The Public Health Care Monopoly on Trial: The Legal Challenges Aiming to Change Canada’s Health Care Policies

Canadian patients still have very few options when it comes to health care services. The provision of care that is considered medically required remains largely monopolized by the public sector in each province. The role of private health insurance is limited solely to the coverage of services not insured by the public system. This Research Paper examines the legal challenges aiming to change Canada’s health care policies.

Media release: Will Canadian courts put an end to the public health care monopoly?

Viewpoint – The Chaoulli Decision and Health Care Reform: A Missed Opportunity? (June 4, 2015)

Links of interest

La santé au Canada: Chaoulli, prise 2? (Huffington Post Québec, November 28, 2015)   Interview with Yanick Labrie (CFCF-TV, CTV News Montreal, November 24, 2015)

The Public Health Care Monopoly on Trial: The Legal Challenges Aiming to Change Canada’s Health Care Policies


Chapter 1 – A History of the Chaoulli Ruling and Other Challenges to Canada’s Health Insurance Laws

  • In June 2005, the Supreme Court of Canada ruled, as part of its Chaoulli decision, that when the government is unable to provide access to required care within a reasonable timeframe, the prohibition on taking out private health insurance constitutes a violation of patients’ rights under Quebec’s Charter of Human Rights and Freedoms.
  • Since it was rendered, this decision has been cited more than 174 times in various cases before Canadian courts. Only two cases, however, have the same goals as Dr. Chaoulli’s case at the time, namely an end to the public monopoly in the funding of care regarded as medically required, with one case in Alberta and the other one in British Columbia.
  • In December 2011, two Alberta patients who had had to spend tens of thousands of dollars for surgery in the United States initiated legal challenges before the Alberta Court of Queen’s Bench with the aim of lifting the prohibition on the province’s patients taking out duplicate private insurance.
  • In June 2016, one of the most keenly anticipated legal proceedings concerning the public health care monopoly since the Chaoulli case is set to begin before the Supreme Court of British Columbia. The case involves Dr. Brian Day, a former president of the Canadian Medical Association and co-owner of the Cambie Surgery Centre, a private clinic and the largest establishment of its type in British Columbia.
  • At the heart of the challenge before the Supreme Court of British Columbia are provisions in the law prohibiting not only duplicate health insurance but also mixed medical practice and the freedom of doctors to determine their own fees.

Chapter 2 – Ten Years after the Chaoulli Decision: How Has the Quebec Health Care System Changed?

  • In principle, the legislative changes that followed the Chaoulli decision authorized Quebecers to purchase duplicate private insurance for a limited number of medical and surgical treatments, such as hip and knee replacements and cataract removals. In practice, however, no actual market for this kind of insurance developed, the number of admissible surgeries being too low for new and interesting insurance products for individuals and employers to appear. The maintenance of the prohibition on mixed medical practice also hampered the emergence of such an insurance market.
  • The law also authorized public hospitals to sign partnership agreements with private surgery clinics for the transfer of a certain volume of surgeries and treatments. Three agreements of this type signed in recent years led to significantly improved access in the public hospitals concerned.
  • The number of specialized medical centres (SMCs) remains relatively small in Quebec’s hospital landscape. In March 2015, there were 44 SMCs in Quebec, most of which specialize in plastic and cosmetic surgery. This represents a substantial drop compared to March 2012, when there were 61 of them.
  • Wait times for elective surgeries have not improved since 2007-2008. They have gone down slightly for cataract removals (-16%), but have increased for hip (+22%) and knee (+10%) operations.
  • Of all the provinces, it is in Quebec that we find the lowest numbers of hip and knee replacements as a proportion of the adult population. These surgery rates are only about half those found in Saskatchewan, which has significantly reduced its wait times since 2010 by increased reliance on private surgery clinics.
  • The current capacity to treat patients in the public system is rationed by the government and does not stem from a shortage of caregivers. Since 2005, the number of specialists has even grown three times faster than the Quebec population, an unprecedented increase.
  • Many doctors cannot secure the operating time they want and find themselves unable to reduce their waiting lists despite their best efforts. Operating rooms remain significantly underutilized in nearly all of Quebec’s administrative regions.

Chapter 3 – Dr. Day’s Challenge in British Columbia: Is the Universal Health Care System Really in Danger?

  • The difficulty of accessing health care, which keeps worsening in British Columbia, has prompted a group of clinics and patients to go before the courts to contest the legitimacy of the government’s monopoly over the provision and financing of health care.
  • The four sections of the Medicare Protection Act that the plaintiffs are challenging deal with the prohibition on purchasing duplicate private insurance, the prohibition on mixed medical practice, and the prohibition on doctors coming to a mutual arrangement with their patients regarding certain fees. Canada’s health care system is an anomaly compared to the systems of the other industrialized countries when it comes to these restrictions.
  • If the plaintiffs should win their case, the Canadian system would not thereby come to resemble the American model, but rather the most efficient mixed universal systems in the world, in particular those found in Europe.
  • International experience over the past ten years confirms that greater reliance on the private sector, both in terms of funding and in terms of care provision, leads to net improvements when it comes to wait times, without compromising the principle of universality.
  • The health economics literature shows that unequal access to care exists to varying degrees in all countries. There is no indication, though, that the presence of a duplicate private insurance market leads to less equitable access to medical services.
  • In Canada, a large body of empirical research shows that access to care varies with socio-economic status, despite the prohibition of duplicate private health insurance and other restrictions.


Canadian patients still have very few options when it comes to health care services. The provision of care that is considered medically required remains largely monopolized by the public sector in each province. The role of private health insurance is limited solely to the coverage of services not insured by the public system.

No other industrialized country imposes so many restrictions on its citizens in the field of health care. By observing foreign experiences, it becomes obvious that these restrictions do not give rise to better results in terms of access to care and quality services—quite the contrary. Canada still trails most countries in international rankings when it comes to waiting times for medically required care.(1)

According to certain analysts, Canadians can at least take comfort by telling themselves that they don’t have a “two-tiered” health care system. But equal access to care in the current monopolistic system is a myth. A large number of empirical studies show that access to care varies with socioeconomic status in Canada, despite the numerous restrictions.

This is hardly surprising. In the presence of rationed access and waiting lists, it is to be expected that some will use their connections and other stratagems to gain access to the services they need before other people. More and more doctors recognize this. In a poll of Canadian doctors conducted in the spring of 2015, 63% of respondents admitted that wealthier people have easier access to better health care in this country.(2)

Public insurance organizations that are exempt from the Canada Health Act, like those covering workplace or highway accident victims, are for their part able to call on private health clinics to treat the people they insure in every province. To keep the benefits they pay out from growing too large while the insured await their operations, these organizations consider it crucial that patients be treated and returned to work as quickly as possible. In Quebec, for example, over three quarters of the CSST’s spending on medical care and rehabilitation goes to private clinics.

But if the private sector is beneficial for these public organizations, why would it be any different for ordinary citizens? Should Canadians be allowed to purchase, with their own money, private insurance covering spending on medically required care, instead of having to content themselves solely with the public health insurance provided by their government and languish on waiting lists?

A decade ago, the Supreme Court of Canada looked into these questions. In June 2005, in a now-famous ruling, the highest court in the land declared that the prohibition against purchasing private insurance for medical services insured by the public system is a violation of the right to life and security of patients and runs counter to the Quebec Charter of Human Rights and Freedoms.

In the coming months, Canadian courts will once again have to delve into the same questions that were at the heart of the litigation that led to the Chaoulli decision. In one of these cases, which will be heard in British Columbia, the plaintiffs, led by Dr. Brian Day, not only want it to be legal for patients to purchase private insurance covering medically required care; they also want the prohibitions against mixed medical practice and the free determination of doctors’ fees to be lifted.

This Research Paper examines the legal challenges aiming to change Canada’s health care policies. The first chapter provides an overview of the history surrounding the Chaoulli decision rendered ten years ago and the other challenges to the public health care monopoly. The following chapter evaluates patients’ access to care in Quebec since the reforms undertaken in the wake of the Chaoulli ruling. Finally, this Paper concludes by taking four ideas often heard in the debate on the participation of the private sector in health care and putting them to the test.

This Research Paper was prepared by Yanick Labrie, Economist at the Montreal Economic Institute.

1. See among others Canadian Institute for Health Information, How Canada Compares: Results from the Commonwealth Fund 2014 International Health Policy Survey of Older Adults, January 2015.
2. Tristan Bronca, “Why physicians are fed up with Medicare,” Medical Post, September 29, 2015, pp. 20-21.

Read the Research Paper on iedm.org

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