Canadians contributed to RRSPs, in the 1992 taxation year. 4 In that year, 69.7 percent of contributors to RPPs and 60.5 percent of contributors to RRSPs were in the middle income range ($25,000 to $60,000). Obviously, the participation rate by Canadians in retirement savings arrangements is quite high. A change to the retirement savings regime, by limiting deductibility of contributions for example, would be viewed as a tax increase by users of these arrangements. Indeed, for those individuals, any negative change to the retirement savings arrangement will have the same effect as a tax increase. 3. Job Creation The quest for deficit reduction should not obscure the important role that government can play in creating an environment conducive to increasing employment opportunities. As the government has previously stated, the bulk of job creation must come from small and medium-sized businesses. As a result, the current retirement savings regime, and in particular RRSP investments, should be viewed as an asset, and not a liability. The ability to deduct savings for retirement has the effect of increasing aggregate private savings as a source of funds for capital investment. 5 Reducing the tax incentive for retirement savings could have the effect of reducing the amount of "pooled" capital funds that could be made available for entrepreneurial activities. It would also add to the cost of doing business in Canada and stifle future employment opportunities. The rules in the Income Tax Act that permit RRSP contributors to put investments in small businesses are insufficient at present and must be strenghtened if the government wants to encourage job creation. Canada's Economic Challenges 6 shows that small business is playing an increasing role in the economy. Any reduction in the existing schedule of limits will hurt the ability of small business to create jobs. Indeed, the government should consider measures to increase the access by small and medium businesses to the retirement savings capital pool. The latest report of the House of Commons Industry Committee makes the point well: Ottawa should use tax incentives to help improve the competitiveness of the Canadian small business sector...One way the government can increase small business access to capital would be to permit owners, operators and other major shareholders to use funds from their registered retirement savings plans to buy equity in their business...that would increase the availability of such "love capital". 7 4. The Tax Expenditure Calculation As indicated earlier, it is said that the tax expenditure for all retirement savings for 1991 was $14.9 billion. That number suggests that the Government of Canada bears a high cost for its retirement savings system. However, it is our view that the calculation of that cost is not correct, with the result that the number is inflated. The Department of Finance's calculation of the tax expenditure cost is arrived at by adding the value of deductions associated with contributions and the value of the tax shelter on earnings. From that result is subtracted the revenue generated from withdrawals. For example, for the 1991 taxation year, the $14.9 billion number noted above is calculated as follows: Tax expenditure (RRSP) = value of deductions + value of tax shelter - taxes on withdrawals = $3.310 billion + $2.960 billion - .735 million = $5.535 billion Tax expenditure (RPP) = value of deductions + value of tax shelter - taxes on withdrawals = $4.460 billion + $8.950 billion - 4.030 billion = $9.38 billion Tax expenditure (RRSP + RPP) = $5.535 billion + $9.38 billion = $14.915 billion. The Government of Canada has itself admitted that its calculation of tax expenditures is subjective. In the case of tax deferrals, it has further stated that: Estimating the cost of tax deferrals presents a number of methodological difficulties since, even though the tax is not currently received, it may be collected at some point in the future. 8 The government has also specifically commented on tax expenditures associated with retirement savings: It should be noted that the RRSP/RPP tax expenditure estimates do not reflect a mature system because contributions currently exceed withdrawals. Assuming a constant tax rate, if contributions equalled withdrawals, only the non-taxation of investment would contribute to the net tax expenditure. As time goes by and more retired individuals have had the opportunity to contribute to RRSPs throughout their lifetime, the gap between contributions and withdrawals will shrink and possibly even become negative. An upward bias in the current estimates can therefore be expected to decline. 9 The method used to calculate the tax expenditure costs associated with retirement savings is based on the "current cash-flow" model. In effect, the calculation takes a snapshot of a given year and does not take into account future income flows. As indicated above, the calculation adds the value in a year of tax deductions to the lost tax on earnings, and subtracts the tax generated from withdrawals. We argue that that model is flawed. Current demographics show that the system is not yet mature since contributions will exceed withdrawals for some time. Once the baby boom generation begins to retire, withdrawals will exceed contributions. Substantial revenues will be generated for the fisc, revenues necessary to support government programs of the day. The value of the tax on those withdrawals is totally ignored in the static model adopted by the Department of Finance. Statistics Canada projects that the proportion of the Canadian population aged 70 and over will increase from 7.84% in 1991 to 10.6% in 2010. The numbers of such individuals will increase from 2.102 million in 1991, to 3.355 million in 2010, a 59.6 percent increase. Those individuals will be drawing pensions, both from RRSPs and RPPs. Those pensions will be taxed and will benefit the fisc. Furthermore, there is evidence to suggest that the calculation adopted by the Government greatly over-values the cost to the fisc. A US commentator has suggested that government also gains "additional corporate tax revenue on the extra capital stock that results from higher savings. The government's official revenue estimates ignore this increase in corporate tax receipts." 10 To restate the position, the tax expenditure calculation adopts a static approach, both by considering only the current year's cash flows and by ignoring any secondary effects of the retirement savings pool. Until the true cost of the retirement savings system can be ascertained, the current estimates cannot be relied upon to justify change to the tax rules governing retirement savings. Trade-Offs While the Alliance recognizes the need for the Government to get its fiscal house in order, with a particular emphasis on the expenditure side of the equation, a proper balance must be struck between short-term solutions and longer-term consequences. One important consideration is the long-term pain that would result from Canadians having less financial flexibility to properly plan for their retirement. This long-term consequence must be measured against the short-term gain in revenues that would result from a freeze or reduction in the contributions to RRSPs and RPPs. At a time when the Government is encouraging greater self-reliance in matters of finance, further limiting Canadians' ability to adequately plan for their retirement would serve to aggravate the public future dependence on government programs. Looking at current demographic trends, it is important to ensure that all Canadians have an opportunity to set aside necessary financial resources that will be drawn upon (and taxed) at the time of retirement. If the government is looking to become more efficient in its delivery of public sector programs, it should also ensure that the private sector is allowed sufficient flexibility to meet its needs. In this context, the current retirement savings plans should be considered an investment in the future and should not be tampered with or diminished. Recommendations I THE ALLIANCE RECOMMENDS THAT THE FEDERAL GOVERNMENT CONSIDER THE TOTAL COST OF THE RETIREMENT SAVINGS SYSTEM BEFORE MAKING ANY CHANGES TO THE INCOME TAX ACT. II THE ALLIANCE RECOMMENDS THAT THE EQUITY ESTABLISHED DURING PENSION REFORM NOT BE DISTURBED BY DISCRIMINATORY CHANGES AND THAT ANY FUNDAMENTAL CHANGES TO THE SYSTEM SHOULD INVOLVE A PROCESS OF INFORMED AND THOUGHTFUL INQUIRY AND DEBATE. III THE ALLIANCE RECOMMENDS THAT THE FEDERAL GOVERNMENT FOSTER ECONOMIC DEVELOPMENT BY TREATING RRSP CONTRIBUTIONS AS ASSETS RATHER THAN LIABILITIES AND BY EXPLORING THE REGULATORY CHANGES NECESSARY TO ENSURE INCREASED ACCESS TO SUCH FUNDS BY SMALL AND MEDIUM-SIZED BUSINESSES. _______________________ 1 Appendix A to this submission details the historical development of pension tax reform. 2 Taken from Sylvain Parent, FSA, FCIA, RRSP income replacement levels: a case study, 1993 Pension & Tax Reports; 4:93-94. 3 Further assumptions are as follows: rate of return is 7.5% per annum; yearly salary increases are 5.5% per annum; mortality is 80% of the average of the 1983 Group Annuity Mortality rates for males and females. 4 Perry, David B, Everyone's Tax Shelter At Risk, Canadian Tax Highlights, Volume 2, number 10, October 19, 1994; p. 75. 5 Andrews and Bradford, Savings Incentives in a Hybrid Income Tax, Studies of Government and Finance, The Brookings Institution, Washington, DC; February, 1988. 6 Department of Finance, January, 1994, p. 30. 7 Special Report, The Public Sector, October 24, 1994. 8 Government of Canada, Personal and corporate income tax expenditures, December 1993, p.4. 9 Ibid., p.53. 10 Feldstein, Martin. The Effects of Tax-Based Incentives on Government Revenue and National Saving, NBER Working Paper #4021, March 1992. This position has been dismissed, out of hand and with no reasons, by two Canadian commentators: Ingerman, Sid and Rowley, Robin, Tax Losses and Retirement Savings, Canadian Business Economics, Vol. 2, No. 4, Summer 1994, pp. 46-54.

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Response of the Canadian Medical Association to the Canada Revenue Agency Draft GST/HST Policy Statement* (GST/HST Notices - Notice 286)

https://policybase.cma.ca/en/permalink/policy11479

Date
2015-02-23
Topics
Physician practice/ compensation/ forms
  1 document  
Policy Type
Parliamentary submission
Date
2015-02-23
Topics
Physician practice/ compensation/ forms
Text
*Draft GST/HST Policy Statement - Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates (GST/HST Notices - Notice 286, October 2014) The Canadian Medical Association (CMA) is the national voice of Canadian physicians. Founded in 1867, CMA's mission is to help physicians care for patients. On behalf of its more than 82,000 members and the Canadian public, CMA performs a wide variety of functions. Key functions include advocating for health promotion and disease prevention policies and strategies, advocating for access to quality health care, facilitating change within the medical profession, and providing leadership and guidance to physicians to help them influence, manage and adapt to changes in health care delivery. The CMA is a voluntary professional organization representing the majority of Canada's physicians and comprising 12 provincial and territorial divisions and 51 national medical organizations. Introduction The 2013 Federal Budget introduced amendments to the Excise Tax Act that extend the application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to supplies of reports, examinations and other property or services that are not made for the purpose of the protection, maintenance or restoration of the health of a person or for palliative care: new sections were added to the Excise Tax Act introducing additional conditions that must be met before uninsured health care services will be exempted from the GST/HST. These amendments are retroactive to March 22, 2013, for most provinces (exception: April 1, 2013, for Prince Edward Island). In response, the Canadian Medical Association (CMA) detailed the concerns of its members in a formal letter to the Canada Revenue Agency (CRA) and requested that the CRA conduct a consultation with stakeholders. On October 31, 2014, the CRA released a draft GST/HST policy statement, Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates, herein referred to as the draft policy. The CRA notes that these "amendments clarify that [the] GST/HST applies to supplies of reports, examinations and other property or services that are not made for the purpose of the protection, maintenance or restoration of the health of a person or for palliative care." The CMA has consulted with all provincial and territorial medical associations on this matter and is pleased to provide its comments with respect to the draft policy. This document is intended to (1) highlight CMA's concerns with respect to the draft policy and (2) provide recommendations to improve it. Overall comments Although the draft policy is intended to clarify CRA's position with respect to the meaning of the term "qualifying health care supply" (QHCS), it provides insufficient guidance with respect to the CRA's view on (1) the meaning of the different elements of a QHCS, (2) the factors to be considered when determining if a supply is a QHCS and/or (3) the documentation required to support a physician's conclusions regarding the nature of his/her supplies. The CMA is concerned that this ambiguity will ultimately lead to confusion for patients and clinicians alike. Moreover, the CMA has identified the following high-level concerns with the draft policy: * Changes in the draft policy are retroactive to March 22, 2013, for most provinces (exception: April 1, 2013, for Prince Edward Island). There is a prolonged gap between the coming into force date (budget date) and the date on which CRA issued guidance on the new tax rules. * The draft policy places the responsibility for determining the purpose of a supply on the practitioner. The policy needs to provide additional guidance to practitioners on how to determine the purpose of a particular supply. * The CRA must ensure that the audit process respects patient-physician confidentiality. The draft policy should indicate the record-keeping/reporting requirements a physician should consider. The scope of the policy is also limited in some other ways. The policy does not address the implications for a physician of making a taxable supply, such as (1) how to apply the coming into force rule, (2) when to register for the GST/HST and (3) which rate of GST/HST to apply. New purpose test The CMA believes that physicians will find it problematic to apply the new purpose test in certain situations. This is because the purpose test is subjective and needs to be applied on a case-by-case, patient-by-patient basis. As a result, different individuals may reach different conclusions, depending on their expertise (i.e., physicians vs. CRA auditors). Furthermore, the draft policy does not provide comments on the meaning of terms such as "for the purpose of" or the terms "maintaining health," "preventing disease" and "treating ... illness, disorder or disability." Moreover, the draft policy does not mention the first order supply principle or specify CRA's view on whose health must be maintained or whose disease, injury, illness, disorder or disability must be addressed. Must it be the recipient of the supply, the person to whom the services are rendered, or may it be another person? The answers to these questions are determined based on the particular scenario. The draft policy places the responsibility for determining the purpose of a supply on the practitioner. However, the draft policy does not provide guidance on how to determine the purpose of a particular supply. Furthermore, it is conceivable that the purpose of a supply could change either during an initial visit (i.e., if an illness is identified) or over time (as a result of changing medical opinions on certain procedures). Moreover, the draft policy does not recognize and consider that the diagnostic procedures performed by a practitioner when examining a patient are the same whether or not the practitioner is being paid by or providing a report to a third party. It also does not recognize and consider that even though the practitioner may be reporting to a third party, he/she is also discussing his/her recommendations for treatment with the patient. Recommendations 1. Expand on the meaning of "for the purpose of," as follows: * Discuss the first order supply principle and how it would apply to the purpose test in this circumstance (e.g., is the purpose the immediate reason for the supply or does one have to consider the eventual or ultimate goal?). * Provide a list of factors that practitioners should consider when they are determining the purpose of the supply (see Appendix 1 for other CRA policy statements that include such lists). * Discuss the impact of an additional purpose arising during the course of an examination. 2. Clarify the meaning of the following terms: * maintaining health * preventing disease * treating, relieving or remediating an injury, illness, disorder or disability 3. Recognize and consider that the diagnostic procedures used by a practitioner when examining a patient are the same whether or not the practitioner is being paid or providing a report to a third party (e.g., insurance company, court) and that even though the practitioner may be reporting to a third party, the practitioner is also discussing their recommendations for treatment with the patient. The draft policy should address and explore this issue. 4. Provide examples of documentation that could be used to support a practitioner's decision, taking into account the need to maintain the confidentiality of patient records. Assisting (other than financially) an individual in coping with an injury illness, disorder or disability Without further guidance, the meaning of "assisting (other than financially) an individual in coping with an injury illness, disorder or disability" is subjective. Practitioners may disagree on whether or not a particular supply meets the definition. The current policy provides insufficient guidance on how to determine if a report is for financial assistance or for coping with an injury, illness, disorder or disability. For example, reports to employers could be for either purpose. Recommendations 5. Provide greater clarity with respect to the concept of "assisting (other than financially) an individual in coping with an injury illness, disorder or disability." 6. Provide comments on the meaning of the following terms: * financial assistance * injury, illness, disorder or disability 7. Provide factors to guide practitioners in determining when a report to a third party is for financial assistance or for another purpose. 8. Provide examples of documentation that would be sufficient to demonstrate to the CRA the validity of the practitioner's conclusion that a supply is a QHCS. Single- versus multiple-supply analysis The draft policy states: "In cases where a supply is made for more than one purpose, all of these purposes would be considered when determining if the supply is a qualifying health care supply. If one of the purposes for the supply meets the definition of 'qualifying health care supply' then the supply would be a qualifying health care supply. However, it should be noted that supplies are generally made for a single purpose. In cases where a health care service, such as an examination or assessment, is supplied together with a report or certificate it is necessary to determine if the supplier has made a single or multiple supplies." The addition of the single versus multiple supply analysis adds significant complexity to the process of determining whether a supply is a QHCS. If a service is considered by the CRA as constituting multiple supplies, each with a different tax treatment, the practitioner will have to apportion the fees between the supplies for tax application purposes. It is not practical for a clinician to analyze whether a particular patient visit is a single supply or whether it constitutes multiple supplies. This responsibility would be an onerous burden for practitioners. Recommendations 9. The draft policy should take the view that, in general, there is a single supply. 10. The draft policy should clearly indicate that the health care purpose is determinative and takes precedence over any other purpose. If a supply has multiple purposes, and one of the purposes is a qualifying health care supply, then the supply will be classified as a QHCS and thus exempt from GST/HST. 11. Provide practical examples of situations in which a practitioner could be making multiple supplies. 12. Provide a list of factors specific to the QHCS to help practitioners determine whether a supply constitutes a single supply or multiple supplies. Examples The draft policy includes 23 examples that each set out the CRA's view on whether or not a particular supply or combination of supplies qualifies as a QHCS and is therefore exempt. All of the examples involve a single supply; there are no scenarios involving multiple supplies. Furthermore, although the examples provide the CRA's decision on whether or not the supply in question constitutes a QHCS, they do not discuss the various factors/elements that the CRA would consider in reaching that decision. For example, examples 3, 4 and 5 all involve an examination of a patient and a report or document that a patient provides to an employer or potential employer. The draft policy does not clearly explain why the supplies in examples 4 and 5 are QHCS but the supply in example 3 is not. Moreover, in some cases, the examples provided by the CRA do not reflect all of the aspects of the scenario in question. For example, in Alberta, a driver's medical examination (and completion of the associated form) is an insured service after the age of 75 years, but example 10 makes the blanket statement that completion of such a form is not a QHCS. Another example is that in some cases there is a subtle distinction between sick notes and short-term disability forms, for time missed because of illness. Recommendations 13. If both single- and multiple-supply concepts are included in the final version of the policy, examples with multiple supplies should also be included. 14. For each example, clarify in the rationale section how the tax status was determined in each example. 15. Include a linkage to the factors discussed in the draft policy statement suggested above in making its determination of the tax status of the supply. 16. The CRA should maintain a repository and distribute a list of additional examples not included in this iteration of the policy (e.g., annual executive medical examinations, applications for Disability Tax Credit). 17. The policy could include comments on GST/HST registration, collection and reporting requirements, the association rules and the small supplier threshold as well as possible eligibility for recoveries of GST/HST by way of rebate or input tax credits (ITC) and ITC allocation requirements. Conclusion The CMA appreciates the opportunity to comment on the draft policy as part of CRA's consultation process. To ensure that clinicians can implement the new requirements with minimal impact on their patients and their practice, additional clarity is required with respect to the meaning of the various elements in the definition of a QHCS, the factors to be considered when determining if a supply is a QHCS, and the documentation required to support a physician's conclusions regarding the nature of his/her supplies. The CMA would welcome the opportunity to comment on future iterations of this policy. Appendix 1 Examples of GST/HST policy statements that include a list of factors to assist the reader in determining whether a particular set of facts meets the CRA's policy: * P - 244: Partnerships - Application of subsection 272.1(1) of the Excise Tax Act. * P - 238: Application of the GST/HST to Payments Made Between Parties Within a Medical Practice Organization * P - 228: Primary Place of Residence * P - 208R: Meaning of Permanent Establishment * P - 276R: Application of Profit Test to Carrying on a Business * P - 167R: Meaning of the First Part of the Definition of Business * P - 164: Rent-to-own Agreements * P - 111R: The Meaning of Sale with Respect to Real Property * P - 104: Supply of Land for Recreational Units Such as Mini-homes, Park Model Trailers, and Travel Trailers * P - 090 Remote Work Site * P - 077R2 - Single and Multiple Supplies * P - 051R2: Carrying on Business in Canada

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