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CMA PolicyBase

Policies that advocate for the medical profession and Canadians


15 records – page 1 of 2.

Medical Council of Canada

https://policybase.cma.ca/en/permalink/policy510
Last Reviewed
2014-03-01
Date
1989-08-23
Topics
Health human resources
Physician practice/ compensation/ forms
Resolution
GC89-71
That the Canadian Medical Association reaffirm its endorsement of the Medical Council of Canada as a national examination corporation.
Policy Type
Policy resolution
Last Reviewed
2014-03-01
Date
1989-08-23
Topics
Health human resources
Physician practice/ compensation/ forms
Resolution
GC89-71
That the Canadian Medical Association reaffirm its endorsement of the Medical Council of Canada as a national examination corporation.
Text
That the Canadian Medical Association reaffirm its endorsement of the Medical Council of Canada as a national examination corporation.
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Salaried physicians

https://policybase.cma.ca/en/permalink/policy605
Last Reviewed
2014-03-01
Date
1989-08-21
Topics
Physician practice/ compensation/ forms
Resolution
GC89-06
That the Canadian Medical Association actively investigate ways and means of improving federal provisions as they relate to salaried physicians.
Policy Type
Policy resolution
Last Reviewed
2014-03-01
Date
1989-08-21
Topics
Physician practice/ compensation/ forms
Resolution
GC89-06
That the Canadian Medical Association actively investigate ways and means of improving federal provisions as they relate to salaried physicians.
Text
That the Canadian Medical Association actively investigate ways and means of improving federal provisions as they relate to salaried physicians.
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Small business perspectives of physician medical practices in Canada

https://policybase.cma.ca/en/permalink/policy11846
Date
2016-03-21
Topics
Physician practice/ compensation/ forms
Health human resources
  1 document  
Policy Type
Parliamentary submission
Date
2016-03-21
Topics
Physician practice/ compensation/ forms
Health human resources
Text
The Canadian Medical Association (CMA) is the national voice of Canada's doctors, representing more than 83,000 physicians across all regions in the country. With this brief, the CMA provides a portrait of medical practice as small businesses in Canada. A significant proportion of Canada's physicians are self-employed, small business owners, whose medical practices are incorporated as Canadian-Controlled Private Corporations (CCPCs). Reflecting the significance of the CCPC framework to medical practice in Canada, the CMA strongly supports the federal government's commitment to reduce the small business taxation rate from 11% to 9%. However, the CMA has been concerned with some statements regarding the incorporation of professionals. In response to the federal government's statement, the CMA has received a significant volume of correspondence from its membership; unprecedented in our almost 150 year history. Presented within this brief are the results of a survey undertaken by the CMA to explore physician incorporation. The survey was distributed to a sample of 25,000 physicians on Dec. 21, 2015 and closed on Jan. 8, 2016 with a response rate of 9%. Among the key findings of the CMA's survey on incorporation was that more than 8 out of 10 respondents indicated that they were incorporated and reported an average of 2 full-time employees in their professional corporation, including themselves. When part-time employees where included, this increased to an average of 3 employees. Survey respondents confirmed that physician gross (pre-tax) salary is not representative of net salary; where overhead expenses were reported to be 29%, on average, of gross (pre-tax) professional income. Of note, there have been several studies at the provincial level that specifically researched overhead expenses; these studies found average overage expenses to exceed 40% of gross salary. The results of the CMA's survey confirms that the CCPC framework provides a critical tax equity measure that recognizes the unique challenges they face as small business owners and critical to the operation of the practice model, particularly supporting community-based care. In some cases, the practice model is only economical within this framework. An important fact is that unlike other small business owners, physicians cannot pass on any increases in compliance or operating costs to patients, given the design of Canada's public health care system. When asked to consider the likelihood of various actions they may take should the federal government alter the CCPC framework, a large majority (75%) of the respondents indicated that they would be very or somewhat likely to take one or more of these actions: * more than half (54%) of practicing physicians said that they would be very or somewhat likely to reduce the number of hours worked; * 42% would be very or somewhat likely to reduce office staff; and, * about one quarter indicated that they would be very or somewhat likely to pursue other measures such as closing their practice and retiring (24%) or relocating their practice to another provincial/territorial jurisdiction (26%) or to the U.S. or another country (22%). This brief also highlights the policy imperative for extending incorporation to medical professionals. As captured in Ontario's 2000 budget document, it is "to level the playing field with other self-employed individuals who can choose whether to operate their businesses through a corporation".1 Finally, the CMA's core recommendation to the federal government is to maintain tax equity for medical professionals by affirming its commitment to the existing framework governing Canadian-Controlled Private Corporations. Introduction The Canadian Medical Association (CMA) is the national voice of Canada's doctors. The CMA is the voluntary professional organization representing more than 83,000 physicians across all regions in Canada and comprising 12 provincial and territorial medical associations and more than 60 national medical organizations. The CMA's mission is helping physicians care for patients. The purpose of this brief is to provide an overview of medical practice as small businesses in Canada. As is discussed herein, a significant proportion of Canada's physicians are self-employed, small business owners, whose medical practices are incorporated as Canadian-Controlled Private Corporations (CCPCs). As such, the CMA strongly supports the federal government's commitment to reduce the small business taxation rate from 11% to 9%, as outlined in the mandate letter for the Minister of Small Business and Tourism.2 1) Most Physicians are Small Business Owners Canada's physicians are highly skilled professionals, providing an important public service and making a significant contribution to the knowledge economy. In light of the design of Canada's health care system, the vast majority of physicians are self-employed professionals operating medical practices as small business owners. More than 8 out of 10 respondents to the CMA's survey indicated that they were incorporated; 81% indicated that they were incorporated individually while 4% indicated they were incorporated in a group. Nationally, it is estimated that approximately 60% of physicians are incorporated.3 Physician-owned and run medical practices ensure that Canadians are able to access the care they need, as close to their homes as possible. In doing so, Canadian physicians are directly and indirectly responsible for hundreds of thousands of jobs across the country, and invest millions of dollars in local communities. Respondents to the CMA's survey on incorporation reported an average of 2 full-time employees in their professional corporation, including themselves. When part-time employees where included, this increased to an average of 3 employees. In operating their medical practices, Canada's physicians rent, lease or own office space and further contribute to local economies through municipal taxes on these properties. Like other self-employed small business owners, physicians typically do not have access to pensions or health benefits. In addition, as employers, physicians are responsible for the provision of payroll taxes and benefits for their employees. 2) Increased Cost-Burden for Canada's Doctors Canada's physicians face unique, additional financial and personal burdens in owning and operating medical practices in comparison with other small businesses. First, amongst Canada's small business owners4, Canada's physicians are highly skilled and trained professionals. On average, physicians enter the workforce at a later age with significant debt from education. The average age that family physicians enter practice is over 30 years and over 33 years for specialists.5 The 2013 National Physician Survey explored the issue of debt levels. It found that the proportion of medical students expecting debt of $100,000 or more doubled from 15% in 2004 to 30% in 2012.6 Further, a third of medical residents expect debt to be over $100,000 and 19% expect debt to exceed $160,000 before entering practice.7 For Canada's doctors, the high level of education-related debt and the later age they are able to initiate professional earnings represents a significant challenge for personal financial planning, notably retirement planning. Second, it is not well known that physician gross (pre-tax) salary is not representative of net salary. In addition to the expenses of running a medical practice, such as salaries and rent, physicians have a range of professional fees that are required by regulation to be submitted. According to the respondents to the CMA's survey on incorporation, these overhead expenses were reported to be 29%, on average, of gross (pre-tax) professional income. Of note, there have been several studies at the provincial level that specifically researched overhead expenses; these studies found average overage expenses to exceed 40% of gross salary.8 Finally, unlike most small business owners, as providers within a public health care systems, Canada's physicians cannot pass on any cost increases associated with operating their medical practice. The majority of physician remuneration in Canada is through "fee-for-service" systems9 whereby fees for insured physician services10 are set by the province following negotiations with the provincial medical association. Any increases in the cost of operating a medical practice, including changes in taxation, would be borne by the physician directly, as would the potential additional resource burden incurred in responding to a change to the CCPC regulatory framework. It is not surprising then that one study found that "high-income, self-employed physicians are much more sensitive to the marginal tax rate than would be suggested by previous labor-supply studies".11 The results of the CMA's survey on incorporation with respect to personal financial planning highlight the concerns associated with the unique burdens facing physicians in operating a medical practice. A strong majority (92%) of respondents rated the ability to save for retirement as very important for personal financial planning. A majority (61%) of respondents indicated the ability to pay off debt and half (50%) indicated the ability to manage practice overhead costs as very important for personal financial planning. 3) Role of Incorporation for Ensuring Tax Equity for Medical Professional As reviewed above, in light of the design of Canada's health care system, the majority of physicians are self-employed professionals and small business owners. Like other small business owners, physicians do not have access to pension and health benefits, despite investing in local communities and providing employment. Unlike other small business owners, physicians commence professional income later in life and carry high debt levels associated with education and training. In light of these significant considerations, the CCPC framework represents a measure of tax equity for Canada's physicians. In Canada, the 12 jurisdictions have extended the ability to incorporate to medical professionals. As stated in Ontario's 2000 budget document, the underlying policy purpose of extending incorporation to medical professionals is "to level the playing field with other self-employed individuals who can choose whether to operate their businesses through a corporation".12 For self-employed professionals, incorporation offers many well recognized benefits. As highlighted by most taxation guidance, the application to the small business deduction and the ability to retain income in the corporation are significant benefits of incorporation for small businesses.13 For self-employed medical professionals without access to an employer pension or benefits, the ability to retain income in the corporation contributes to retirement and pension planning capabilities. Finally, the CCPC framework allows for income splitting with family members in almost all jurisdictions. The CMA's survey on incorporation explored the benefits of the CCPC framework. The top rated benefit of incorporation was the ability for professional income to be taxed at the small business taxation rate, with 85% rating it as very important. In comparison, 60% of respondents indicated that income splitting with a family member was very important. 4) Changes to the CCPC Framework and Potential Unintended Consequences As noted above, the federal government has committed to reducing the small business taxation rate from 11% to 9%. In recognition of the significant financial pressures managed by physicians owning and operating medical practices, the CMA strongly supports this commitment. However, along with this commitment, the federal government has made concerning statements regarding professionals and the CCPC framework. While the federal government has not indicated a specific measure or timeline, the statements on their own have yielded significant uncertainty and concern. In response to the federal government's statement, the CMA has received a significant volume of correspondence from its membership; unprecedented in our almost 150 year history. The CMA cannot emphasize enough the need for caution in considering changes to the CCPC framework. The CCPC framework and the ability of incorporated physicians to maintain access to the small business rate is fundamental to the business model for these medical practices. Changes to the framework could have real and far-reaching impacts. Beyond the immediate impact to a physician, employees of a medical practice, and the region the medical practice serves, depending on the scope of changes to the CCPC framework, impacts could be at the health-sector level, particularly in terms of shifting the delivery of care away from institutionalized care toward community-based care. The physicians surveyed by the CMA were asked to consider the likelihood of various actions they may take should the federal government alter the CCPC framework. A large majority (75%) of the respondents indicated that they would be very or somewhat likely to take one or more of these actions: * more than half (54%) of practicing physicians said that they would be very or somewhat likely to reduce the number of hours worked; * 42% would be very or somewhat likely to reduce office staff; and, * about one quarter indicated that they would be very or somewhat likely to pursue other measures such as closing their practice and retiring (24%) or relocating their practice to another provincial/territorial jurisdiction (26%) or to the U.S. or another country (22%). The responses to the CMA's survey on incorporation align with the limited research available on this issue. In a study that explored the interprovincial migration of physicians confirmed that "the differences in real income have a positive and significant effect on a physician's decision to migrate from one province to another".14 Another study that explored the impacts of taxation on physicians, noted that "it has been demonstrated in the literature that physicians in higher-tax states work less on average".15 These studies emphasize the potential for unintended consequences should changes to the CCPC framework impact physician medical practice. Conclusion As outlined in this brief, the majority of Canada's doctors are self-employed, highly skilled professionals providing a critical health care contribution in communities across the country. For these physicians, the CCPC framework provides a critical tax equity measure that recognizes the unique challenges they face as small business owners. For the vast majority of incorporated physicians, the benefits of the CCPC framework are critical to the operation of the practice model, particularly supporting community-based care. In some cases, the practice model is only economical within this framework. In light of the intrinsic role of the CCPC framework to medical practice, and therefore the provision of medical care in Canada, the CMA encourages significant caution in considering any potential changes to this framework. The CMA's core recommendation to the federal government is to maintain tax equity for medical professionals by affirming its commitment to the existing framework governing Canadian-Controlled Private Corporations. References 1 Ontario Budget 2000 https://www.poltext.org/sites/poltext.org/files/discours/ON/ON_2000_B_37_01.pdf 2 Mandate Letter for the Minister of Small Business and Tourism http://www.pm.gc.ca/eng/minister-small-business-and-tourism-mandate-letter 3 CMA. 2014. Environmental Scan. 4 Industry Canada. Key Small Business Statistics 2013 https://www.ic.gc.ca/eic/site/061.nsf/eng/02814.html 5 Canadian Post M.D. Registry. 6 National Physician Survey http://nationalphysiciansurvey.ca/wp-content/uploads/2013/03/C3PR-Bulletin-StudentResidentDebt-201303-EN.pdf 7 National Physician Survey http://nationalphysiciansurvey.ca/wp-content/uploads/2013/03/C3PR-Bulletin-StudentResidentDebt-201303-EN.pdf 8 Alberta Medical Association. Setting the record straight on physician compensation. https://www.albertadoctors.org/Media%20PLs%202013/Feb1_2013_PL_Backgrounder.pdf and Ontario Medical Association. Payments to physicians and practice overhead expenses: separating facts from fiction in Ontario. https://www.oma.org/resources/documents/paymentsphysicians_pp18-19.pdf. and R.K. House & Associates Ltd. Executive Summary for the British Columbia Medical Association: 2005 Overhead Cost Study. 9 CIHI. Physicians in Canada, 2014: Summary Report. https://secure.cihi.ca/free_products/Summary-PhysiciansInCanadaReport2014_EN-web.pdf 10 Health Canada. Canada Health Act Annual Report 2014-15. http://www.hc-sc.gc.ca/hcs-sss/pubs/cha-lcs/2015-cha-lcs-ar-ra/index-eng.php 11 Mark H. Showalter and Norman K. Thurston. Taxes and labor supply of high-income physicians. Journal of Public Economics 66 (1997) 73-97. 12 Ontario Budget 2000 https://www.poltext.org/sites/poltext.org/files/discours/ON/ON_2000_B_37_01.pdf 13 Manulife. The Professional's Option - Professional Incorporation. https://repsourcepublic.manulife.com/wps/wcm/connect/02b56600433c4887b94dff319e0f5575/ins_tepg_taxtopicproopt.pdf?MOD=AJPERES&CACHEID=02b56600433c4887b94dff319e0f5575 14 Michael Benarroch and Hugh Grant. The interprovincial migration of Canadian physicians: does income matter? Applied Economics, 2004, 36, 2335-2345. 15 Norman K. Thurston and Anne M. Libby. Taxes and Physicians Use of Ancillary Health Labor. The Journal of Human Resources, XXXV 2.
Documents
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Goods and service tax

https://policybase.cma.ca/en/permalink/policy45
Last Reviewed
2016-05-20
Date
2002-08-21
Topics
Physician practice/ compensation/ forms
Resolution
GC02-58
That Canadian Medical Association continue to advocate for the right of all physicians to claim GST input tax credits.
  1 document  
Policy Type
Policy resolution
Last Reviewed
2016-05-20
Date
2002-08-21
Topics
Physician practice/ compensation/ forms
Resolution
GC02-58
That Canadian Medical Association continue to advocate for the right of all physicians to claim GST input tax credits.
Text
That Canadian Medical Association continue to advocate for the right of all physicians to claim GST input tax credits.
Documents
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Last Reviewed
2016-05-20
Date
2002-08-21
Topics
Health human resources
Physician practice/ compensation/ forms
Resolution
GC02-67
That Canadian Medical Association support the concept that liability for individual practitioner actions in any collaborative care model must be clearly delineated and appropriately insured.
  1 document  
Policy Type
Policy resolution
Last Reviewed
2016-05-20
Date
2002-08-21
Topics
Health human resources
Physician practice/ compensation/ forms
Resolution
GC02-67
That Canadian Medical Association support the concept that liability for individual practitioner actions in any collaborative care model must be clearly delineated and appropriately insured.
Text
That Canadian Medical Association support the concept that liability for individual practitioner actions in any collaborative care model must be clearly delineated and appropriately insured.
Documents
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Relationships among all health care professionals

https://policybase.cma.ca/en/permalink/policy11893
Date
2016-08-24
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
Resolution
GC16-23
The Canadian Medical Association supports educating health care teams to foster collaborative approaches and promote healthy relationships among all health care professionals.
Policy Type
Policy resolution
Date
2016-08-24
Topics
Health systems, system funding and performance
Physician practice/ compensation/ forms
Resolution
GC16-23
The Canadian Medical Association supports educating health care teams to foster collaborative approaches and promote healthy relationships among all health care professionals.
Text
The Canadian Medical Association supports educating health care teams to foster collaborative approaches and promote healthy relationships among all health care professionals.
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Health and wellness plans for residents

https://policybase.cma.ca/en/permalink/policy11944
Date
2016-08-24
Topics
Ethics and medical professionalism
Physician practice/ compensation/ forms
Resolution
GC16-77
The Canadian Medical Association supports the development of health and wellness plans for residents that include tools for meditation and self-reflection.
Policy Type
Policy resolution
Date
2016-08-24
Topics
Ethics and medical professionalism
Physician practice/ compensation/ forms
Resolution
GC16-77
The Canadian Medical Association supports the development of health and wellness plans for residents that include tools for meditation and self-reflection.
Text
The Canadian Medical Association supports the development of health and wellness plans for residents that include tools for meditation and self-reflection.
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Resident physician duty hours

https://policybase.cma.ca/en/permalink/policy11945
Date
2016-08-24
Topics
Physician practice/ compensation/ forms
Resolution
GC16-78
The Canadian Medical Association supports appropriate consideration of health and safety issues when regulations concerning resident physician duty hours are being developed.
Policy Type
Policy resolution
Date
2016-08-24
Topics
Physician practice/ compensation/ forms
Resolution
GC16-78
The Canadian Medical Association supports appropriate consideration of health and safety issues when regulations concerning resident physician duty hours are being developed.
Text
The Canadian Medical Association supports appropriate consideration of health and safety issues when regulations concerning resident physician duty hours are being developed.
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Wellness and resiliency curricula in medical education

https://policybase.cma.ca/en/permalink/policy11946
Date
2016-08-24
Topics
Physician practice/ compensation/ forms
Ethics and medical professionalism
Resolution
GC16-79
The Canadian Medical Association supports the inclusion of wellness and resiliency curricula in medical education and Canadian accreditation standards and elements.
Policy Type
Policy resolution
Date
2016-08-24
Topics
Physician practice/ compensation/ forms
Ethics and medical professionalism
Resolution
GC16-79
The Canadian Medical Association supports the inclusion of wellness and resiliency curricula in medical education and Canadian accreditation standards and elements.
Text
The Canadian Medical Association supports the inclusion of wellness and resiliency curricula in medical education and Canadian accreditation standards and elements.
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Working and practice conditions of medical students and residents

https://policybase.cma.ca/en/permalink/policy11947
Date
2016-08-24
Topics
Physician practice/ compensation/ forms
Ethics and medical professionalism
Resolution
GC16-80
The Canadian Medical Association will undertake a nationwide study to analyze the working and practice conditions of medical students and residents.
Policy Type
Policy resolution
Date
2016-08-24
Topics
Physician practice/ compensation/ forms
Ethics and medical professionalism
Resolution
GC16-80
The Canadian Medical Association will undertake a nationwide study to analyze the working and practice conditions of medical students and residents.
Text
The Canadian Medical Association will undertake a nationwide study to analyze the working and practice conditions of medical students and residents.
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15 records – page 1 of 2.