National Newswatch
National Opinion Centre

During the 2011 federal election, the federal Liberals ran a poll on their website asking Canadians to choose their favourite anti-medicare quote from Prime Minister Stephen Harper.

There were four options:

“Canada is a Northern European welfare state in the worst sense of the term, and very proud of it.”

“Our health care will continue to deteriorate unless Ottawa overhauls the Canada Health Act to allow the provinces to experiment with market reforms and private health care delivery options.”

“Moving toward alternatives, including those provided by the private sector, is a natural development of health care.”

“Governments across this country have experimented with alternative service delivery…We’re not going to wave the finger at provinces because they experiment with different delivery.”

The top quote won.

Although it’s the social program most cherished by Canadians, universal health care has been under attack from both Liberal and Conservative governments almost from its inception.

Liberals chafe at it because it gobbles up too much of the federal budget. Conservatives dislike it on principle because it offends their free market, small government, low tax, libertarianism.

All this leaves medicare on life support. Today, it’s reached the point it could be compared to the Cheshire Cat in Alice in Wonderland:  “…it vanished quite slowly, beginning with the end of the tail and ending with the grin, which remained some time after the rest of it had gone.”

Medicare began with great promise under Lester Pearson’s Liberals in 1966, a pledge of 50/50 cost-sharing between Ottawa and the provinces. It wasn’t to last.

Medicare has always faced two implacable enemies. There is the market economy and its inevitable  wild rides playing perpetual havoc with government budgets. But far more important are the relentless attacks from  Canada’s mushrooming phalanx of libertarian think-tanks daily grinding out columns and op-ed articles denouncing and demeaning all social policy as “waste” and equalization as “welfare” for “uncompetitive” governments who aren’t “innovative” and, most importantly, refuse to slash taxes.

In 1977, Pierre Trudeau’s Liberals replaced 50/50 cost-sharing with block funding. The next year, doctors began extra-billing in some provinces to raise their incomes.

Medicare’s fortunes shone brightly – but only briefly – again in 1984, when Trudeau’s health minister, Monique Begin, introduced the Canada Health Act. Its famous five principles of universal health care regardless of ability to pay – universality, accessibility, comprehensiveness, portability and, public administration – passed unanimously in Parliament. Although long a dead letter, the Medicare act still allows the federal government to deduct one dollar in federal transfers from a province for every dollar of direct patient charges in that province. It also abolished user fees for insured physicians and hospital services.

In 1995, in the midst of another global economic recession, Liberal Finance Minister Paul Martin introduced the Canada Health and Social Transfer, making massive cuts in transfer payments for health and social programs. Federal health dollars, already a mere vestige of the original 50-50 promise at just 10.2 per cent, slipped further to 9.2 per cent of Gross Domestic Product in 2000.

In 2002, the Romanow Royal Commission on the Future of Health Care in Canada reported, advocating stable and predictable long-term funding, new approaches in primary care, centralized management of waiting lists, a national home care strategy and improved coverage of prescription drugs, among other things. But it was largely ignored, again, because of costs.

In January, 2012, just nine months after receiving his long-awaited “strong, stable, majority Conservative government,” the prime minister sent his finance minister, Jim Flaherty, to meet with the provinces on cost-sharing.

There was no negotiation. In his trademark “my way or the highway,” Harper simply told the provinces to take it or leave it.

Henceforth, the provinces learned, Ottawa will provide per-capita funding for its share of provincial health costs but will keep the cap on equalization transfers to so-called “have-not” provinces.

At the time, Manitoba’s Finance Minister Stan Struthers called it “an upside-down transfer of funds within our Confederation.

“Every province contributes to the federal government’s pot of money for transfer payments, and every province, including Alberta, receives money from the transfer payments pot of money,” he said in an interview.  “Every one of us,” he stressed again. “And every one of us, at one time or another collected equalization money, including Alberta. So we all pay in and we all – every province – receive money from transfer payments. So when you cap one and leave the other side to rise through per capita, that is an upside-down transfer of funds within our federation.”

In its 2012 budget, the Harper Conservatives made significant cuts to health care. Health Canada faced reductions of $200.6 million;  the Public Health Agency of Canada planned cuts of $68 million, a reduction of almost 11 per cent;  and the Canadian Institutes of Health Research faced a budget decrease of $45 million

According to the Parliamentary Budget Office, the federal share of the health care envelope, now at  20 per cent, will fall to just 12 per cent over the next 20 years should the current government stay in office.

“The current government’s ideological position is that health care is provincial,” says Mike McBane, director of the pro-medicare Canadian Health Coalition. “The best public health care systems have more public health care than Canada. People need to have the health care system follow them when they come home from the hospital.”

The 2014 federal budget takes yet another run at Medicare. The Harper government is eliminating the equalization portion of the Canada Health Transfer (CHT) and replacing it with an equal per capita transfer.

“This means that less populous provinces with relatively larger and more isolated populations will have more and more difficulty delivering more expensive universal services,” McBane wrote in an article published in The Hill Times in February.

“Likewise, provinces with a relatively larger proportion of older residents will also be hampered in delivering universal quality care. The move to an equal per capita cash transfer will widen the gap between the have and the have-not provinces and make it impossible to maintain national standards in health care.”

The premiers have estimated that this one budgetary move will create a funding gap of $16.5 billion over the next five years for have-not provinces. Not surprisingly, given that the Conservatives are setting the rules, the only province to benefit is, you guessed it, Alberta, with its younger, growing population.

Nor is that all. Another regressive change is to occur in 2017 when the six per cent annual increase for the health transfer will be replaced with a formula that links the health transfer to economic growth.

This is positively perverse. It means that in times of high unemployment and economic downturn, when Canadians need access to care the most, the federal transfer will be reduced. This measure alone cuts $36 billion from federal health care funding over the next decade.

McBane says the shrinking level of federal health funding will be matched by the withdrawal of federal enforcement of national standards contained in the Canada Health Act.

“The use of the spending power to establish national standards is common in all OECD countries, he continues. “National Medicare will clearly not survive this ‘cut and run’ course. Instead, it will fragment into 14 separate pieces where access to essential care will depend on where you live and your ability to pay.”


Frances Russell was born in Winnipeg and graduated from the University of Manitoba with a Bachelor of Arts degree in history and political science. A journalist since 1962, she has covered and commented on politics in Manitoba, Ontario, B.C. and Ottawa, working for The Winnipeg Tribune, United Press International, The Globe and Mail, The Vancouver Sun and The Winnipeg Free Press as well as freelanced for The Toronto Star, The Edmonton Journal, CBC Radio and TV and Time Magazine.

She is the author of two award-winning books on Manitoba history: Mistehay Sakahegan – The Great Lake: The Beauty and the Treachery of Lake Winnipeg and The Canadian Crucible – Manitoba’s Role in Canada’s Great Divide. Both won the Manitoba Historical Society Award for popular history.

She is married with one son and two grandsons and lives in Winnipeg.

The views, opinions and analyses expressed in the articles on National Newswatch are those of the contributor(s) and do not necessarily reflect the views or opinions of the publishers.
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