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Federal pharmacare

13 iStock_000000740072Medium-1Prescription for an ailing federation?

by Greg Marchildon

For the past six years, health care has been at the top of the federalism music chart. During this time, first ministers’ meetings have become a set piece. Before the meeting is called, the premiers demand more money for health care from Ottawa – knowing that they will not get what they are asking for. The prime minister brushes off these initial demands in public, but meanwhile the federal government enters into private negotiations with the provinces to reach an agreement. Once the dollar figure is in the federal ballpark, the prime minister schedules a formal meeting.

The exception to this pattern was the September 2004 first ministers’ meeting that produced the so-called “Ten Year Plan to Strengthen Health Care.” In contrast to earlier meetings, Prime Minister Paul Martin made no real attempt to get even a rough agreement in advance. The premiers went into the meeting with their largest-ever demand: that the Prime Minister put enough money into the Canada Health Transfer to close what they called “the Romanow gap” (see glossary on page 96) and that the federal government also take over provincial drug plans. While no precise dollar figure was produced for the drug proposal, the provinces were in effect asking Ottawa to pony up close to $8 billion annually, the amount they were collectively spending on prescription drugs for their respective residents.

At the time, Premier Ralph Klein of Alberta congratulated himself and the other premiers for their “stroke of brilliance.” Indeed it might have been, but only if the premiers had walked in with a workable blueprint of how such a major innovation would improve prescription drug coverage at a reasonable cost and simultaneously facilitate health reform. Instead, they came to the first ministers’ meeting without even a sketch of what a federal pharmacare program would look like, much less accomplish. They thereby confirmed the sceptics’ conclusion that the premiers’ offer was about cost-shifting, not about improving health care for Canadians.

Given the ephemeral nature of the provincial pharmacare proposal, it was relatively easy for Martin to brush it aside and focus on the reduction of wait lists. This was the item at the top of his agenda, even though it fell entirely within provincial control and jurisdiction. On the pharmacare proposal, the Prime Minister stuck to the short-term recommendations in the Romanow and Senate reports of 2002, and asked that some of the federal money be used to improve catastrophic drug coverage while shunting consideration of the pharmacare proposal to a federal-provincial ministerial committee. Here, it will be dead easy – and publicly justifiable – for Ottawa to veto any ambitious proposal on federal pharmacare given the already huge amount that it is transferring to the provinces as part of the Ten Year Plan deal.

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About the Author

Greg Marchildon
Greg Marchildon is Professor and Canada Research Chair in Public Policy and Economic History at the University of Regina.


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