Generously, the administration of Canada’s Prime Minister Justin Trudeau is helping America solve its doctor shortage. Thanks to him and Deputy Prime Minister Christia Freeland, highly educated and competent Canadians are moving to the United States in record numbers. Florida is particularly blessed by the exodus from Canada of doctors, accountants, lawyers, technology experts, and many others who now reside in the Sunshine State. In 2022 alone, 126,340 Canadians became permanent residents of the US, an increase of 70% from the previous year. *
Now, the Trudeau administration is doubling down on its efforts to drive talented people out of the country. Under the guise of “tax fairness,” Ms. Freeland is pushing through changes in how Canadians pay capital gains. She has a particular desire to publicly punish doctors. Beginning June 25, the tax on gains above $250,000 Canadian (roughly $182,000 US) climbed to 66%. A doctor who builds a practice worth $2 million could see $1.16 million disappear upon retirement.** Other entrepreneurs could suffer the same confiscation after a lifetime of building a successful business.
Freeland seems to believe that she can frighten doctors away from private practice and into less lucrative positions within the Canadian healthcare system. Surprisingly, blaming greedy doctors for the physician shortage is popular north of the border. Unsurprisingly, it is Freeland who is also behind banning foreigners (Chinese and Americans) from buying real estate in Canada and taxing those who are already owners. Essentially, she is building a one-way highway from Canada to Florida.
I doubt that Freeland’s efforts to force doctors into a domestic version of the Peace Corps will work. Foreigners are not responsible for the housing shortage and greedy doctors are not the cause of third-world numbers of medical practitioners in Canada. According to the OECD, our northern neighbor already relies on taxes on personal income, profits, and gains at a rate far higher than the average OECD member, 36% versus 24%.*** Taxes on property are also nearly twice as high as the average, 11% versus 6%. Yet, Freeland claims that without the hike Canada will be “a country where those at the very top live lives of luxury but must do so in gated communities behind ever higher fences using private health care and airplanes because the public sphere is so degraded and the wrath of the vast majority of their less privileged compatriots burns so hot.” The rhetoric burns pretty hot as well.
Fortunately for us, Canada’s loss will be America’s gain. North America’s frozen top hat remains an underweight for prudent investors until the political situation improves.
* Kubes, D. "Why Canadians are fleeing to Florida". National Post, online, June 14, 2024. https://epaper.nationalpost.com/article/281492166478607. Accessed on 06.26.2024.
** Lilley, B. "Lilley: Freeland warns of dark future in Canada without capital gains tax hike". Toronto Sun, online, June 09, 2024. https://torontosun.com/opinion/columnists/freeland-warns-of-dark-future-without-capital-gains-tax-hike. Accessed on 06.26.2024.
*** OECD, revenue statistics. https://www.oecd.org/tax/revenue-statistics-canada.pdf.Accessed on 06.26.2024.