The Problem with the “Canadian Model”

The successes of Canadian single-payer are overstated — not because of outsized government involvement, but because public provision isn’t generous enough.

(Vancouver Coastal Health/ Flickr)

Canada’s universal public health care system is a political football in American politics. Liberals cite it as a model, while conservatives use it is an example of government inefficiency that leads to substandard care and, even worse, death panels.

Liberals do have a stronger argument. Canada’s single-payer system has obvious advantages over its private-heavy American counterpart. There are lower administrative costs. A catastrophic illness will not result in bankruptcy for low- and middle-income households. Regardless of class, people generally get the care they need.

But the successes of the single-payer are habitually overstated — not because of outsized government involvement, but because public provision isn’t generous or expansive enough. Gaps have always existed in Canada’s system, and despite 90-plus percent public support, there’s been a slow-but-determined chipping away at the social program.

Universal health care in Canada may now be part of the national identity, but it was not inevitable. Constitutionally, health care falls under provincial jurisdiction. The federal government, however, is free to supplement its funding. This has led to many periodic clashes between the provinces — whose largest budget item is health care — and the federal government, without which a universal health system with certain minimum standards would be impossible.

Saskatchewan Premier Tommy Douglas was the first social democrat to win provincial government in Canada, under the banner of the Co-operative Commonwealth Federation (CCF). Douglas campaigned to introduce universal public health care in the 1960 provincial election. During its previous sixteen years in power, his government had run up a surplus while pursuing a social democratic agenda.

While Douglas had introduced some health care reforms earlier in his term, the national situation was changing. In 1956, the craft unionist Trades and Labour Congress of Canada and the industrial unionist Canadian Congress of Labour merged, creating the Canadian Labour Congress (CLC).

The amalgamation had many similarities to the creation of the AFL-CIO, with one major difference: the CLC sought to create a labor party. This idea was realized in the creation of the New Democratic Party (NDP) in 1961. Union membership across Canada also grew after the formation of the CLC. Organized labor’s growing clout was directly responsible for the expansion of the Canadian welfare state.

The bill to create universal public health care passed the Saskatchewan legislature in late 1961. Douglas had resigned his premiership to become the first leader of the federal NDP, in part to bring the struggle for universal health care to the national level. His successor Woodrow Lloyd was left to implement the system — but he would face a conservative backlash.

On July 1, 1962, Saskatchewan’s doctors went on strike against the new universal system, fearing lower pay and excessive government interference in their practices. Lloyd’s government brought in doctors from Great Britain and the United States to maintain services during the work stoppage.

Twenty-three days later, the strike was over. The government, and the vast majority who would benefit from universal provision, had won. The provincial government and the doctors each agreed to concessions, but the basic framework for universal health care across Canada had been set. Doctors would bill the provincial insurer for services performed, and fees would be bargained between the doctors’ association and the provincial government.

In 1967, Prime Minister Lester Pearson’s minority Liberal government, with the support of the NDP, passed the Medical Care Act, which promised to cover 50 percent of the costs of provinces who offered free access to doctors’ offices.

But this history, which has taken on a hagiographic cast in Canada, omits the gaps in the system.

There was strong opposition during its creation, and conservative forces have continued to push for greater private involvement in health care as Canada restructures itself along neoliberal lines. As inequality has increased, the gaps have grown wider.

The two largest holes in Canada’s health care system are the lack of universal coverage for dental care and the inadequate defraying of optical and prescription drug costs. As of 2012, an estimated one in five Canadians — disproportionately women, the unemployed, and freelancers — did not have the supplementary private health insurance that foots the bill for these services.

While employer-offered supplementary coverage was once ubiquitous, the rise of precarious work has helped produce this two-tier system. And though First Nations, Métis, and Inuit peoples are eligible for public health coverage that other Canadians lack, colonialism and racism have contributed to lower health outcomes.

Canada has undergone a rightward shift over the past couple decades. Transfers to the provinces for health and social programs were slashed in the 1990s (though they increased modestly in the early 2000s during a time of budget surpluses). What was supposed to be 50 percent federal government funding for health care became 10 percent during the austere 1990s, and 20 percent in the early 2000s.

Now, Prime Minister Stephen Harper’s Conservative government is threatening to cut health expenditures again. A ten-year health accord between the federal government and the provinces expired on April 1. The federal government chose not to renew it, instead announcing that health care outlays will increase 6 percent per annum until 2017; subsequently, it will be tied to the rate of economic growth with a minimum annual increase of 3 percent. In the first ten years of the formula, this amounts to a $36 billion cut in provincial funding — wholly inadequate given Canada’s demographic shifts.

Provinces with older populations will be hit the hardest. Given the prevailing neoliberal logic, they will turn to more private delivery of services. It’s a strategic move to introduce the profit motive by structurally engineering the conditions for it.

The Harper government imposed further austerity when it acceded to the European Union’s demands on drug patents during negotiations over the Comprehensive Economic and Trade Agreement (CETA).

Canada’s pharmaceutical costs are the second highest in the OECD. (The US, of course, is first.) A full $11 billion could be saved through a pharmacare program. Instead, CETA will cost Canadians anywhere from $850 million to over $1.6 billion per year in higher drug costs, likely exacerbating the already-inequitable access to medication.

Then there is the Harper government’s almost sociopathic decision to cut refugee health care. Refugees from countries the Canadian government do not classify as dangerous will not receive comprehensive health care. The shrinking of coverage has been aimed at refugees like the Roma from Hungary. Although a recent court ruling deemed the cuts cruel and unusual and thus illegal, the government is vowing to appeal.

Canada finds itself in a vicious cycle. The often long wait times for elective and non-emergency surgery are played up by the press. Government deficits are adduced to justify a greater private role in health care delivery. Then amid the deficit hysteria, some provinces quietly drop coverage for certain services.

Universal health care is not just being eroded via underfunding. The federal government has been unwilling to enforce the Canada Health Act, which makes funding contingent on meeting certain standards. The lax regulatory environment has led to a proliferation of private clinics across Canada and inequitable access to some medical services.

Abortion access is also being curtailed. In July, a nonprofit women’s health clinic in New Brunswick was forced to close its doors after the provincial government refused to fund it.

Though there is no law regulating abortion in Canada, all provinces have varying restrictions on government-funded abortions. Women seeking an abortion have to meet a particularly high bar in New Brunswick. There, abortions are only covered when: performed before the sixteen-week mark, carried out by an obstetrician or gynecologist in a hospital, and after two doctors have signed off on the procedure.

Prince Edward Island (PEI) is even worse. The province doesn’t have a single medical facility that can perform abortions. This has led to instances in which women have harmed themselves because they didn’t have abortion access. Pro-choice activists have long argued these regional variations violate the Canada Health Act. Still, PEI Premier Robert Ghiz said this spring, “I believe the status quo is working.” He can get away with such comments and policy positions because the federal government has never intervened to ensure equitable access.

Finally, some physicians are using the courts to try to marketize Canada’s heavily public delivery model. The case of Dr Brian Day in British Columbia (BC) could be the most serious legal challenge ever to single-payer. Day contends that patients should be able to access and pay for medical treatment without the wait times found in the public system. However, to really understand Day’s motivations, one needs to take into account that in 2012, the BC Ministry of Health found that his for-profit clinic was double billing — that is, sending a bill to both the patient and the provincial health plan.

Single-payer activists in the US have much to learn from the Canadian experience.

First, as far away as victory may seem, it doesn’t mean that one can demobilize upon achieving it. The only reason the overwhelmingly popular Canadian system is experiencing retrenchment is because of mass disengagement. Popular social welfare programs have long been under attack in the US as well. Even the Affordable Care Act, which extends coverage mostly by shoring up the private insurance system, was excoriated, and will continue to be excoriated. Winning single-payer will require people in the streets, before and after the bill-signing ceremony.

Second, universal in theory doesn’t mean universal in practice. There are still inequalities in health in Canada based on one’s economic position. The US is even more unequal. That’s why fighting for things like dental coverage and cheaper prescription drugs is so important.

The third lesson is to keep expanding. Even if certain services become universally covered, keeping the pressure to extend coverage is essential. Though there have been some calls from Canadian progressive organizations for a prescription drug program, there is very little pressure to do so. As long as the system is unable to cover more services, it is easier to undermine.

A fourth takeaway: a federal enforcement mechanism is needed. Given the inequities in Canada’s health care system, there is little choice but to fight for a national solution. That doesn’t mean that fighting for equality of access at the state or local level should be ignored, especially when it comes to abortion access. But a federal commitment to universality is essential.

Finally, look beyond the hospital and doctor’s office. Canada doesn’t do as much as it should when it comes to preventative health care. Politicians in Canada are certainly not talking about the social determinants of health. Poverty and inequality put pressure on the health system. They affect quality of life and impel more people to seek health care. A truly efficient health care system is one that works in tandem with strong anti-poverty programs.

Winning single-payer in the US would be an enormous achievement, one that would both reflect and require a shifting balance of power. While the US couldn’t and shouldn’t blindly ape another nation’s health care system, the Canadian case remains instructive.

It shows a single-payer system is feasible, desirable, and, above all, perpetually incomplete.