Canada’s threatened health care system

2014 Accord compromises basic principles

BY VAN ANDRUSS
FEBRUARY 15, 2012



I imagine the reader has heard about Stephen Harper’s recent take-it-or-leave-it proposition regarding Canada’s health care system. The aim of this commentary will be to clarify some of the issues involved.

First a little history: In 1947, the Saskatchewan government, led by Tommy Douglas, introduced the first provincial hospital insurance program in Canada. The federal government under Paul Martin Sr. followed in 1957 with a national hospital insurance program. Then, in 1962, Saskatchewan’s NDP government instituted the first public health care program.

The Pearson minority government created a national Medicare program in 1966, with Ottawa paying 50 per cent of provincial health costs. Citizens were guaranteed portable, comprehensive and universal access to necessary physician and hospital services, regardless of ability to pay.

In 1977, under Pierre Trudeau, the Liberals retreated from the 50/50 cost-sharing policy, replacing it with block funding. Then, in 1984, still under Trudeau’s leadership, the Canada Health Act was established.

While the administration of the health care system falls to the provinces and territories, under the Canada Health Act the federal government takes responsibility to ensure that standards of universality, accessibility, comprehensiveness, public administration and portability are properly met. This means that federal funds are to be spread evenly among the provinces and territories, all health care recipients are to be treated equally and comprehensively, and coverage is “portable” between provinces. No extra billing or private insurance for necessary medical care is allowed.

Since its enactment, the principles of the Canada Health Act have been compromised. About 30 per cent of Canadian health expenditures now come from private sources. The cost-sharing with provinces and territories has fallen from 50 per cent to about 20 per cent, and the pressure towards a two-tiered system (private and public) is greater than ever.

It is within such a context that Stephen Harper made his pronouncements in Davos, Switzerland, about the future of health care in Canada. The topic has arisen, to begin with, because funding agreements between levels of government will soon expire and new agreements need to be in place by 2014 (called the 2014 Accord).

The Prime Minister does not threaten to cut off federal funding entirely, which in a panic, was my first understanding. No, it seems there will be a continued six per cent increase in transfer of funds for five years (some say four years), after which the transfer will be tied to inflation and economic growth. All predictions have it that the funding will then fall off considerably.

This is the first time since the Canada Health Act was established that the federal government has not negotiated funding with the provinces/territories or tied additional money to system improvements. What is clear is that the sort of cooperative federalism that existed to this point is reaching an end. In line with the neo-conservative form of federalism, the provinces will their get funding and they may do with it what they please: they’re on their own.

In other words, the federal government will not long uphold the standards of the Canada Health Act. Consequently, barriers to the privatization of medical care, with its extra-billings and hospital user fees, will dissolve.

In addition to these changes, there will be an end to the principle of “equalization.” Transfers to the provinces/territories will be made on a per capita (or per person) basis. Accordingly, the more populous provinces will get more federal monies than the less populous – and mostly poorer – provinces. It was the original intent of the Canada Health Act, through taxation and transfer, to soften the blows of heedless capitalism, constraining the “haves” to share their wealth with the “have-nots.” This new policy represents yet another breakdown in the moral character of the federation.

But such policies are consistent with neo-conservative philosophy, which favours a clean separation of powers between federal and provincial governments, tax cuts for the rich and each person looking out for his/her own welfare.

First Ministers of the provinces met in Victoria to discuss the Harper decision. Christy Clark, the Premier of BC, seems unperturbed by the news. She goes along with per capita transfer payments. All she asks is that they be “age-adjusted.” (BC has the most seniors among the provinces.) Where will she make up the short fall? Could she have in mind biting off a chunk of the subsidies for the gas and oil industries? Or taxing the rich?

It is predictable that, as federal funds are withdrawn from health services, more money will be diverted to building prisons or buying fighter jets. Business corporations will enjoy sweeter tax breaks and a proportionately greater tax burden will descend on “ordinary” citizens.

By all appearances, then, with the coming 2014 Accord, not only will we face a gradually degraded public health care system, we will have lost a grand opportunity to expand and improve it.