Healthcare: The Canadian Fiscal Crisis that America Would Love to Have

By Keith Edmund White

Editor-in-Chief

Canada's provinces are beginning to rein in healthcare spending, which means they are putting the breaks on near-double digit percent annual increases.  Sure, this is the beginning of a decade-delayed 'new reality' regarding raising healthcare spending.  But, as Keith White reports, if Canadian spending on healthcare constitutes a crisis, it's a crisis the United States would love to catch.

Jeffrey Simpson at The Globe & Mail highlights a big shift in how provinces are dealing with healthcare spending, and the possibility that provinces may need to start coming to gripes with containing healthcare spending.

After a decade allowing healthcare budgets to increase, all provinces, save one (i.e. Quebec), are holding back on healthcare spending.  Why?   Budgets are shrinking; healthcare costs are raising; and, after years of avoidance, provincial debts have to be reckoned with.

But the lurking sense of 'doom and gloom' in Simpson's article could easily bemuse an American observer.

Snap Shot: Canada Healthcare Costs; International Healthcare Costs

Canada's healthcare is anything but free; but, the cost of Canada's public healthcare system is still considerably lower, on a per capita basis, than the cost of healthcare spending in the United States.

The Fraser Institute last month released The Price of Public Health Care Insurance.  The short report estimates 2012 Canadian health spending and then breaks that spending down by different family types.  The report also shows the steep increase in Canadian healthcare spending witnessed between 2002 and the reports estimated 2012 figure.

Per Capita Cost.  The report also estimates that the 2012 per capita cost, or "the cost of the public health care insurance plan if every Canadian resident paid an equal share," of healthcare at approximately $3,779 CAD per Canadian (or roughly $3,859.00 USA).

Per Capita Country Comparison.  For a sense of how that compares to other nations' healthcare spending, check out this National Geographic (NG) graph using 2007 data.  Note:  This  chart pegs Canadian per capita spending at $3,895 USA.  I suspect the higher 2007 figure is more a reflection of the two countries considerable difference in exchange rates between 2007 and 2012.  This cross-graph comparison quirk notwithstanding, the NG graph still gives a sense of the difference between U.S. and Canadian spending on healthcare.

Morning News Round-Up

A roundup of attention-grabbing Canada-focused headlines:

Want to Solve America's Problems?  Vote Canada.  The BBC reports on a Canadian comedy team’s new book,  America But Better:  The Canada Party Manifesto.

B.C. Premier Steps In It, And Enjoys a Session-Free Fall.  B.C. Premier Christy Clark says Victoria is steeped in a “sick culture” with “no real people.”  Predictably, she’s grabbing headlines—especially since the Premier is not having a fall sitting of B.C.’s parliament, and there's that provincial election next May.

Understanding Canada’s Opposition Leader Thomas Mulcair.  John Geddes offers a lengthy and fascinating portrait of NDP leader Thomas Mulcair raise to power and worldview in Macleans.  Here’s a particularly relevant snippet:

By his own account in an interview with Maclean's, backed up by the observations of some who have worked closely with him, Mulcair’s upbringing in such a large, tightly knit, complex household remains the template for his important relationships. Aides and allies say he maintains unusually close contact with family and old friends, cultivating an intensely personal network and leaning on time-tested loyalties more than most top politicians. While he is no longer an observant churchgoer, Mulcair’s brand of left-leaning politics flows directly out of his home province’s distinctive and deep well of progressive Catholicism—a powerful influence on seminal Quebec politicians of the past, including Pierre Trudeau. As for Mulcair’s Irishness, Graham Carpenter, an old family friend and long-time aide, alludes to his “Irish world view,” and not jokingly, as an explanation for Mulcair’s storied scrappiness and more. “There’s mystique to it,” Carpenter says, “that’s for sure.”

Canada’s Health System and Graying Population.  The Ottawa Citizen explores why the graying of Canada’s population hasn’t derailed the healthcare system of the Champlain district.

Rock the Canadian Rockies this Summer.  The Calgary Herald reports on Banff National Park’s preparations for its annual foliage tourist rush.

PQ Officially Take the Reins of Government in Quebec. Yesterday was the first day of Parti Quebecois (PQ) government in Quebec.  CTVNews reports on the PQ cabinet’s photo-op, and explores just who is holding the reins of Quebec government.  Of particular focus:  Alexandre Cloutier’s appointment to the newly created minister for sovereigntist government. 

U.S. Solider Avoiding Iraq War Service in Canada is Ordered Out By Day’s End.  Kimberly Rivera, a war resister who’s been in Canada since 2007, is told to leave Canada because she won’t face “punishment, torture, or loss of life if deported.”  (Source:  iPolitics)

Gamer-Free Vancouver?  Canadian Business reports on why the Vancouver’s video-game industry is moving east.  Why?  Two drivers:  Ontario’s lower cost of living and tax incentives. 

Week's End News Round-Up

Canada's Dutch Disease:  Fact or Fiction?  Today Bank of Canada Governor Mark Carney defends Canada's growing economic reliance on energy, increasing commodity prices be damned.  If you want to see his take on the energy sector vs. manufacturing sector debate, check out Maclean's Stephen Gordon's "annotation" to Gordon's speech--you'll feel like your an economist for a day!  And you'll see evidence that Canada and America's trading relationship may be changing in the coming decade:

So what treatment does [Carney] suggest? A good summary of his recommendations is “eat your vegetables.” Firstly, Canadians should get past the notion that the path to prosperity lies in being the low-cost exporter of manufactured goods to the United States... 

Carney's answer:  Dutch disease worries are a "caricature" which would limit the positive growth of Alberta's oil sands.  Naturally, the Organization for Economic Co-operation and Development (OECD) disagrees.

Reforming Canada's Healthcare.  The Hill Times' opinion page offers a strong argument to allow a mixed-healthcare system in Canada (i.e. allow Canadians to pay for private care).  Some interesting parts from the piece: 

If all of this bureaucratese sounds familiar, you’re right. This is the 19th major examination of the Canadian health-care system in the past 15 years. Yet, once again, the “nail” each study has continued to hammer is stuck in the paradigm that Canada’s health-care system must remain a government run monopoly.

That paradigm was starkly enunciated by Health Council of Canada member and former Vancouver General Hospital president Charles Wright who stated: “Administrators maintain waiting lists the way airlines overbook. As for urgent cases, the public system will decide when their pain requires care. The individual cannot decide rationally.”

...

If so, they should take heed of a recent Ipsos Reid survey that shows 76 per cent of Canadians support a “mixed model” of health care giving them the option of spending their own money for private care.

Job Growth Pushes The Canadian Dollar Up Against the Dollar.  Canada added 30K+ jobs last month, pushing up the Canadian dollar.  But Canada's 7.3% unemployment rate hasn't changed; though, British Columbia's unemployment has gone down.  America's job-outlook:  not so great.  

The Mega-Rich America's New Successionists?  Mike Lofgren, a longtime U.S. Congressional budget committee Republican staffer, writes in The American Conservative:

If a morally acceptable American conservatism is ever to extricate itself from a pseudo-scientific inverted Marxist economic theory, it must grasp that order, tradition, and and stability are not coterminous with an uncritical worship of the Almightly Dollar, nor with obesisance to the demands of the wealthy.  Conservatives need to think about the world they want:  do they really desire a social Darwinist dystopia?

...

Now, almost two decades later, the super-rich have achieved escape velocity from the gravitational pull of the very society they rule over. They have seceded from America.

Agree or not, Lofgren's new book, The Party Is Over:  How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted is worth checking out, as is the rest of his article Revolt of the Rich.

Canada Gets Out of Iran.   Canada today severed diplomatic ties with Iran, closing up their embassy and giving Iranian diplomats 5 days to get out.

Ontario Gets a Minority Liberal Government (Again).  After two by-elections in Ontario, the Conservatives lost a seat they held for 22 years, and the NDP won a seat the Liberals held since 2001.  The result?  The Liberals fell one-seat short (again) of a majority government.  As for the Conservatives' shutout, Progressive Conservative Ontario leader Tim Hudak is keeping his job.  Interesting note:  the byelection was engineered by the Liberals to win a majority.