The 2004 federal-provincial health accord recently completed its 10-year run and expired on schedule. It was heralded at the time of its signing as a landmark agreement that would solve many of the wait-time issues plaguing Canada’s health-care system. In retrospect it achieved little and was expensive to boot.
And yet, some misguided news commentators, ex-premiers and celebrities lamented its demise. These voices were reinforced by a series of nationwide protests (organized by groups such as the Canadian Health Coalition) that were designed to scare Canadians into thinking that the expiration of the 2004 health accord will lead to a collapse of the health-care system.
It means nothing of the sort.
The Canada Health Act remains fully intact and continues to set the terms and conditions that dictate transfer payments from the federal government to the provinces for health care, .i.e. public administration, comprehensiveness, universality, portability, and accessibility. The 2004 health accord simply specified that the Canada Health Transfer, the major federal funding transfer to the provinces for health, would grow at six per cent annually for 10 years until 2014.
Additionally, the end of the 2004 Health Accord does not end health transfers to provinces. In fact, the federal government has already promised an extension of the annual six per cent increase in transfer payments until 2016-17. After that, the rate of increase will be set by a three-year moving average of nominal economic growth, with a minimum three per cent annual increase guaranteed regardless of the state of the economy.
Despite all this, some, such as the Canadian Health Coalition, are trying to convince the public that the possibility of smaller increases — note, increases but simply not as large — in years when the economy is not doing well, actually constitutes a decrease or cut in spending to the tune of $36 billion.
To help illustrate this absurd logic, all one has to do is look at the CHT projections from the very same report that the coalition cites. It estimates a federal health transfer of $30 billion in 2013-14, and projects a $47 billion transfer in 2023-24. Clearly, no “cut” in spending there.
Further, the total federal health transfers to the provinces over this 10-year period add up to almost $400 billion, while annual “increases” after 2013 alone add up to about $17 billion. Again, no “cuts” there either.
So, how then do they come up with the $36-billion cut? By employing a hypothetical projection over 10 years that assumes larger annual increases than those increases promised by the federal government, and then simply calling the difference a “spending cut.”
No “decreases” in health transfers anywhere.
There remains, however, the important question of whether the end of the 2004 health accord might mean longer wait times for patients in the future.
The answer to this question is less clear. The previous health accord also created national wait-time benchmarks, attempted to tackle wait times and established the Health Council of Canada to monitor progress (or lack thereof).
However, not only were the established benchmarks incredibly long (for example about six months for hip replacement), but they only applied to five “priority” procedures — and even then were generally not met. In fact, the Health Council itself noted that “wait-time benchmarks are not yet fully met in most of the priority areas,” and that “overall, the accords didn’t lead to the major changes that were expected.”
Big surprise, given that the decade-old health accord never sought to change Canada’s queue-style approach to health care into something more European. The result of such non-action, as the Fraser Institute’s annual report on wait times found when other specialties were included, was that Canadians faced an 18-week wait from referral by a general practitioner to receipt of treatment in 2013 — about the same length of time they faced in 2004 (when the accord was introduced), and significantly higher than the nine-week wait they faced in 1993.
Unfortunately, given the current government monopoly on health-care insurance, the lack of appropriate incentives and an unwillingness to consider policies to reduce wait times that seem to have been successful in European countries with universal health care, it is entirely possible that Canadians may continue to experience some of the longest wait times in the developed world.
This undesirable situation will, however, certainly not be the result of the end of 2004 health accord. In fact, the experiences of the last decade have convincingly demonstrated that simply throwing more taxpayer money at the wait-time problem will not make it go away.
Bacchus Barua is a senior economist at the Fraser Institute.
