A Comment on the Health Care Debate – or is that Debacle?

by Terrance Hunsley, Editor, Social Canada.org

Prime Minister Trudeau and the Premiers have been taking their arguments on health care funding to the public airways lately.  Good that it’s winter, as there is more heat than light generated in the exchanges. 🙂 Before the federal election last year, The Pearson Centre commissioned me to produce a report recommending federal action on seniors health care. Although my recommendations for overall federal health funding were comparable in amount to what the provincial premiers are asking, I think it is only fair to point out some misinformation that they have been fomenting.

In essence, they are asking Ottawa to increase their share of health care costs from 22% to 35%. They have been pushing these figures for many years now, and the back story begins in 1977. At that time, the federal and provincial governments reached an agreement whereby the federal government would stop sharing provincial costs on a 50-50 basis. They converted the federal share into a cash transfer equal to about 35%. To make up the other 15%, the federal government decreased federal income taxes and the provinces simultaneously increased their income tax to make it up. It was called a tax point transfer, and the benefit for provinces was that it would increase each year in value, proportionate to economic growth. So now,  if they were making the point that the imputed federal share was 37% and should go up to 50%, it would more accurately show how the federal government has been underfunding health care, and I think that would be more meaningful to voters. The provinces might also acknowledge that the federal government also makes substantial health expenditures for indigenous communities, veterans, health research and food and drug safety. 

Trudeau insists that he wants the provinces to guarantee service improvements such as wait times in hospitals, if he is to increase federal contributions. I agree that he should insist that provinces report regularly using coherent, publicly meaningful information. But grabbing a couple of hot button issues like wait times for hospital procedures, is not the way to do it. Clearly, wait times for specialized procedures are important. But so are the services which keep people out of surgical units, emergency rooms, or institutional long term care. We need improvements in health care, and we need them to be undertaken, not on a piecemeal basis, but across the board. We need more team-based primary care, especially for seniors who acquire disabilities and chronic diseases. We need far better home care, or we will have (mainly) women leaving their jobs and sacrificing future income to look after loved ones. We need nonprofit housing options that permit people to live independently in their community. 

It appears that the Ontario government is prioritising low income and marginalized people in their health care plans, but with the intention that everyone else will be paying for an increasingly privatized system. That means that for most people, their health care will reflect their purchasing power. Not the way to go. 

The federal government should insist on national health standards that state what every Canadian resident will be entitled to as a right to health care. There are health experts in the country who could come up with a template for federal-provincial agreement, and cover the peak indicators across the health system. It should be integrated with the Canada Health Act. An independent Canadian Health Standards Council reporting annually to federal, provincial and indigenous governments should be empowered to collect and report information on the standards. The Canadian Institute for Health Information and Statistics Canada could be assigned the technical information collection and collation.  

2 comments

  1. Provinces claim lack of capacity, compared to feds. But what tax tools does fed govt have that provs don’t? Indeed, PST is often higher than GST (in Ont 8% PST vs 5% GST). And provs like Ont charge health premiums and deductibles as well as co-pays (my wife and I pay $1400 per year for premiums ($600 each) and deductibles ($100 each). So, capability is not the issue.

    And what about tax capacity. Let’s take Ont as an example (the other large provs are not much different). The fed personal tax rate for up to about $50,000 taxable income is 15%. The provl rate is 5.05%. And that discrepancy is true up to max levels. So money is also not the issue. The larger provs could easily raise the cash they need. Indeed, each of the larger provs have higher budget surpluses than their proportional share of their demand.

    So, what is the issue? Clearly, it’s political. Provs don’t want to take the political hit for raising taxes. They, not surprisingly, prefer the feds to increase their taxes or increase their deficits and pass the cash to them. Without strings (like actually spending it on healthcare) if possible. With fed cash, they can use their tax revenue for giveaways that increase public satisfaction with their actions. Then, of course they claim to be sound managers of the public purse.

    Finally, knowing that healthcare issues will not be easily solved, they are on a public relations effort to shift blame for healthcare problems to the feds “failure” to provide cash. Similar strategy to Conservative effort to make the convoy “Trudeau’s problem”. Is it working? An enabling media is certainly helping to do so. Canadian federalism at work.

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    • Good point. Most provinces could raise taxes on their own to pay for better health care. There is some advantage to having the federal government raise the revenues, as there is an equalizing factor in applying the same rate across provinces, and the federal government can insist on at least some level of consistency across the country.

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