Federal Budget 2023 Highlights 

The 2023 Federal Budget, presented by Finance Minister Chrystia Freeland on March 28, 2023, includes several proposals that are particularly relevant to physicians and their families. It’s important to note that these proposals are not yet law and require royal assent to be enacted. Here’s a restructured overview of the key points: 

• Alternative Minimum Tax (AMT) Adjustments: The AMT, which ensures a minimum tax payment by using fewer exemptions and deductions but a lower tax rate, is set for changes. The exemption threshold is proposed to rise from $40,000 to $173,000, with the tax rate increasing to 20.5%. This aims to target high-income individuals, potentially affecting physicians with significant dividend, capital gains income, or high deductions. 

• Enhancements to Registered Education Savings Plans (RESPs): To better support rising education costs, the budget proposes increasing the withdrawal limit for full-time students from $5,000 to $8,000 and for part-time students from $2,500 to $4,000. Additionally, divorced or separated parents may be allowed to open joint RESPs for their children. 

• Business Transfer to Next Generation: Amendments are proposed to ensure only genuine intergenerational business transfers receive favorable tax treatment. However, these rules will not apply to medical professional corporations. 

• Increased Healthcare Spending: The budget outlines a plan to provide an additional $195.8 billion over 10 years for various healthcare initiatives, including family health services, mental health, and reducing treatment backlogs. 

• Incentives for Healthcare in Rural Areas: To address the shortage of healthcare professionals in rural and remote areas, the budget proposes $45.9 million over four years to increase the forgivable portion of Canada Student Loans. 

• Canadian Dental Care Plan: A new plan is proposed with a $13 billion budget over five years, offering dental coverage for uninsured Canadians with family incomes below $90,000, and no co-payment for those under $70,000. 

• Support for Students: The budget includes $813.6 million to enhance student financial assistance, such as a 40% increase in Canada Student Grants, raising the Canada Student Loan limit, and removing credit screening for mature students. 
• Grocery Rebate: A one-time payment is proposed for low- and modest-income Canadians to help with rising grocery costs, linked to the GST credit. 

This summary provides an overview of the key aspects of the 2023 Federal Budget that are of particular interest to physicians and their families.