Finance Committee on Nov. 22nd, 2016

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

In addition to that, you obviously have international.... For example, in the interior of British Columbia, we like to joke a lot about South African doctors, because, first of all, we love them. Why do we love South African doctors? It's because they are willing to come to Canada and apply their hard-earned skills. They love Canada. They love the quality of life. But, as Mr. Sorbara pointed out earlier, there are many different jurisdictions competing for that international talent.

If a physician finds out that they are given a preferential tax rate in another jurisdiction, will that impact health care, particularly patient care, in Canada?

[John Feeley]

Yes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Good.

Now, Finance Canada did their own process. Mr. Grewal mentioned earlier that it ran in the hundreds of dollars. In the modelling you've done, with people very familiar with how medical groups work, how did you arrive at $18,000 to $32,000?

[John Feeley]

In both cases, we spoke to actual physicians in these groups. We put them in touch with our people at MD Management, so they worked with accountants and tax specialists to figure out what the actual impact would be, based on the federal-provincial change. That's how we arrived at that number. It's based on actual financial information.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I appreciate that, but why do you think there is such a disparity between what Finance Canada ran in, given the information that it believes it will be hundreds of dollars versus thousands of dollars of your members' hard-earned money?

[John Feeley]

I can't really speak to Finance Canada's scenarios because they didn't share the details with us. We would be happy to talk to them about that, but we didn't have access to it.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

If Finance Canada were to sit down with I think you said FP Medical, the group that did your modelling—

[John Feeley]

MD Financial.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

—then I'm sure they would welcome that so they can compare methodologies.

[John Feeley]

Indeed.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay. There's an opening again for the government to take a look at this because we really think this needs a second look.

Again, this is a government bill. There has been a lot of criticism of the previous government for different things they put in a bill, but I don't believe we ever had something that would affect health care, research, and patient health as much as it sounds like this will.

I would urge the government to try to fix this, Mr. Chair, because it is their legislation. If not, then I guess the opposition can look at remedial amendments down the road, but I would encourage them to take a look at that because this does seem to be—

Again, as Mr. Liepert said earlier, the finance officials believe there is a disparity. I don't think they are taking into account the social costs that will come with this decision, so I appreciate your work here today.

How much time do I have, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

You have about 20 seconds.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I'm going to go to Mr. Wudrick quickly.

Mr. Wudrick, I support a lot of what your organization stands for. I think it's excellent that we have independent watchdogs besides opposition. The public needs many voices to look at these kinds of things, but I've heard time and time again we need a simpler tax code.

For the majority of Canadians, they are dealing with their own individual situation. They are not dealing with bond strips and international tax evasion schemes that are quite complicated, yet when we talk about simplifying the tax code, everyone says we need to make it simpler.

Technology has made things incredibly simple. In fact, most people can look at TurboTax and get their—

[The Chair, Liberal, Wayne Easter]

Dan, I hate to tell you, but 20 seconds travels awfully fast. Can Mr. Wudrick give an answer?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Yes. I'm just going to leave it to him. I would like to ask him the question. Why do you continue because there are these other methods that make taxes much easier for people?

[Aaron Wudrick]

Sorry, is your question why do we continue to have a more complicated system?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

No. Why do you continue to advocate, considering that most of the huge War and Peace tax code is not directed at average Canadians?

[Aaron Wudrick]

I think it's important that a tax would be understandable to the average citizen. We should not have to hire an expert or have software to know what we are eligible for.

When we look at the number of things that are crammed into the tax code, we see there are all types of distortions. There are all types of things that treat certain groups more specially than others. Depending on the government of the day, those groups may be different, but the reality is that they are trying to cram in boutique measures, and we think that's unfair.

We think that distorts the economy. If the objective of a tax system is to raise revenue, we should decide how much revenue we want to raise and then try to find the simplest and most efficient way to do that.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll turn to Mr. Grewal.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair.

I also want to start off by thanking the Taxpayers Federation for keeping elected officials who run for other offices to account. I think you are doing a tremendous job, and keep that up.

To the CMA—sorry, it seems like we're picking on you, but we're really not—you made a comment that this change is going to impact medical schools. Can you elaborate on that a little further?

[John Feeley]

I can speak to it generally, but Dr. Davies works at the University of Ottawa so he could speak to it more specifically.

[Raj Grewal, Liberal, Brampton East, ON]

Sure.

[John Feeley]

Basically what our research is telling us and what our members have told us is they are pooling their resources, and in some cases they have additional funding coming into the university directed to support teaching.

There are members of the group who are doing more teaching. Some are doing more clinical, some are doing more research, and the pooling of that income allows the support of that activity, some of which is not remunerated. For example, teaching, in other words, would be by volunteer without the pooling of that income to facilitate those individuals who are teaching.

Perhaps I could just ask Dr. Davies to get a little more specific.

[Prof. Richard Davies]

I think you have it generally correct.

Essentially, we don't get paid for the teaching that we do. This is, if you like, our legacy for the future. As I said, we have the top-rated teaching program for cardiology in the country. We spend a lot of time at it, we work at it, and we're very proud of it.

In general, clinical dollars that are redistributed fund 80% of the time that doctors spend doing research. There is some peer review, but compared to what we do with this voluntary redistribution of clinical funds, it's a drop in the bucket.

We have several areas of medicine that are dramatically underfunded by the different funding schemes. We realized that they were important. These are colleagues who can do things that I can't do, and I need their help. They are highly trained, and we make sure that they're adequately remunerated as well. So—

[Raj Grewal, Liberal, Brampton East, ON]

Sorry, I don't mean to cut you off, but my time is a little limited.

Mr. Feeley, what is the average income per year of a physician who is a member of the Canadian Medical Association?