This blog has long been concerned about sustainable health care , in particular, Canadian health care. In the 2019 election, health care has taken a back seat to climate change and economic issues. Still, the scope of public health care and the federal government’s role in assuring it is being discussed. Here, I offer a summary of the party platforms and a little history on how we got to our current system.
Canada Health Accord
In 1996, the Chretien government reduced transfers to the provinces to address a serious deficit problem. This resulted in increased anxiety in the health sector, facing a number of sources of increasing costs. In 2004, Paul Martin’s government strengthened a Health Accord with the provinces, guaranteeing a 6% annual increase in the Canada Health Transfer. The Prime Minister proclaimed rather optimistically that the deal was a “fix for a generation”. The focus was placed on a National Wait Time Strategy to reduce the amount of time patients waited for key procedures.
Stephen Harper’s government continued the 6% annual increase, but announced unilaterally that the annual increase would be reduced to 3% starting in 2016-17. The Harper government also moved to provide direct support for health care by making the Canada Health Transfer a strictly cash payment starting in 2014-15. Previously, the federal government had reduced the rate of taxation in certain provinces (tax points) to allow the provinces to collect some of the health transfer money through provincial taxes without an impact on the taxpayer. It is a subtle point but it goes directly to the discussion on whether there is a federal role in health care. The downside for provinces in using tax points is that a weak local economy may not be able to generate the revenue that a federal government is able to provide.
The Trudeau government was not able to renew the Canada Health Accord in 2017. Instead, they signed a series of bilateral agreements with the provinces based on a 3% annual increase plus a share in a $11B fund over 10 years to improve home care and mental health. The deal was 62% of the increased funding that the provinces had asked for. The annual federal outlay on health care (not counting Indigenous health) is currently $41B , or 12% of the federal budget. That amount dwarfs all other programs (including national defence!) except for elderly benefits, which comes in at 16% of the budget.
What the parties are offering
Canada stands out among OECD countries in not having drug or dental coverage as part of a national plan. The Liberals have studied the situation for pharmacare and plan to start negotiating with the provinces over the next 4 years. The Greens and the NDP have more immediate plans, including dental care. The Conservatives are pledging to maintain the focus on home care and mental health with a new emphasis on medical imaging. Here is a rough synopsis of new annual spending :
|Party||Annual new spending (Billions)||Highlights|
|Liberal||1.7||Family doctors, beginning pharmacare|
|Conservative||0.45||Imaging, disability tax credit|
|NDP||10.8||Dental coverage, pharmacare|
|Green||29||Dental coverage, pharmacare|
|People’s Party||0||Tax points transferred to provinces|
The key distinction among the NDP and Green platforms is that the latter would relieve the provinces from funding pharmacare, making it an entirely federal program – and likely reducing the Canada Health Transfer as a result. The Liberal’s proposal is underwhelming but they have credibility in having negotiated with the provinces. Both the Greens and the NDP would raise significant new funds to make such a program work, mostly from wealthy Canadians. Though the Parliamentary Budget Office has pointed out that rich people have lawyers, the approach has some merit given the prescription that the Liberal’s own report recommends for a more efficient delivery of medication to all Canadians that need them.