Reforming Canadian Healthcare

The provinces are responsible for administering and delivering healthcare in Canada and while provincial jurisdiction may appear odd, it was not of major concern when the Fathers of Confederation ratified the British North America Act in 1867. Following several years of debate, however, the Judicial Committee of the Privy Council declared the provinces responsible for administering and provisioning healthcare. The federal government is responsible for public health, in addition to providing healthcare to certain groups, including First Nations, Inuit, military personnel, and federal inmates. It does provide funding to the provinces via the Canada Health Transfer, which is supposed to assist them with costs and ensure some degree of equivalency between provincial healthcare systems.

Former Saskatchewan Premier Tommy Douglas, widely recognized to be the “Father of Medicare,” fought ardently for the implementation of a publicly funded healthcare system. In 1962, one year after his departure from provincial politics, Saskatchewan began providing public healthcare and, shortly thereafter, so too did Alberta. Former Prime Minister John Diefenbaker, in 1958, announced the federal government would fund 50 per cent of provincial healthcare, and eight years later, then Prime Minister Lester B. Pearson ratified this motion.

As a result, Ottawa’s role in healthcare funding is controversial and has been a major policy issue in Canada. Indeed, without federal funding, there would be significant disparities among the provinces in terms of quality, yet, despite these concerns, healthcare innovation is provincial jurisdiction.

The debate over federal funding remerged following the expiration of the Canada Health Accord, established in 2004 under Paul Martin’s tenure as Prime Minister of Canada. It guaranteed six per cent annual increases in funding for healthcare and was supposed to help with deficiencies, such as high wait times. Stephen Harper’s government recently committed to a six per cent increase until 2017, after which the government will fund based on inflation-adjusted economic growth (although the level of funding will not fall below 3 per cent). This development has prompted critics to demand the government return to guaranteeing the six per cent increase, arguing that underfunding issues could worsen the system, and more worrying, allow new issues to emerge.

However, despite funding increases, very little has changed in terms of quality. Kelly McParland of the National Post, for instance, notes the lack of progress in reducing wait times. Moreover, citing the Health Council, he noted that homecare services for seniors are inadequate, primary care is insufficient, and prescription drugs are unaffordable. For example, as reported by the National Post, the federal government has given $41 billion in extra healthcare funding since 2004, yet in 2010 Canada ranked last of 11 countries in wait times.

McParland is not the sole critic. Indeed, there are several reports revealing the shortcomings of Canada’s healthcare system given the amount of money spent on it. Funding, therefore, is not necessarily the issue. There needs to be real reform of the Canadian healthcare system: Ottawa should retain its role, however, the provinces must consider new healthcare models as a means of strengthening their programs. Perhaps the first step ought to be reforming the Canada Health Act to be less restrictive in terms of delivery requirements. The Act requires that healthcare be publicly administered, greatly restricting any partnership with private entities. France, on the other hand, embraces a two-tier system, which typically performs highly in comparison to healthcare systems administered by other rich, democratic countries, in terms of both cost and outcome.

Randy Kaye 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

Community Mailboxes, Fiscal Balance, and Canada Post

In 2014, Canada Post will begin implementing changes to its mail operations in urban neighborhoods. The crown corporation announced this past December that it developed a five-point plan to economize and improve postal services across the country. Canada Post will implement these changes gradually in order to stabilize its financial position by 2019, despite warnings that they will only worsen its decline. The full effect of Canada Post’s proposed changes, however, remains unknown and there is still an opportunity for success.

Canada Post published its five-point plan on 11 December 2013 on its website:

1) Community Mailboxes

Beginning in 2014, the proportion of Canada’s population that receives door-to-door mail delivery will have their mail delivered to community mailboxes: “This change will provide significant savings to Canada Post and will have no impact on the two-thirds of Canadian households that already receive their mail and parcels through community mailboxes, grouped or lobby mailboxes, or rural mailboxes. The transition is expected to take 5 years to complete on a national scale.” Despite complaints about this transition, Canada Post already services rural Canadians using community mailboxes and it appears as though the model is successful.

2) Stamp Price Increases

The price of stamps will increase revenues and incentivize bulk purchasing, resulting in a larger price increase for those who purchase stamps individually. Canada Post’s price for first-class mail delivery will increase from $0.63 to $1: “Under these changes, the majority of Canadians, because they buy stamps in booklets or coils, will pay $0.85 per stamp. The minority of consumers who purchase stamps one at a time will pay $1 per stamp.” It is important, however, to view this price increase as necessary for achieving fiscal balance.

3) Expanding the Postal Franchise

Canada Post plans to open franchises in additional retail locations across the country: “This will allow busy Canadians to do more shopping in one place. Canada Post will also continue to align its corporate post offices to customer traffic patterns.” In 2008, there were over 90 Canada Post outlets opened in Shopper Drug Marts across the country. These outlets provide convenience to consumers and adding new outlets into various retail locations should increase this accessibility.

4) Streamlining Operations

Due to technological advances, Canada Post will reform its internal operations to facilitate more efficient mail service delivery. Canada Post plans will serve customers better through a more elaborate and effective method of parcel tracking and central processing. The changes include quicker mail sorting equipment, consolidating operations, and using fuel-efficient vehicles: “Improved operations will yield cost-effective and more reliable delivery to Canadians, along with better parcel tracking capabilities.” To retain customer loyalty, Canada Post’s operations must reflect current realities and these changes demonstrate its willingness to tailor their operations to new demands.

5) Labour Costs

The most controversial initiative is Canada Post’s plan to cut its workforce and renegotiate the company’s employee pension plan. There are agreements between Ottawa and Canada Post that safeguard the pensions of current employers, however, future employee pension plans are at risk. Because these changes require less labour, Canada Post is hoping to reduce unemployment through attrition, as opposed to layoffs (which reduces the risk of involuntary and unexpected unemployment).

Technological innovation is primarily responsible for declining demand of mail services delivered traditionally by couriers, such as Canada Post. For example, online banking is a cheaper alternative to paper billing and email services are more efficient than first-class mail deliver. Parcel delivery, however, is expanding due to the popularity of online shopping. These shifts and their economic consequences have compelled Canada Post to seek a new direction in order to avoid an estimated $1 billion in financial losses.

The reality, of course, is that measures to increase efficiency can reduce short-term employment. It is arguable that competent service-delivery justifies this result. Trimming Canada Post also lessens the burden placed on Canadian taxpayers. These changes are necessary in order for Canada Post to operate both competitively and competently. The five-point plan demonstrates at least some willingness to adapt to current realities with as little disruption as possible. Institutions must acclimatize to customer preferences and Canada Post is gearing to improve their services in a practical, convenient manner.

Rachel Lowe 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