Sep 17

September 22, 2017

Got home to my tax shelter around 1 am last night, a couple hours after my ER shift was supposed to end – tired, hungry, ready for a late supper and a glass of wine before rolling into bed.

All was quiet, my family sleeping peacefully, only 6 hours to go before the usual gentle chaos generated by four kids on a school morning. I shoved some leftovers in the microwave, uncorked a $14 bottle of shiraz (typical wealthy-doctor vintage), and popped open my laptop to scan the previous day’s news headlines while I waited for my grub to cook.
And almost spewed that first mouthful of wine all over the keyboard.
Toronto Star headline: “Doctors say tax us: Canada is worth it.”
Yup. This courtesy of the eminent Dr. Michael Rachlis, prominent Canadian health policy analyst and commentator, and trusted consultant to government on all things health-related.
The good doctor, apparently currently serving as “interim coordinator” of an outfit called Doctors for Fair Taxation, opines that he is in full support of the Trudeau/Morneau initiative to tax doctors and small business owners more heavily – that, in fact, the measures don’t go far enough.
After all, he writes, Canada continues to grapple with significant income inequity, along with distressing levels of poverty particularly among our seniors and our children, with direct negative health effects on our citizens. Dr. Rachlis informs us that “even the well-to-do in less equal societies have worse health than the wealthy in more equal societies.”
And, oh!  The money we could save if we were all divinely, equally apple-cheeked and robust: “We could save 20 per cent of our health budget if all Canadians were as healthy as the one fifth in the highest income brackets.”
Now who wouldn’t be in support of that?
And in further pursuit of this grand utopia, Dr. Rachlis urges “all physicians to support universal child care, pensions, and maternity benefits.” Never mind that doctors themselves are afforded none of these benefits – take that up with your provincial medical associations, he advises – it’s certainly not the federal government’s problem.
This sort of thing puts me in mind of George Orwell’s allegorical novel “Animal Farm”; even casual students of literature will remember the Seven Commandments of Animalism, the most important of which is, "All animals are equal."
We all know how that ended.
With a parting salute to the great socialist J.S. Woodsworth, Dr. Rachlis punctuates his piece with the priceless, destined never-to-be forgotten phrase:
“Please tax us. Canada is worth it.”
Gourmet microwaved feast and expensive glass of wine utterly forgotten, I hurried off to my little home office, flipped on the lights, and began rummaging frantically through my files.
Because, honestly, until this moment, I had no idea that my wife and I hadn’t been paying any taxes.
For years, we’ve sat at each year-end in our accountant’s office, listening with eyes glazed to Brian summarize the results of his careful perusing of our business affairs, and freely signing “tax” returns where directed.
And only now, with Dr. Rachlis’ prompting, do I realize that we have paid no tax at all.
I wonder, however: to what use has the great and powerful Canada Revenue Agency put the hundreds of thousands of dollars we have shoveled into its gaping maw over the past 14 years of medical practice? If they weren’t “taxes”, what, pray, were they?
Perhaps Dr. Rachlis can clear that up for me.
Sep 17

September 18, 2017

Attention: The Honourable Bill Morneau, P.C. M.P., Minister of Finance
Re: Physicians, Politicians, and Pensions
Dear Mr. Morneau,
I sent you an open letter last week regarding your proposed renovation of the mechanism by which private corporations, used by many physicians to organize their affairs, will be taxed.
I’ve heard nothing back, as yet. I get it – given the intense controversy around this issue, I expect my little missive is completely buried under the mountain of feedback you’ve received.
Nonetheless: much of the blowback you are experiencing stems from the fact that - in contrast to most public employees - doctors in general do not enjoy government-supplied benefits such as pension plans, paid sick leave or maternity leave, or health and dental benefits.
The feedback for you has not been all negative. In addition to having the head of the Canadian Nurses Association behind you, as I alluded to in my earlier letter, Canadian media reported today that there is another “open letter” coming your way, currently circulating for signature by medical professionals, in broad support of your plans – with several caveats, among them a request that along with these changes the aforementioned benefit packages be made available to Canadian physicians.
So I thought it might be useful to engage in a little math exercise with you, as a first step to finding a solution that will mollify doctors, while still allowing you to “dis-incorporate” them as a matter of “fairness.”
I propose that, beginning at age 65, you endow all doctors who have worked for twenty-five years or longer with a pension of $60,000 per year. This is on par with the average pension that an ex-politician enjoys, for life, after service of only six (!) years.
Of course, government funds will need be invested to generate this pension income for physicians.
Assuming a conservative investment rate of return of four percent per annum, $1.5 million will need to be immediately placed in an investment account for each aging doctor. Of Canada’s physician work force of roughly 77,000, approximately twelve percent (9,240) are older than 65.
So let’s complete the math: 9,240 x 1,500,000 equals 13,860,000,000. That’s right – in the interests of tax fairness, but to do right by doctors on this one benefit issue alone, the Government of Canada need only come up with roughly 14 billion dollars to supply them with the same pension income it affords its retired politicians.
Only 14 billion bucks.
Don’t get me started on paid sick leave, maternity leave, vacation pay, and health and dental benefits – that’ll have to wait, perhaps another letter. My brain hurts.
And my trusty old calculator emitted an alarming puff of smoke after generating all those zeroes.
Sep 17

September 12, 2017

Attention:  The Honourable Bill Morneau, P.C. M.P, Minister of Finance

Dear Mr. Morneau,

It’s somewhat surprising perhaps, in a news cycle dominated by wall-to-wall coverage of Hurricane Irma, Hurricane Harvey, and the non-meteorological but very real  Hurricane Trump, that your proposed changes to the way private corporations are taxed continue to draw the spotlight of Canadian media.  It’s surely a measure of the degree of consternation, anxiety, and outright anger that your proposals continue to generate among thousands of hard-working Canadians who feel sideswiped and maligned by these changes.

I read with incredulity, for example, the September 6 comments by Barb Shellian, president of the Canadian Nursing Association, with respect to doctors and taxes.  Apparently, the nursing group has “studied” your draft proposal to change the tax rules that govern incorporated physicians, and broadly supports your far-reaching proposals in the interests of “fairness.”  While “registered nurses aren’t trying to provoke a confrontation with doctors, income is income,” reasons Ms. Shellian.

Sadly, her remarks are emblematic of the misconceptions that many people, including those in your administration, hold concerning the “business” of being a doctor. And, should you unilaterally push forward your initiative to up-end the current tax framework within which we practice, confrontation and turmoil will certainly ensue, and all Canadians will be worse off for it.

It’s perhaps predictable that a “special interest group” would push back strongly against a new government scheme to lift more tax dollars from its collective pockets, and I suppose you would argue that in this respect doctors are no different.  I would counter that, in fact, the conditions in which doctors operate are different – very different.  Allow me to explain.

Since we’re talking about tax policy, let’s talk numbers and one number in particular:  thirteen, as in thirteen years.

A typical specialist physician obtains a four-year undergraduate degree, followed by four years in medical school, and tops that off with five years pursuing specialty training in residency, for a total of thirteen years.  The road is somewhat shorter for general practitioners, but often significantly longer for some specialties – neurosurgeons, to take one example, can spend 20 years (!) in continuous study and training – try pitching that to a fresh crop of bright aspiring 18-year-old high school graduates.

In my own case, after fourteen years in university and in training, I finally began practice as an emergency physician at Alberta Children’s Hospital in Calgary.

Fourteen years - years that my contemporaries used to develop careers, grow businesses, and start families; years in which they began building nest-eggs for their children’s education, and for their own retirements.

I built a nest-egg of a rather different variety during those fourteen years, composed of an enormous yolk of debt surrounded by an expanding egg-white of interest.

But no matter: I had finally “made it.”  I joined the stellar group of physicians at the local children’s hospital, and began my life as an independent, well-remunerated doctor.  Together with my wife, also a debt-laden newly-minted product of fourteen years of training en-route to becoming an obstetrician, we started chipping away at the mountain of money that we owed, took out a mortgage on a home, finally bought a new car, and soon became proud parents.

And as we built our practices and grew our family, my outlook could have been fairly summed up by that line from an old Timbuk 3 song : “The future’s so bright I gotta wear shades.”

But then - only two years into my emergency medicine practice - a brain tumour blocked out the sun pretty much entirely.

All those long years in study and training left me spectacularly well-equipped to care for my patients.  Unfortunately, those same long years of debt accumulation and foregone income left me just as spectacularly ill-equipped to absorb the financial impact of being catastrophically knocked out of my practice.

Because unlike the majority of the registered nurses Ms. Shellian represents, most physicians are not salaried.  Like most physicians, I contract my services to government as a small businessperson.

That means that - unlike nurses - I have no government-supplied safety net.

When illness struck, my income went to zero – not exactly a kind return on my huge investment in medical education.

No paid sick leave.  Nada. No-one to ride to the rescue, to say, in effect:  “You’ve sacrificed and invested all these years as a healthy young adult, foregone income, incurred huge debt, striving to become a doctor in service to Canadian society, so let us help you.”

Nope.  Nothing.

The road ahead was strewn with multiple craniotomies, radiation, meningitis, and too many complications to count.  We had two young children, and my wife was forced to take long leaves of absence from her practice to tend both to them and to my complicated medical battle – leaves of absence that were completely unpaid and during which she still needed to cover substantial office overhead.

I was fortunate – thanks to the very same highly trained and incredibly skilled surgeons and doctors that your government is now painting as tax-dodgers, I’ve survived, so far. After two full years of struggle and recovery, I was able to limp back to practice on a part-time basis, and my wife was able to resume her practice full-time.

The effect on our finances, of course, was horrific.  We were essentially bankrupt, and once again starting from scratch.

And my battle is not done.  My health never returned to baseline, and my cancer has recurred repeatedly in the past two years, with consequent long periods of absence from practice.  I’ve undergone two more craniotomies, and to put it bluntly, I’m running out of end zone.

And now your government proposes to tax us even more heavily, and to make it even more difficult to try to save for periods of illness, and for retirement, and for our children’s education.

I’m making the difficult decision to share my very personal story with you not to elicit sympathy, but rather to illustrate the enormous financial risk we as physicians undertake to become doctors.

My situation is far from unique.  We are physicians, but we are all too often patients, too.  Life happens to us, too. We all have medical colleagues who have been struck down by illness, who have had to struggle in the face of no income, to stay afloat and to provide for their families after long years of study and training to become doctors.

I know that you have already had an earful of feedback from upset medical professionals, all valid, regarding the fact that most physicians receive no pension, no paid vacation, no government-supplied maternity leave, and no paid sick leave.

I feel compelled to add my voice to that chorus; I sincerely hope you will read my letter.

I have the utmost respect for the challenges of your high office; I know that you hold your responsibilities gravely.  And so I trust that you can begin to appreciate the scope of the damage you are about to inflict on Canadian health care.


Jacob Edward Les, MD