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.