Ottawa should leave health care to the provinces

The federal government spends 50 per cent more on health care than it did 10 years ago. Do you have easier access to a doctor? Is your emergency room wait shorter? Yet the provinces always want more federal funds, whereas Ottawa wants to limit the growth of its contribution while also deciding how a part of the money will be spent.

British Columbia has just signed a health care deal with the federal government, with the province’s Health Minister Terry Lake saying, “I would be lying if we didn’t say we were hoping for more.” This leaves four provinces—Quebec, Ontario, Manitoba, and Alberta—still engaged in a wrestling match with the federal government. There are billions of dollars at play, but Ottawa’s insistence on targeting mental health and home care is seen as interference.

On this question of provincial autonomy, the holdouts are right to hope for more. Health care is an area of provincial jurisdiction. Each province created its own health insurance system, and each manages its own system and adopts the laws that govern it. From an economic perspective, federal intervention poses a problem.

Decentralization and innovation

As a general rule, the responsibility for a public action should be entrusted to the authority that is closest to those concerned. In political theory, this is called the principle of subsidiarity. Applied to a federal framework, it means that Ottawa should only take care of political, social, and economic problems that cannot be dealt with by the provinces. The currency and national defence cannot be administered locally, but health care can, which is why it’s a provincial responsibility. Ottawa should simply stay out of it.

A corollary of this principle is the financing of services by the authority that dispenses them. In other words, since the provinces are responsible for their health insurance plans, they alone should be responsible for collecting the taxes that finance the services associated with them. If this were the case, the current unproductive tug-of-war would not be taking place, and our provincial politicians could devote their energy to very concrete ways of improving the performance of our health care system.

More decentralized health care decisions would increase the opportunities for experiments and discoveries of the best ways of delivering services. A certain amount of competition would be encouraged between the provinces, which would allow for comparisons of results and favour the sharing of best practices. One province could decide to incorporate more home care, another could boost mental health services, and a third could choose other priorities based on its needs, its demographics, and the wishes of its population.

The important thing is to be able to compare the results obtained. Hospital performance indicators would certainly be welcome, so that the most and least efficient systems would be known, and we could draw inspiration from the former.

Finally, when there is a direct link between taxation and services, decision-makers are led to a certain moderation, and encouraged to make sure that the population gets its money’s worth. The more the federal government contributes, the weaker this link between the provinces and patients becomes. This is no way to arrive at the best decisions.

Federal Health Minister Jane Philpott was calling recently for a “transformation” of the health care system, noting that it was important “to do better, to make sure we get better value for money.” Well said.

The first thing the federal government should do to achieve this objective is withdraw from the health sector and free up the fiscal space that it occupies on this issue, making room for the provinces. Each of these could then decide for itself the best ways to provide health care services to its population, which will be better served. And they would no longer be able to blame Ottawa for their failures, which is probably the best way to ensure change!

Germain Belzile is a Senior Associate Researcher at the MEI, Jasmin Guénette is Vice President of the MEI. They are the co-authors of "Why Ottawa Should Respect Provincial Jurisdiction over Health Care" and the views reflected in this op-ed are their own.

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