Provincial budget does nothing to offset physician losses, creates further doctor recruitment and retention challenges

Today’s provincial budget announcement misses the mark when it comes to creating an environment that will keep doctors practising here and that will make Nova Scotia a desired place for physicians to live and work.

In 2018, the federal government made changes to the rules governing how private corporations are taxed. These new rules have negatively affected physicians across the country, many of whom are small business owners. While other business owners may be able to partially offset their losses by increasing the price of services provided or goods sold, physicians cannot.

These changes undo strategies the Nova Scotia government put in place more than 20-years ago to help Nova Scotia compete for physicians. And the province benefits from the tax windfall the federal tax changes have created.

“Some provinces are making the strategic decision to mitigate the provincial tax impacts, in order to position themselves better to recruit and retain physicians in this highly competitive environment. The government of Nova Scotia has opted not to do so and that is a real missed opportunity,” said Kevin Chapman, Director of Finance.

Compounding the private corporation tax issue for Nova Scotia’s doctors is the fact that Nova Scotia has among the highest personal tax rates in the country. At the highest levels of income, the marginal personal tax rate is 54%.

And further, Nova Scotia physician compensation is among the lowest in the country.

“We currently have close to 200 vacancies and more than 51,000 patients waiting for a doctor. Ignoring the opportunity to make changes to the tax structure makes it that much harder for this government to recruit desperately needed doctors and to compete with neighbouring provinces,” said Mr. Chapman.

Recently, the government of New Brunswick proactively made some tax changes that benefit all small businesses, including physicians. The NB government changed the rules on passive income.

“We are already struggling to compete with New Brunswick because their physicians are often paid much more than Nova Scotia physicians, and now they’ve made changes to soften the impact of the federal tax changes for New Brunswick physicians, which will make it even harder for Nova Scotia to recruit physicians,” said Mr. Chapman. “The government of Nova Scotia cannot continue to stand by as other provinces position themselves to recruit the same physicians that we so desperately need.”

The provincial government’s inaction today has added to the barriers this province faces when pitching Nova Scotia as the province of choice to practice medicine. Doctors Nova Scotia will continue to advocate for more competitive compensation for physicians in the province, in an effort to stabilize the physician workforce and improve health-care delivery for all Nova Scotians. 

“75% of physicians in Nova Scotia are incorporated. In fact, physicians were encouraged by the provincial government to do so in the 90s to try and supplement physician earnings at a time when the province was facing a crisis of physicians leaving the province for other jurisdictions, and an inability to recruit to the province to fill the gaps left behind. The NS government today missed the opportunity to seize a competitive advantage in the physician recruitment space, and worse, has allowed our province to fall further behind neighbouring provinces,” said Mr. Chapman.

“While we are disappointed, we do recognize other helpful investments in this budget announcement, such as investments in mental health services, long term care, collaborative practice, orthopedic surgery and MyHealthNS,” he added.


Barb Johnson
Senior communications advisor
1-800-563-3427 ext. 4915