May 13th 2011: Who should pay for the health care of Canadians? The users of the publicly funded health care system are also the ones who pay the necessary taxes, of course. But there is no consensus on the level of government at which those taxes should be levied. This question has been a hard political issue in the past – and it’s about to get a whole lot harder.
Health care funding has been remarkably stable and peaceful since 2004 – a brief “golden age” with respect to health care funding. This stability was largely due to two increases in federal transfers for health care: first a 2003 federal-provincial agreement, providing a five-year, $16 billion transfer of funds; and second the 2004 Paul Martin accord with the provinces, a $41 billion deal with annual increases in health care transfers of six per cent until 2014. Of course, these increased transfers were possible because the federal government was bursting with cash at the time and generating fiscal surpluses during a period of strong and sustained economic growth.
The times have now changed. Canada’s governments are in collective deficit of about $100 billion, and all of our governments will need to implement detailed plans if they are to get back to a balanced budget and keep their public debt levels under control. Health care spending is the dominant budget line for all of the provinces, so financing of the publicly funded health care system will inevitably work its way toward the top of the federal-provincial agenda very soon. Cash-strapped provinces that are already beginning to raise taxes may have to consider federal financial intervention into health care in a very different light.
To further complicate the debate, aging demographics in Canada and internal cost drivers like salaries, drugs and new technology are placing chronic upward spending pressures on the publicly funded health care system. Something is going to have to give – by increasing available annual funding for health care, controlling the rate of spending growth, introducing some alternative approaches to delivery, or a combination of all three.
To address these issues in detail, The Conference Board of Canada is launching a new research initiative, called The Canadian Alliance for Sustainable Health Care, or CASHC. CASHC is intended to provide Canadian leaders and policy-makers with insightful, forward-looking, quantitative research and analysis of the sustainability of the Canadian health care system and all of its facets. Ideally, the work of CASHC will help Canadians to better understand the conditions under which Canada’s health care system will be made sustainable. CARP is a member of CASHC and will be an important voice in the discussion, representing the interests of the consumer. So, who should pay for the health care of Canadians? Through CASHC and its research, we would like to help answer that question.
To read the CASHC press release issued today, please click here
Keywords: healthcare, costs