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By Bacchus Barua
Steve Lafleur
and Ben Eisen
The Fraser Institute

In a recent speech to the Canadian Medical Association, federal Health Minister Jane Philpott acknowledged what few politicians seem willing to recognize – that Canada’s healthcare system is in desperate need of repair and more money isn’t the answer.

Crucially, Philpott also provided some examples of countries that outperform Canada’s healthcare system on a number of indicators, but which do ‘universal healthcare’ differently.

Bacchus Barua

Bacchus Barua

Researchers have long pointed out that while Canada ranks among the most expensive universal healthcare systems in the developed world, has fewer medical resources (physicians, beds, diagnostic scanners) on average, a mixed record on outcomes and some of the longest wait times for medically necessary treatment.

That the minister acknowledged this imbalance marks a significant shift from the pervading misperception that Canada has the world’s best (or only) universal healthcare system.

Philpott’s acknowledgement that more money (through the Canada Health Transfer, or CHT) is not the answer also marks a bold move away from the politically savvy promises of arbitrarily-determined and unsustainable annual increases in federal funding that we saw in the 2000s. Unlike many of her predecessors, Philpott has signalled that innovation – not more taxpayer funding – is key to improving our healthcare system.

Of course, this raises two crucial questions:

  • What kind of innovation is needed?
  • What prevents it from taking place?
Steve Lafleur


While provincial governments have enough latitude to pursue improved efficiency by moving towards electronic health records, activity-based funding for hospital care and centralizing the patient-referral process, the Canada Health Act (CHA) remains responsible for a lack of meaningful innovation through policy reform.

The act sets terms and conditions that provinces must fulfil before receiving full cash transfers from Ottawa.

But it discourages provinces from employing policies found in Australia, the United Kingdom, France and Germany – the very countries Philpott pointed towards as potential models for reform.

Each of these countries embraces the private sector as either a partner or an alternative for the insurance and delivery of medical services. Further, Australia, France and Germany expect patients to share the cost of treatment (with annual caps and exemptions) to encourage them to make more informed decisions about the use of scarce (and costly) medical resources. Notably, all four of these countries have shorter wait times for medically necessary treatment than Canada.

Ben Eisen


If the federal government is truly interested in promoting meaningful, beneficial innovation, it could relax the CHA and let the provinces be freer to pursue policies they feel best serve their populations.

Philpott’s recent statements about the state of Canada’s health system were refreshingly honest and correctly diagnosed the problem – a lack of innovation, not a lack of money.

What remains to be seen, however, is if she is bold enough to allow provinces to introduce the sort of policies long ago adopted by the very countries she identifies as potential models for reform.

Bacchus Barua, Steve Lafleur and Ben Eisen are analysts at the Fraser Institute.

Bacchus, Steve and Ben are Troy Media contributors. Why aren’t you?

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