That's part of the professor's job: to be quick.
Firstly, I'd like to thank the Standing Committee on Finance for its invitation.
Since 2007, I have been a professor at the University of Ottawa School of Rehabilitation. My training and my field of research are in the organization of care, particularly as it relates to musculoskeletal disorders.
I am going to discuss the bill from the angle of doctors' practices, as that is the only perspective I can really speak to.
Health care expenditure data published by the Canadian Institute for Health Information show that in 2014, the most recent year for which data is available, physicians accounted for 21.4%, or $32.5 billion, of all public health spending. However, that amount underestimates the total public financial resources allocated to doctors, since there were also funds allocated to doctors in the funding of hospitals and other establishments, for a total of $73.3 billion, or 48.4% of public expenditures. Unfortunately, the institute does not specify how much of the funding given to hospitals and other institutions went to physicians.
Be that as it may, one single profession accounts for one of the highest expenditure items, raking in about a quarter of total public spending on health in Canada. And that percentage has in fact been increasing constantly since 2005.
May I remind the committee that in Ontario, for instance, there are 26 regulated health care professions. In several provinces, doctors may also incorporate. The effect of that is to reduce their tax rate considerably, of course, and there are corporate tax deductions. Moreover, by declaring a smaller annual salary, incorporated physicians gain access to numerous generous benefits generally given to the lower-income middle class, such as more generous family allowances, subsidized day care, student bursaries for family members, a lower threshold for medical cost credits, and so on.
Their incorporation has consequences not only for federal and provincial finances, but also municipal ones. I'll give you a somewhat anecdotal example, but it will give you some idea: where I live, a doctor who declares an annual income of less than $40,000 can by presenting his tax assessment obtain a municipal services access card for half the going rate.
It is estimated that approximately 60% of physicians are currently incorporated, although rates have greatly increased these past years. Since incorporation demands a yearly investment of time and money, this indicates that incorporation provides clear tax advantages.
Lower corporate tax rates were brought in mainly to foster job creation in competitive sectors. However, the medical profession is more akin to a monopoly, given the highly regulated and controlled offer of services. As opposed to other employment sectors, doctors run few risks, since they can count on a constant, highly solvent single-payer source of income, the government.
The few jobs created in physicians' offices are essentially a transposition of jobs that would be in the hospitals if doctors' offices did not exist. One can thus question the real net job creation derived from the incorporation of physicians.
The amounts that would be recovered though fairer taxation could be reinvested into initiatives aimed at fostering the health of the Canadian population.
The health care system is but one of the 12 recognized factors that determine health. The funds could be reinvested into other health determinants, for instance a subsidized day care network, which is an early childhood development determinant, or improvements to public transit, which is a determinant of air quality and the physical environment, or a public pharmacare system.
Once again, I thank the committee for its invitation. I will be pleased to answer your questions.