Provinces Should be Freer to Experiment in Health Care

November 22nd, 2010 by Maxime Bernier | No Comments

The federal government today intervenes massively in provincial jurisdictions, and in particular in health and education, two areas where it has no constitutional legitimacy whatsoever.

This is not what the Fathers of Confederation had intended. The objective of the 1867 Act was not to subordinate provincial governments to a central authority. But rather to have sovereign provinces within the limits of their powers, dealing with local matters that directly affected citizens; and a sovereign federal government within the limits of its own powers, dealing with matters of general national interest.

During the 20th century however, this fundamental principle was gradually pushed to the wayside. We saw everywhere the growth of the state, the rise of central planning, of command-and-control Keynesianism and of government interventionism.

In Canada, government activism grew both in Ottawa and in the provincial capitals. Predictably, federal planners decided that Ottawa had to have its say on all kinds of social issues, despite the fact that these matters were the responsibility of the provinces in our Constitution.

At first, it was done in the proper manner – by amending the Constitution. This is why after the Privy Council ruling in 1937 which said that Ottawa had no authority to establish an unemployment insurance program, the BNA Act was amended to allow it. In 1951, old age pensions were established in the same way.

However, several other programs, from family allowances to grants to universities and hospital insurance were set up which clearly did not respect the constitutional division of powers. Some of these programs are direct transfers to individuals and tax measures. While others, such as the health and social transfer programs, are money sent by Ottawa to the provinces, to the tune of nearly 40 billion dollars today.

This intrusion into provincial jurisdiction was accomplished by the so-called federal spending power. No constitutional provision to legitimize this federal spending power was ever adopted. The Supreme Court of Canada has never explicitly recognized this power either.

I believe we should bring back the balanced federalism envisioned by the Founders.

This would be done by putting an end to all federal intrusion into areas of provincial jurisdiction. Instead of sending money to the provinces, Ottawa would cut its taxes and let them use the fiscal room that has been vacated. Such a transfer of tax points to the provinces would allow them to fully assume their responsibilities, without federal control.

Since the Séguin Commission, set up a decade ago by the Quebec government, the debate has focused mainly on the fiscal imbalance, the discrepancy between the fiscal resources of the federal government and the growing financial responsibilities of the provinces. This problem was solved in large part by our government when we increased the social and health transfers to provinces in our 2007 budget. But this has not solved the legislative imbalance, which is the heart of the matter.

As we saw last summer during the premiers’ meeting in Winnipeg, the provinces have already started to pressure Ottawa to increase health transfers when the ten-year health agreement expires in 2014. If transfers do not increase as fast as provinces want them to, you can be sure that the debate over the fiscal imbalance will be back in the news three years from now.

This is a recipe for permanent discord. The provinces act like special interest groups who would rather get money from the central government than increase their own taxes. But at the end of the day, the money comes from the pocket of the same taxpayer.

It also guarantees confusion and a lack of accountability. Despite the existence of the Canada Health Act, it is provincial governments that are mainly responsible for managing the health care system. But the debate over federal funding makes it difficult for the average citizen to see who is responsible for what.

Why do we have waiting lines for surgery, overcrowded emergency rooms and not enough family doctors? Is it because of bad provincial management or because of insufficient federal funding? Each level of government can blame the other to score political points.

There would no longer be any ambiguity if each province stopped depending on federal transfers and raised the amount of money necessary to manage its own programs.

A one-size-fits-all solution imposed on everyone from the centre precludes experimentation, kills innovation and makes it awfully difficult to extricate oneself from failed policies.

On the contrary, the genius of federalism is that we can try more than one type of solution to solve public policy problems. Freed from federal conditions and unable to shift the blame to another government, provinces would be more inclined to experiment. Especially in finding better ways to deliver health care services.

Maxime Bernier is the MP for Beauce.


Comments on to 'Provinces Should be Freer to Experiment in Health Care'