Housing is something that we expect a rich country like Canada can provide to its citizens. Most Canadians (about 95 per cent) have housing. Admittedly, some have homes that aren’t all that great. The vast majority, however, are relatively happy with their housing situation.
Most housing needs are funded privately through the employment benefits and earnings of Canadians. Sadly, though, a very small percentage of Canadians have no access to housing. The federal government has a solution: it will spend billions to provide housing to everyone. Not just those who need it — it will force all to get government housing going forward. Backyards, bigger kitchens, extra bathrooms, finished basements — those are luxuries which will have to be sacrificed in the government procurement process. We all need to have housing that is roughly comparable. This will save money. The bulk purchasing power of the government will bring the cost of houses down. Sure, taxes will likely have to increase. But don’t worry — businesses and individuals will save billions in the end. We can’t afford not to.
The above sounds ridiculous, of course. But that’s exactly what’s being proposed for medication in the report just released by Dr. Eric Hoskins and his Advisory Council on the Implementation of National Pharmacare.
Let’s get one thing out of the way: I support each and every Canadian having access to the medicine they require. I’ve done some work for the pharmacists of this country. They are powerful advocates for patients. The advisory council got one thing dead right: Canadians shouldn’t have to cut spending on food or heat to be able to afford their medicine. We are a rich, compassionate country. We should be able to solve this.
But to blow up a system that is mostly working, take on billions in new spending when there are so many other health priorities? C’mon.
Consumers who have coverage are mostly happy
If you were starting from scratch in a new country with a blank slate, the council report might be a good roadmap. But we’re not starting from scratch. We have a system. It mostly works. Consumers who have coverage are mostly happy. Those who fall through the cracks need help. And we should give it to them.
The main reasons to dismiss the big-ticket recommendations in this report are straightforward.
First: opportunity cost. The cost of National Pharmacare is extremely high. It’s debilitating — $15 billion a year. The cost of doing something more targeted to insure those who don’t have coverage is more modest: about $2-3 billion.
Do this exercise in your head. You’re the minister of health. You’re given $15 in loonies and five buckets in front of you labelled “national pharmacare,” “mental-health support,” “home and long-term care for seniors,” “low-income dental care” and “surgery wait times.”
Is there any world in which you would dump all 15 loonies in the pharmacare bucket? This is what Hoskins has proposed.
Second, the provincial side of this is a mess. They all have interests and different plans, and that’s excluding a discussion about Quebec. And if we’re so interested in a national purchasing strategy, leveraging federal buying power to lower costs, there is very little stopping us right now. Just do it if you want to.
But let’s take a closer look at that math. Canadians are told “costs will be cheaper from bulk buying.” Hoskins pegs those savings at $2.8 billion a year. That’s the best-case scenario. So taxpayers take on an extra $15 billion in a $50-billion system, save corporate Canada $16 billion, all for a savings of less than $3 billion? And taxes have to go up, and we don’t get to fix our broken health system or fund new mental-health supports or dental care? Doesn’t sound like a great deal after all.
Doesn’t sound like a great deal after all
I didn’t even go into some of the biggest flaws in this proposal — we don’t have the money, there is a huge industry providing these services that will lose jobs, and coverage for specialized drugs for rare diseases will be decimated. I have some confidence the Trudeau government will see that it can meet its objectives (political and policy) with a more modest approach. (Oh, by the way, the Parliamentary Budget Officer says that clean water on Indigenous reserves will cost about $3 billion in capital costs. Governing is about priorities.)
One more thought experiment: imagine a conservative politician (say Andrew Scheer) coming to Canadians with this pitch: “Corporate Canada is spending too much on health benefits for its employees. It’s hurting our competitiveness. We need to do something and here’s my proposal: we take the costs off business for these necessary health services and increase taxes to pay for it. Jobs are too important.”
He would be laughed out of the place. And rightfully so. As a small business owner, the Hoskins report might be good for me. As a Canadian? No way.
— Jason Lietaer is president of national communications firm Enterprise Canada.