Category: Politics

Premiers’ meeting was a fight about federalism, not funding

Source: YT: Council of the Federation-Conseil de la fédération

The Premiers’ meeting in Halifax looked like a fight about money and control. It was actually an attempt to save federalism in Canada.

The latest premiers’ meeting looked different. Instead of begging for handouts, they talked (briefly) about refusing federal handouts. Does this signal real change?

Note: this piece was published with True North.

Premiers expressed intense frustration last week over the lack of federal support and partnership on healthcare. The premiers’ Council of the Federation met for three days in Halifax, and as usual, healthcare topped their list of priorities.

The frustration falls only four months after Quebec signed its own side-deal with the federal government – the last province to settle details from last year’s $196.1 billion healthcare-funding agreement.

Since the Council formed in 2003, meetings have centred on money and control. Provinces want more federal money and less federal control. The federal government wants more control, while continuing to pay the provinces as little as possible.

This year, discussions seem to have gone beyond funding to address the deeper causes of frustration.

Alberta Premier Danielle Smith called attention to provinces rejecting federal funding aimed at boutique programming. Smith said provinces end up funding the “lion’s share” of operational costs.

Historically, the provinces have grumbled at federal funding offers – bribes designed to build programs the provinces could not afford to build on their own. Grumbling aside, provinces usually accept federal cash and do so willingly, with one notable exception. The final pillar of medicare, the Medical Care Act (1966), came with an offer to fund 50 per cent of medical services funded by a new federal ‘social development’ tax. Taxes would increase whether or not provinces accepted the new funding. Ontario Premier John Robarts called it, “The greatest machiavellian fraud ever perpetrated on the people of Canada.”

The current group of Premiers have taken a different tack. They reject federal bribery cloaked in the constitutionally questionable use of federal spending power. The provinces can neuter federal power, if they stick together. The federal government knows this, which might explain the use of “side deals” in the 2023 federal-provincial funding agreement mentioned above.

In fairness, not all funding is bribery. It hinges on how it is structured.

Premier Tim Houston, Chair of the Council, sent a letter to Justin Trudeau on behalf of the premiers. In it, he calls for “true partnership to revitalize cooperative federalism in Canada.”

True partnership, according to Peter Block, organization development expert, includes four things:  an exchange of purpose, the right to say no, joint accountability, and absolute honesty. This means provincial and federal leaders should meet and build a shared purpose, before planning any new program. Each party should have the right to stop plans at any time.  Joint accountability would mean neither federal nor provincial governments could blame the other for poor performance. And neither side would conceal information about resources or true intentions.

True partnership captures the essence of what federalism was meant to be in Canada. Federalism was never a rigid protocol to delineate absolute rights between one level of government and another. Canadian federalism offers a place to start negotiating. It sets the table and gives everyone a voice.

Federalism is meant to be the basis of our ability to work together as a unified nation, not as a power play to force governments to do what they never wanted to otherwise.

Yuval Levin, Director of AEI, makes this same point about the American Constitution in his new book, American Covenant: How the constitution unified our nation – and could again. Negotiation frustrates political idealists. The constitution exists to facilitate peace and cooperation given a plurality of interests. Though different than American republicanism, Canadian federalism serves the same purpose – peace and compromise, not power and force exerted by one government on another.

The Premiers’ call for “true partnership to revitalize cooperative federalism in Canada” will require compromise by all. We cannot tolerate one level of government wielding anything against the other, be it ‘spending power’ or power of any other kind. Governments must embrace true partnership, or Canadian federalism becomes a charade.

The premiers have taken the high ground and asked for change. Will Justin Trudeau listen?

Politics trumps patient care when governments are failing

Patients on gurneys line the hallway due to an over-capacity at the Humber River Hospital emergency department in Toronto on Jan. 25, 2022 during the COVID-19 pandemic. PHOTO BY NATHAN DENETTE / THE CANADIAN PRESS
Much of medicare’s dysfunction comes from compromises made to win votes in moments of political weakness

A few weeks ago, I was chatting with a popular talk-radio host about the 177-to-2 vote on the Medicare Care Act, 1966. He said, “Who were the two who voted against it?”

This sparked a short trip into parliamentary records to uncover events around the “unanimous” and “near-unanimous” votes that gave us medicare.

As always, the details reveal a different story. The article is on the National Post site.

Enjoy!

Politics trumps patient care when governments are failing

Policies that are not necessarily the best for the long term, including those affecting health care, are often implemented by weak governments only concerned about votes, writes Shawn Whatley. (from the photo caption)

Medicare emerged during failing and minority governments, much like the time we find ourselves in now. Three pillars of medicare legislation passed with near unanimous support during periods when the opposition could not risk debate.

The first pillar of medicare, the Hospital Insurance and Diagnostic Services Act (HIDSA), passed unanimously in 1957. The majority Liberals had been in power since 1935. HIDSA introduced dollar-for-dollar cost sharing between the federal government and the provinces. The Diefenbaker Progressive Conservatives offered unanimous support, and months later won an upset minority. In 1958, Diefenbaker won again — the largest majority in Canadian history, up to that point.

By 1963, voter sentiment had reversed, and voters had tired of Diefenbaker. The minority Liberals tabled the Medical Care Act. The MCA promised to expand Parliament’s 50:50 funding to include doctors’ services. Provinces needed to nationalize medical insurance and create publicly-funded, single-payer provincial insurance plans to qualify for federal funds. Parliament passed the Medical Care Act in 1966 by a vote of 177 to two. The two “nays” came from Social Credit MPs: Robert N. Thompson, from Alberta, and Howard Earl Johnston, British Columbia. The Liberals, Progressive Conservatives and NDP offered unanimous support. Pierre Elliott Trudeau won a majority in June 1968, and the MCA took effect weeks later on July 1.

The last pillar of medicare, the Canada Health Act, came when Pierre Trudeau faced historically low voter support, much like his son does now. The Canada Health Act, 1984, leveraged public fury over hospital user fees and physician “extra billing,” even though extra billing accounted for only 1.3 per cent of total physician billings under medicare. An amendment to the MCA could have fixed the issue, but new legislation presented a perfect wedge.

Mulroney saw through the trick. He ignored the bait and whipped the vote. The CHA passed unanimously, and the PCs went on to redefine “landslide election” victory that fall. It remains the largest majority government in Canadian history.

Much of medicare’s permanent dysfunction comes from compromises politicians made to win votes in moments of political weakness. Medicare escaped meaningful debate.

Remember, the Diefenbaker PCs supported social programs and even appointed the first Hall Commission on universal medical insurance, 1961-1964. But they abandoned program design to left-leaning visions in a failed quest to regain voter support. Again, political survival became the only concern and compromise knew no limit.

As Carson Jerema, National Post’s Comment Editor, recently put it, “All governments debase themselves for partisan advantage, but it isn’t clear that (the current Liberal) government is capable of doing anything else. Every policy, every action, every pronouncement is designed, not to achieve a particular goal, but to wedge the Conservatives, or appease the NDP.”

Wedge-and-bait politics creates serious risk for Canadians. Radical ideas escape debate and run unopposed. Weak governments do not worry about long-term impact. They only worry about how to make the opposition look bad. The opposition also ignores long-term impact, while fretting about whether critique could weaken voter support. For example, Conservative Leader Pierre Poilievre held back criticism of the capital gains tax until days before the vote in Parliament, no doubt to lessen time for the left to foment negative press.

All politicians face a fundamental dilemma: stick to principles or pursue popular support? Stand up for what you believe, and never get elected, or compromise to get into power?

Minority governments generally require compromise. But compromise leaves voters shackled with ideas we can never adjust or abandon, especially when passed with “unanimous” or “near-unanimous” support.

Polling shows Conservatives have strong support in Canada right now. Let’s hope Poilievre feels strong enough to oppose the inevitable wedge-and-bait politics we can expect this fall.

 

Canada’s conservatives care about freedom—except in health care

Paramedics are seen at the Dartmouth General Hospital in Dartmouth, N.S. on July 4, 2013. Andrew Vaughan/The Canadian Press.
Canada needs conservatives to make space for clinicians and patients who are building their own solutions

Here’s a piece I wrote in response to an article in The Hub titled: We need neoliberalism now more than ever.

I pitched a piece arguing that Conservatives don’t actually believe in freedom, free enterprise, or limited government, when it comes to medicare. I was pleased that the editors tuned up the article and published it, March 20th (Here’s the piece on The Hub). Enjoy!

Canadian conservatives—particularly these days under Pierre Poilievre’s federal leadership—say they embrace freedom, free enterprise, and limited government. But too often conservatives at the federal and provincial levels have abandoned these intellectual commitments in office. Their past and ongoing support for central planning in health care is a good example.

Canada’s health-care system is marked by a government monopoly on certain types of insurance and similar top-down restrictions on the delivery of health care itself. Conservative governments across the provinces have been unwilling to liberate Canadians from this dirigiste model.

The paradoxical relationship between Canadian conservatives’ notional commitment to freedom and their practical affirmation of central planning in health care is best demonstrated by Ontario Premier Mike Harris’s health-care restructuring in the late 1990s.

Premier Mike Harris: the best central planner in Canadian history?

Will Falk, a former management consultant, recently wrote a detailed review, analysis, and scorecard of the Harris government’s health-care agenda in a new anthology about the premier’s record entitled, The Harris Legacy. Falk’s focus is the government’s Health Services Restructuring Commission (HSRC) and its effects on the province’s overall system and patient outcomes. He writes:

The Harris health program represents exceptionally well-done central planning. This is striking and ironic because a true ‘revolutionary’ of the ‘common sense’ school should not believe in central planning at all…Mike Harris ended up being among the best health care central planners in Canada’s history.

As Falk observes, though the Harris Conservatives were generally quite committed free marketeers (he notes for instance that many young staffers were acolytes of the Nobel Prize-winning and libertarian economist Friedrich Hayek), the government’s health-care policy preached freedom but actually practiced coercion. He explains:

As neoconservative revolutionaries, the CSR’ers ‘should’ have chosen an allocative method that would allow for freedom of choice…Instead, in 1995, the Harris government imposed a highly coercive, expert regime. The HRSC central planners closed over forty beloved institutions. More than 20,000 workers had their jobs disrupted.

Falk leaves no doubt in his conclusion: “It is ironic that Mike Harris is accused of being a free market advocate in health care while overseeing one of the best central planning processes in Canadian history.”

Two sides of Keynes

Reading Falk’s description of the Harris government’s health-care reforms got me thinking about the two forms of Keynesian thinking that came to influence post-World War II public policy and remain with us today.

The first form is John Maynard Keynes’ economic thinking which included the rather banal idea that governments can help to smooth the ups and downs of the business cycle in a market economy. One can argue for instance that the Harper government’s fiscal stimulus in response to the 2008 global financial crisis broadly followed Keynes’s counter-cyclical prescription.

The second is from Keynes, the philosopher, whose technocratic ideas became something of a “generalized theory”—particularly after his death. What sometimes describes as “bastardized Keynesianism” became a justification for all types of state intervention in the economy and society. His views about business cycles, which were contingent and narrow, were moulded and shaped into a scientific socialism that was subjected to virtually no constraints.

We came to abandon parts of economic Keynesianism in the post-stagflation era in the 1970s. But the “bastardized” parts remain prevalent in public policy thinking and practice, including in parts of Canadian health care.

Poilievre, freedom, and conservatives opting out

Free enterprise offers the best way out of a socialist slough. It worked well in the era of Reagan and Thatcher. It should work for Poilievre if he’s elected prime minister.

But will conservatives affirm freedom in health care and abandon the bastardized Keynesianism that still prevails today?

One possible answer can be found in a recent interview with Hub contributor Ginny Roth in which she said:

When Conservatives are losing, sometimes it’s tempting to opt out of the policy conversations that we think we are losing on. Provincially, this always happens: ‘Don’t talk about health care and education. Conservatives lose when we talk about health care and education.’

This instinct to “opt out” may be viewed by political strategists and the politicians they advise as good short-term politics. But the long-term result is to effectively abdicate public policy to their political opponents. What’s the point of winning if you’re simply going to implement the other side’s priorities?

If conservatives are genuinely committed to freedom and free enterprise, then they should propose legislative and policy changes to the health-care system that foster more freedom (including competition and choice) and reject the central-planning instinct inherent in Keynesianism.

Put differently: conservatives have only two realistic options. They can opt out of the health-care discussion and cede the terrain to progressives, or they can apply their principles to a much-needed reform agenda. They must, in the interests of Canadians and their well-being, choose the latter.

One key area for policy reform is to insist on greater provincial autonomy and in turn interprovincial competition and experimentation. This requires clarity on federal-provincial health-care mandates and a circumscribed federal spending power—including even something as bold as a possible constitutional amendment to limit it on a permanent basis.

Regardless of what approach they take, the federal Conservatives face a wide-open field in calling for market-friendly universal health care. No other party will steal their platform. They should resist therefore the temptation to match the Liberals on boutique health policies and instead fight for policy freedom in Canada’s most heavily regulated industry. At its core, this means granting clinicians and patients freedom to build their own solutions safe from regulators and planners.

Poilievre has offered three cheers for freedom. He doesn’t sound like a Keynesian planner. Let’s hope he expresses the same enthusiasm for freedom in health policy.