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Normandin Beaudry

Canada Health Care System


There, in black and white

NB Bulletin Vol. 6 N. 2, Febuary 2003

For the past few years¸ Canada´s health care system has been at the center of ministerial discussions. Among other things¸ it was the subject of various documents (the Romanow and Kirby Reports) and agreements¸ such that the 2003 federal budget includes provisions creating considerable additional investments in the health care sector.

Although the Romanow Report was not the first to deal with this topic¸ it seems to have triggered the agreement concluded between Prime Minister Jean Chrétien and the provincial premiers. The massive investment announced by the federal government in its last budget was a result of this agreement.


The report of The Commission on the Future of Health Care in Canada¸ which was tabled in November 2002 by Roy J. Romanow¸ made 47 recommendations dealing with the improvement of Canada´s health care system. Its main recommendations were the following:

  • The creation of a new Canadian Health Covenant;
  • The establishment of a Health Council of Canada;
  • The establishment of a new Canada Health Transfer;
  • The implementation of targeted financing¸ in order to create:
    • a new Rural and Remote Access Fund;
    • a new Diagnostic Services Fund (such as magnetic resonance imaging¸ scanners¸ etc.);
    • a Primary Health Care Transfer;
    • a Home Care Transfer;
    • a Catastrophic Drug Transfer;
  • The creation of a personal electronic health record for each Canadian;
  • The development of a plan to provide direct support to informal caregivers;
  • The establishment of a new National Drug Agency;
  • The consolidation of health care funding for Aboriginals and the development of policies and services to improve the health of Aboriginals.

Following the recommendation of the Romanow Report¸ the Prime Minister of Canada and the provincial premiers met and concluded an accord.


The Accord 2003 is the name given to the agreement concluded between the federal government and the provincial premiers on the renewal of health care in Canada. This agreement provides for long-term financing and specifies that federal health assistance will increase by $17.3 billion during the next three years and by $34.8 billion over five years.

The themes of the reform concluded in Accord 2003 concur with the recommendations of the Romanow Commission¸ the Kirby Committee and those of various provincial health reform commissions. 


On February 18th of this year¸ the Minister of Finance of Canada tabled the federal budget for fiscal year 2003. Concerning the health care sector¸ the budget confirms the Health Accord 2003.

The budget approves the following expenditures in the health care area: 

  • $16.0 billion will be spent over five years to create a Health Reform Fund¸ which will target primary health care¸ home care (active short-term home care¸ including mental health care and end-of-life care) as well as coverage for prescription catastrophic drugs;
  • an extra $2.5 billion will be invested immediately in the Canada Health and Social Program Transfer (CHSPT) to respond to current pressures;
  • $5.5 billion will be invested over five years on health care initiatives: improving access to diagnostic and medical equipment¸ development of health care information technology¸ and the creation of an employment insurance Compassionate family care leave benefit¸ which would entitle beneficiaries to a six-week benefit period;
  • $1.3 billion will be allotted¸ over five years¸ to support health programs targeting First Nation peoples and Inuit´s.

Impact of the Budget on Private Insurance Plans

Government coverage of home care will not have much global impact on private plans¸ since such types of claims only represent a tiny portion of total medical care claims for the time being.

As for catastrophic drug coverage¸ since the measures contemplated have not yet been clearly defined¸ it is difficult at the present time to foresee the impact on private insurance plans.

Concerning the investment in health care initiatives to improve access to public diagnostic services (an extra $1.5 billion over three years¸ specifically for this service)¸ a minor impact could be felt on private plans¸ if the investment announced proves sufficient to decrease waiting periods in the public network relative to this type of service. These waiting periods presently mean that patients tend to look for services provided by the private network that are generally reimbursed by private insurance plans.

The investment in health care information technology sector will have the effect of expanding the use of technologies¸ more specifically¸ concerning the adoption of long-distance health records. This communication and information factor will accelerate diagnostic services and treatment. It will also enhance the quality and safety of health care¸ by reducing the risk of incidents involving medication (errors in manual transcription¸ allergic reactions¸ risk of dangerous interactions between two different medications¸ etc.) and will reduce the repetition of unnecessary medical tests. It is obvious this technological tool will have a beneficial effect on the costs of health care for Canadians. However¸ its repercussions on private plan costs will only be felt on the long-term and will be difficult to measure.

The employment insurance Compassionate family care leave benefit paid will affect individuals who meet eligibility criteria for special employment insurance benefits and who will have spent the two-week waiting period. They will be entitled to six weeks of benefits in order to take care of children¸ parents or spouses who are seriously ill or dying¸ while knowing their job security is guaranteed during their absence. The details concerning the application of these benefits remain to be determined. No specifics are provided concerning the employer´s obligation to maintain employees´ fringe benefits while collecting these employment insurance benefits.


It is fairly difficult for now to foresee precisely the effect of these investments on private group insurance plans. However¸ these additional investments suggest that medical services provided by the public health care network will improve or at least be maintained¸ which could have a favourable effect on the cost of private plans or at least¸ reduce the rise of future costs.


Please feel free to contact us for additional information.

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