On April 17, 1984, the Canada Health Act received royal assent.
The story published the next day in The Globe and Mail was underwhelming – a couple hundred words in the news briefs on Page 4: “The Canada Health Act became law yesterday,” it read, “setting forth a federal prescription for the ills of medicare and leaving the provinces with bitter medicine to swallow.”
Forty years later, despite the early indifference, the Canada Health Act has achieved almost mythical status.
Yet, it has not aged gracefully. Medicare’s ills are much more pronounced in 2024 than they were in 1984. And this time around, it’s the Canadian public who are feeling bitter toward the system (especially its lack of access to timely care), and not just cash-strapped provincial and territorial governments.
Is it time for us to try to fix the Canada Health Act, medicare’s defining legislation? Or do we scrap it and start over?
Today, as was the case four decades ago, the impetus for this debate has been the rapid growth of private care, which is seen, at different ends of the political spectrum, as either a threat to Canada’s largely publicly funded (and overwhelmed) health system, or a possible pressure-release valve.
In the early 1980s, before the Health Act was enacted, Canada was beset by galloping inflation, rapidly rising health costs, and cuts in federal spending, which led to provinces imposing user fees on hospital patients and many physicians engaging in extra billing. Between 1979 and 1983, the additional physician fees charged to patients across Canada were estimated to have soared from about $2-million to up to $200-million. These moves were in clear violation of existing legislation that formed the backbone of medicare in Canada: the Hospital Insurance and Diagnostic Services Act of 1957, and the Medical Care Act of 1966.
The very essence of Canadian medicare was under attack, and Ottawa had to act.
But there was an important backstory. As health care costs soared in the 1970s and early 1980s, Ottawa had backed away from its long-standing commitment to paying half of the health care bill for provinces and territories. Instead of reimbursing, or cost-sharing, half of provincial and territorial costs for hospital and physician services, the government of Pierre Trudeau instead implemented Established Program Financing to transfer cash and tax points to provinces and territories for health, social services and education.
It was this 50/50 cost-sharing that led to a semblance of a national medicare system in the first place, and Ottawa’s decision to move unilaterally away from cost-sharing to block grants left the provinces feeling short-changed. They looked for ways to fill the funding gaps – thus the soaring costs of extra billing and user fees, which were understandably unpopular with the public.
The task of sorting out this mess fell to Monique Bégin, the national minister of health and welfare in Mr. Trudeau’s Liberal government. She was a passionate defender of medicare not only politically but personally, as her family had suffered greatly because of the burden of medical bills.
“My job is to make sure medicare remains universal,” the late Ms. Bégin said at the time.
We are still wrestling with that question of universality today – does ensuring that every Canadian has access to essential health care services regardless of their ability to pay mean that everything must be “free” (i.e. paid for with public funds)? Does it mean that those who can afford to pay for services should not or cannot?
Those are perennial political questions in Canada, ones that have never been answered satisfactorily, in large part because we have never clearly defined the limits of public coverage.
The central core of the Canada Health Act was a clause that would see the federal government make dollar-for-dollar reductions in cash transfers to the provinces and territories that allowed patients to be charged more than the fees covered by provincial health plans. The move to include this “reductions clause” at the legislation’s inception infuriated not only the provinces and territories but also physicians and hospitals, who decried growing state control over medicine.
But Ottawa had a powerful cudgel: the $9.3-billion it had allocated for health transfers in 1984. Today, health transfers to the provinces and territories amount to $49.4-billion in 2023-24. (And, by the way, there are still deductions from the transfers being made for violations of the Canada Health Act: $79.4-million last year, in fact.)
Greg Marchildon, a professor emeritus at the University of Toronto, says the “guts” of the Canada Health Act are quite technical, focusing on transfers and deductions. The law helped resolve an immediate political crisis – the explosion of extra billing and user fees, and was successful in doing so. Within three years of the federal law being adopted, every province and territory had banned extra billing and user fees. What sealed the deal was that the Canada Health Act featured a carrot as well as a stick – while Ottawa imposed harsh penalties, it also promised to refund all the money to a province or territory if it banned extra billing within three years.
But it wasn’t always a smooth transition. The then-president of the Canadian Medical Association, Dr. Everett Coffin, called the law a “rape of the spirit, if not the legal stipulations, of the Canadian Constitution,” and threatened to sue. (The CMA never did.) When Ontario moved to ban extra billing, doctors in the province staged a bitter 25-day strike.
While the fights over money got all the attention in the immediate term, what eventually elevated the Canada Health Act to almost-mythic status was its grand principles.
“It’s almost a call to arms,” Mr. Marchildon says.
The law’s overarching objective is to ensure every Canadian has affordable access to care. It features five so-called “principles” (though, technically, they are just preconditions for receiving federal funding):
· Public administration: Provincial insurance plans must be administered by a public agency on a not-for-profit basis. There is fairly broad agreement that having a centrally administered insurance plan is cost-efficient. But this clause is widely misunderstood to mean that there cannot be private providers (either not-for-profit or for-profit) of health services. But the law has no such restrictions;
· Comprehensiveness: Coverage is based on medical necessity. Because the law deals only with hospital care and physician services, they are deemed “medically necessary.” As a result, universal coverage is limited – it doesn’t include prescription drugs, long-term care, at-home care, dental care and so on. That means user fees are allowed in these areas, and they don’t have to be publicly administered;
· Universality: Every resident is entitled, on uniform terms and conditions, to the publicly funded health services covered by their provincial or territorial plans. As a result, coverage can vary by jurisdiction. Universality does not necessarily mean every health service has to be “free” – or via “first-dollar” coverage, to use the jargon – only hospital and physician services. Provinces and territories can fund their health insurance plans as they wish, whether via general taxation, dedicated taxes or premiums;
· Portability: Provinces are required to cover medically necessary hospital and physician services to citizens who reside elsewhere in Canada who are visiting or relocating. Practically, this requires bilateral agreements between jurisdictions, and those don’t always go smoothly. The law also allows a three-month delay in coverage when people relocate, which can be problematic. This clause is routinely violated, particularly in cities located near provincial boundaries – disputes are particularly heated between Ontario and Quebec since the fees paid to doctors in these provinces can differ substantially;
· Accessibility: Canadians should have “reasonable access” to insured hospital and physician services. However, “reasonable” is not defined.
(It’s worth noting that four of the Health Act’s “principles” were already included in existing legislation. Originally, it was simply going to be a consolidation of the Hospital Insurance and Diagnostic Services Act of 1957, and the Medical Care Act of 1966.)
Unfortunately, the clarion call of the Canada Health Act has gone largely unanswered. The legislation hasn’t been updated in 40 years, and during that time medicine has changed a lot, as have demographics and the health needs and expectations of Canadians. The Health Act is now as outdated as it is iconic.
The act’s accessibility clause was intended to address financial barriers to access. But lawmakers never envisioned the possibility that 6.5 million Canadians would not have a family doctor, that waiting months or years for surgery would be commonplace, that emergency rooms would be full of patients spending days on stretchers in hallways, and that virtual care could erase provincial boundaries.
“I don’t think anyone would argue that Canadians are getting reasonable access to care today,” says Colleen Flood, the dean of law at Queen’s University.
But she is quick to point out that this isn’t the fault of the law, but of politicians and policy makers who have not articulated a vision for a strong public-health system that meets the needs of 21st-century patients and taxpayers.
It’s the lack of access to timely care that is both driving dissatisfaction with medicare, and could also be the catalyst for changing its defining legislation.
In other countries with universal health care, especially in Europe and more specifically Scandinavia, health laws are highly definitional. They make clear which health services are covered publicly, and which are not. Regulations are also updated regularly, to adapt to changing needs.
The Canada Health Act has not changed substantially for four decades.
“No one thought it would go untouched for 40 years,” says Bill Tholl, a senior policy adviser for Monique Bégin back in 1984. (He would later work as a senior leader with Heart and Stroke, the Canadian Medical Association and the advocacy group HealthCareCAN.)
“There has been a wholesale change in the culture and economics of health care since then, so the legislation needs to reflect that change,” he says.
Over the years, there have been countless recommendations for how to buff up the law, most frequently to add an “accountability” clause. For example, the 2002 Royal Commission on the Future of Health Care in Canada (commonly known as the Romanow Commission) stressed the need for more accountability for how health services are delivered and paid for.
There have also been a lot of legal challenges to the Canada Health Act, and related provincial laws, notably in the case of the Cambie Clinic in Vancouver. Dr. Brian Day argued in a years-long court case that the inability of Canadians to pay privately for medically necessary care such as orthopedic surgery violated their constitutional rights. (Under the law, that is considered extra billing.)
The courts essentially ruled that denying faster access to care did violate rights, but it was a reasonable limit because it ensured more equitable access to care.
Ms. Flood, who has spent much of her career fighting legal challenges like that one, said most of the cases have been “by doctors promoting private, for-profit care because they wanted to make more money.” What she would like to see in the future are challenges to the law by patients who want timely access to health care in the public system.
Until that happens, Ms. Flood says, “it will be hard to resist the pull of private health care because people are getting desperate.”
Mr. Marchildon, for his part, notes that the Canada Health Act actually bans nothing, not even the private, for-profit surgical clinics springing up in larger numbers today. Rather, it discourages the creation of parallel private service delivery by imposing penalties on provinces that allow extra billing and user fees for medically necessary services.
But the law also features anachronisms that send mixed messages, such as allowing employee benefits plans to operate in a parallel system that is exempt from the Canada Health Act and that depends on private payment.
Mr. Marchildon rejects the oft-stated criticism that the legislation has been an impediment to reform. “The law sets a floor, not a ceiling. It doesn’t really prevent anything.
“The truth is medicare is vulnerable because there are problems with timely delivery of services,” he adds. “The issue is poor governance, not a poor law.”
Mr. Tholl largely agrees with that analysis, saying politicians really need to step up. “What we need today is a minister for health, not a minister of health,” he says.
One of the biggest flaws with the current law, and our health system more generally, is the lack of accountability, beginning with a lack of data. Mr. Tholl notes, for example, that “we know how many doctors are opting out of medicare, but we have no idea how many patients are opting out by going out-of-province or out-of-country for care.”
While he had a hand in drafting the law, and is proud of how it has helped to protect publicly funded health care over the years, Mr. Tholl says the time has come to start afresh.
“This creaky old legislation needs to be put out of its misery and our laws brought into the 21st century.”
Editor’s note: A previous version of this article incorrectly stated that the Royal Commission on the Future of Health Care in Canada tabled its final report in 2009. It was tabled in 2002. This version has been updated.