Why Quebec's Health Care Policy Matters to the West
They are as different from each other as St. John’s is from Vancouver, but all of Canada’s provincial health care systems fall under two “laws.” The first law is the Canada Health Act, which defines the national rules of the game. The second law you may be more familiar with: it is the law of continuously growing costs.
Health care costs represent the largest single expense in every province’s budget and they keep on rising and rising. Unless something changes, governments will soon have no choice but to scale down health services or go bankrupt. The only way to avoid a reduction in services is to use expenditure and/or income measures to return to health care financial sustainability.
On the expenditure side, many of this year’s provincial budgets featured a section on each province’s plan to curb health care costs over the next three, four or five years. The majority of observers expressed skepticism about those plans, and rightly so. Provinces have shady track records in this area. In short, an expenditure-based solution is very unlikely in the near future.
As to the income side, two obstacles stand in the way of any province that wants to raise revenues to mitigate rising health care costs. First, the Canada Health Act says that necessary medical services must be available to all on a prepaid basis. (In other words, the sick do not pay more than the healthy). Second, tax increases are very unpopular and most of the time they spell doom for the governments who implement them. No elected provincial government in their right mind would want to increase its revenues to finance health care.
Well, wait a minute. That’s what the Quebec government just did. Last March, the province’s budget introduced a new annual tax levy earmarked for health care, as well as a user fee to be applied each time someone uses the public health system. Not surprisingly, there was a strong backlash in Quebec against the Charest government following those announcements. However, as unpopular as those measures may be, they are the right thing to do.
But why Quebec? Quebec faces the same pressures as the other provinces: increasing costs due to expensive new technology, and losses in service quality. But on top of this, Quebec’s public debt is the worst across the country on a per capita basis. Also, within a few years, Quebec’s working-age population will start shrinking: there will be fewer workers to finance health care for an increasingly aging population. So Quebec is the canary in the health care coal mine: it is closer to the danger zone than other provinces are.
What happens next? Health care premiums are nothing new (many provinces had or still have them in place), but user fees are a whole different story. The federal government may very well challenge the new “Quebec way” under the Canada Health Act. This should be a cue for other provinces, including the West, to add their voices to the debate. All should make sure that unrestricted availability doesn’t make health care financially unsustainable. Otherwise, the best would become the enemy of the good.
There is some room for negotiation here. If one reads between the lines of the last Flaherty budget, it looks like the federal government wants to gradually move out of provincial areas of jurisdiction. Health is one of those areas. Why not revise the Canada Health Act to reflect today’s and tomorrow’s demographics, and allow provinces to seek new forms of revenue to support their health care systems?
Eventually, all provinces will have to face this issue as Quebec did. In Canadian health care, demographic timing is the only real difference between jurisdictions. Time to open the discussions. Federal-provincial negotiations are not the most exciting way to enjoy a weekend, but they sure beat spending it in the waiting room of an underfunded hospital.
Jacques Marcil is Senior Economist for the Canada West Foundation. This opinion editorial can also be found in the May issue of Currents, the monthly economic snapshot newsletter.