The budget tabled by the Liberal government last week proposed an increase to capital gains taxes that has caused much consternation in the medical community.
On Tuesday, the Canadian Medical Association released a statement saying doctors “rely on their professional corporations as a means of saving for retirement since most do not have access to employer retirement plans.” The association urged the government to reconsider its proposed capital gains tax adjustment.
While medical corporations will indeed be subject to increased capital gains taxes, the complaint around retirement is a symptom of a different disease: Registered Retirement Savings Plan contribution limits are far too low.
First some background. RRSP contributions are capped at 18 per cent of income, up to an annual maximum. In 2023, the annual maximum was $171,000 of income, meaning a maximum contribution of $30,780.
While the income cap has been adjusted upwards with inflation, the percentage has not. It has remained at 18 per cent since 1991, nearly 33 years ago.
Needless to say, much has changed since then.
