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In 2004, the CBC held a nation-wide television contest to choose Canada’s “Greatest Canadian.” The top choice of viewers from every part of the land was former Saskatchewan NDP Premier Tommy Douglas, the man who would go down in history as the Father if Medicare.

Saskatchewan’s 1962 medicare act became Canadians’ most treasured national social program. It arose from the strong social justice ethic of Prairie populism: that rich and poor alike should not have to lose their farms and homes to pay for drugs and hospital care.

Following Douglas’ lead, Liberal Prime Minister Lester Pearson introduced the Medical Care Act in 1966 which set out the five principles of medicare:

Medicare was to be comprehensive and cover all necessary physician and hospital services.

Medicare was to be portable, ensuring all services are available to all citizens.

Medicare was to be universal, covering every citizen across the country.

Medicare was to be accessible and available to every Canadian, giving citizens access to all covered health care services under uniform terms and conditions regardless of ability to pay. Medicare was to be publicly administered, making the government the single payer for all services. But medicare was no sooner made the law of the land by federal Liberal Health Minister Monique Begin in 1984 than trouble arose. That year, responding to an avalanche of direct charges by physicians to patients, called “extra billing,” the Liberal government brought in the Canada Health Act, 1984. It allowed the federal government to deduct one dollar from federal transfers to any province or territory for every dollar of patient charges, effectively ending user fees by physicians and hospitals.

In 1995, the Liberal government of Jean Chretien created the Canada Health and Social Transfer, replacing the old Established Programs Funding Program and the Canada Assistance Plan. It streamlined services, but it also reduced total spending on health care and social programs, leading to longer wait times and a period of reduced services. The provinces delisted some coverage such as eye care.

In 2004, Liberal Prime Minister Paul Martin signed a 10-year health accord with the provinces. The goal of his agreement was to “fix” health care “for a generation.” The accord covered 10 areas:

  • reduced wait times and improved access
  • strategic Health and Human Resources action plans such as home care, primary care reform (including electronic health records and telehealth) and access to care in the North
  • national pharmaceuticals strategy
  • prevention, promotion and public health
  • health innovation, accountability and reporting to citizens
  • dispute avoidance and resolution

Among the commitments in the accord was the agreement to increase health transfers from the federal to the provincial governments by six per cent a year starting in 2006/2007. By 2014, this increase amounted to a total of $41 billion in additional funding provided to Canada’s provinces and territories.

In December 2011, Prime Minister Stephen Harper continued his longstanding refusal to meet with Canada’s premiers and territorial leaders in a first ministers conference and instead sent Finance Minister Jim Flaherty to tell the provinces and territories what Ottawa was – and was not – prepared to finance going forward. Flaherty signalled that the Canada Health and Social Transfer will continue to have a six per cent yearly increase until 2017. But from then on, annual increases would be tied to growth in GDP until 2024.

Canada’s premiers have expressed concern about this plan. They say it does not go far enough to ensure the provinces will be equipped to deliver comparable levels of service at comparable levels of taxation, particularly given the rising levels of health care demands affecting Canada’s aging, chronically ill and northern populations.

The 2012 Report of the Council of the Federation Working Group on Fiscal Arrangements did an assessment of the fiscal impact of the current government’s fiscal proposals.

Not surprisingly, the Council found that the funding parameters for the major federal transfer programs favour the federal government.

For example, the growth rate in the Canada Health Transfer will drop from six per cent to nominal GDP growth and there will be no cost to the federal government beyond that limited protection already in place.

“In the medium term, the provinces and territories will (collectively) receive $5.9 billion less in federal funding in 2018-19…compared to what they would have received that year under the alternative scenarios considered by the working group,” the 2012 Report of the Council of the Federation Working Group continued.

“In the longer term, the lower Canada Health Transfer growth rate and limited Canada Health Transfer protection will continue to reduce federal transfers compared to alternative scenarios. Over the next 10-year CHT renewal period, the provinces and territories will receive $36 billion less in federal CHT cash than they would have under the 2007 budget plan with an escalator,” the Council of the Federation analysis states..

“The change in the Canada Health Transfer escalator in 2017-18, from six per cent to nominal GDP growth (expected to be four per cent on average), will reduce transfers by $25 billion cumulatively over the CHT renewal period. By 2023-24, the annual reduction in CHT transfers due to the lower escalator will grow to over $7 billion,” the council warns.

“The federal government’s decision to provide only limited protection to the provinces and the territories when the CHT moves to an equal per capita cash allocation in 2014/15 will reduce federal transfers by over $1 billion per year on average compared to the method by which protection was determined for change to the Canada Social Transfer,” the council states.

In 2014/15, a gap will remain between what is provided through the Equalization Program and what would be provided if the provinces were equalized up to the 10-province standard established by the 2007 program.

Over the five-year Equalization Program renewal period (2014/15 to 2018/19) this gap will be $16.5 billion or what would have been provided if all the provinces were equalized up to the ten-province standard set by the 2007 Program.

If the Equalization Program continues to be “constrained” beyond 2018/19, the fiscal impacts will be much greater. The December 19th federal proposal extends the GDP cap on Equalization to 2018/19 only. The Canada Social Transfer will continue to grow at a slower rate than the Canada Health Transfer, meaning that major federal transfers for post-secondary and other social services will comprise a progressively smaller proportion of overall major federal transfers.

Has Canada come to a point where it thinks it has to make a false choice between physically healthy populations on the one hand and a socially healthy society on the other – all to appease a bean-counting government?

During the worst years of the Great Depression, a sad little song made the rounds of the work camps and the unemployed riders of the rails:

“Sing a song of plenty, a planet full of fools
Everybody starving by sound financial rules;
The shops were full of good things, the factories likewise,
The Banker shut his books and said ‘We must economize!’”


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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