Singing a Different Tune and Embracing the Unknown

Cape Breton Island has a rich culture and fascinating history, matched only by its scenic routes and picturesque landscapes. The Island is highly sought after by vacationers searching for a new spot and golfers looking to play a few rounds at the famous Highland Links Resort. In addition, it is renowned for delicious seafood, hearty people, and, perhaps most importantly, the infamous “East Coast Kitchen Party,” which is an organization that promotes Atlantic Canada’s art scene.

Tourism Nova Scotia and the Government of Canada touts this embellished description of Cape Breton Island, however, it conflicts with a harsher reality: 16 per cent unemployment rate, reliance on government transfers, and a median income well-below the national average–in 2012, $26,160, compared with $31,320 nationally. Furthermore, several rural towns have disappeared, poverty is on the rise, and thousands of Nova Scotians have left the province for a better future.

Fixing these issues requires a momentous shift in the mindset of Nova Scotians and their elected officials. A different approach to natural resource development, for instance, may be the most helpful.

Cape Breton Island, and, in general, Nova Scotia, have a tremendous supply of natural resources, from oil in George’s Bank to natural gas in the Lake Ainslie area, not to mention coal deposits spread throughout the province. There are multiple local groups, however, that have convinced the public that natural resource development is not worth the risk, culminating in the decision to extend the moratorium on hydraulic fracturing indefinitely. Prohibiting all things that carry risk is a dangerous mindset, though. On one hand, residents of Nova Scotia demand jobs, and on the other, shun opportunities that would produce them.

Cape Bretoners must begin to sing a different tune. Industry experts suggest that hydraulic fracturing–colloquially known as “fracking,” could generate nearly $1 billion annually in the province. Former “ghost towns” in Pennsylvania, for instance, have begun booming due to natural gas development in recent years: the unemployment rate in the state is 5.6 per cent, compared with 6.1 per cent nationally, and as a whole, the industry supports roughly 1.7 million jobs in the country. Moreover, natural gas is a much more sustainable and environmentally-friendly alternative to coal and oil. Lastly, the correlation between fracking and earthquakes is weak and instances of pollution occurred due to breaches of government regulation.

Although there are risks associated with fracking, as is the case with any venture, those who are concerned about them exaggerate their scale and probability. Instead of banning the practice, the sensible approach would have been to mitigate the chance of disaster through sound regulation. Furthermore, natural resource development can provide support for local communities. In the United Kingdom, for example, the chemical firm Ineos offered local communities 2 per cent of profits from wells in the area to support hospitals and parks, and 4 per cent of profits to residents who own land near drilling sites. Greenpeace described this practice as a “bribe,” however, it is a common one in the United States that has delivered massive benefits to local communities. A similar approach in Cape Breton Island, and in Nova Scotia, could benefit communities tremendously, and a sound regulatory regime would reduce the risk of environmental damage.

In addition to the picturesque landscapes in the Tourism Nova Scotia commercials, the province should hoist an “Open for Business” sign. At least we could then start to improve the lives of Nova Scotians. In the meantime, however, shunning all, and every, opportunity to create jobs and generate economic growth will reinforce the status quo.

Corey Schruder is an AIMS on Campus Student Fellow who is pursuing an undergraduate degree in history at Cape Breton University. The views expressed are the opinion of the author and not necessarily that of the Atlantic Institute for Market Studies

Private Health Care, ‘Queue Jumping,’ and Consumer Choice

Twenty years ago, Canada’s first private MRI clinic opened in Calgary (unsure, albeit, of its viability). Fast forward to 2013 and there are dozens of these clinics in Alberta, British Columbia, Nova Scotia, and Quebec. Whereas Medicare provides patients in need with access to diagnostic imaging, the market for private imaging supplies patients with non-urgent conditions.

Medicare’s average wait time for non-urgent MRIs ranges from months to years. As a result, several frustrated patients opt to pay for an MRI instead, although this option is presently in danger.

The Alberta College of Physicians and Surgeons recently suggested a provincial ban on private MRI clinics on the grounds of equity and queue jumping. At this time, however, there is no tabled legislation.

There is a problem in applying the idea of ‘queue jumping’ to this scenario. People opting for private MRIs are not jumping the line. On the contrary, they are leaving it altogether. When an individual leaves the public queue, for instance, it makes room for others who would otherwise have to wait longer. Furthermore, private MRI clinics exist solely because of private payments. In this way, there are no losers.

Furthermore, the critique on equity grounds is weak. Although it is arguably true that inequality of access increases with private clinics, everyone, including those who remain in the public system, receives better access.

Despite the intentions of those who oppose private clinics, I wonder whether they prefer worse access for everyone–so long as it is equally worse access.

The broader issue is comparing perceived problems with private clinics to the status quo. Particularly, when a government controls the distribution of infrastructure, the temptation of politicizing reform, regardless of its necessity, becomes widespread.

In 2010, for instance, New Brunswick Premier Shawn Graham announced a new MRI machine to Miramichi–a provincial swing riding–during his election campaign. This raised questions about whether Graham’s concession to Miramachi reflected his desire to win votes or an evidence-based assessment. When private firms invest, however, there is no such confounding variable. Private MRI clinics, therefore, theoretically align with health resource needs, even if their services are publicly insured.

It will be interesting to see how this debate moves forward.

Possible outcomes, for instance, range from banning private MRI clinics (thus, increasing provincial fiscal responsibility and running contrary to public opinion) to staying the status quo. Furthermore, provincial governments could even extend insurance coverage to include private MRI clinics, leading to a private-public venture.

Nevertheless, access to additional health services, such as private MRI clinics, is essential. If consumers are free to spend their money on cars, vacations, and phones, allowing them to spend their money in pursuit of better healthcare is commonsense.

Mike Craig is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

On Health Insurance in Canada

Canada’s healthcare system is a source of pride for many citizens–it forms a strong part of our national identity. Indeed, the universality of health insurance, which provides services free at the point-of-care, seems like a noble goal.

Because Canadians value healthcare so much, it is worth asking what the dangers of the current system are. Frankly, it could save lives.

Currently, as stipulated by the Canada Health Act, each province receives federal funds to run a public health insurance agency: Medicare. These funds can be subject to certain reductions in proportion to the amount of private healthcare activity occurring in a province. Thus, provincial health policy freedom is somewhat fiscally constrained by the federal government.*

Medicare tends to be associated with long waiting lists for healthcare. The Canadian Wait Time Alliance (WTA) tracks wait times in Canada, as do the Canadian Institute for Health Information (CIHI) and the Fraser Institute. These studies all suggest that wait times for medical care, while already substantial, have been slowly increasing. While difficult to objectively measure, it is entirely probable that Canadians suffer, get sicker, or die while waiting for medical care.

In parallel, the labour market for Canadian doctors is sometimes poor. About 16–20% of new medical specialists in Canada, according to the Royal College of Physicians and Surgeons, cannot find work every year.

Herein lays the paradox of Canadian health policy as it exists today. How can there be potentially thousands of unemployed Canadian doctors looking for patients and, at the same time, close to a million patients waiting for medical procedures?

Opponents of a parallel private healthcare system are right to question whether it would reduce waitlists–after all, a private system would pull doctors from the public system. However, the implicit assumption here is that every doctor starts out employed. In the current state of affairs, a modest proposal would be to allow doctors for which there is “no room” to start accepting private health insurance payments. This would not require a cent of government expenditure, and may actually help government balance sheets–the only thing that would be drawn from the public system is patients on waitlists. Additionally, this could increase access to care for those who remain in the public system.

Surely, there are better ways of retaining universal health insurance coverage for all Canadians, while addressing the systematic harms it can produce. That sounds like the kind of Canadian innovation I am proud of.

Mike Craig is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

*A previous edition of this piece stated that, in 2014, the Canada Health Act is up for renegotiation, when in fact it is the Canada Health Accord. In addition, the Canada Health Act does not explicitly ban private health insurance at the provincial level, although this is subject to interpretation of Section 12.