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The Canada Health Act: Myths and realities
by Kieran A.G. Bridge
 This
is the second in a series on the future of private health care and health insurance in Canada. This article looks at the legal
foundation of the Canada Health Act (CHA) and how it impedes health insurance reform.
What is this icon of Canadian nationhood, the Canada Health Act? Contrary to claims by some of its supporters, the CHA is far
from being a comprehensive health care or health insurance system. To appreciate how limited the CHA is, it’s important to note that
the federal government has virtually no constitutional jurisdiction over health insurance or health care. Almost all aspects of health
insurance and health care fall under provincial authority.
The CHA says nothing about public ownership of health care facilities or public employment of doctors or other health care providers.
Suggestions that private clinics or privately employed doctors or nurses amount to “violations” of the CHA are simply wrong.
The CHA is nothing more than a funding law.
Another way to illustrate the legal framework is to consider these facts. Any province could pass any law it wanted about whether there
is any taxpayer funded medical insurance and, if so, what are its limits. Provinces can make any laws they want about whether medical
facilities and health care workers are owned or financed publicly or privately . Some provinces are looking to reduce the cost of medical
care by using more efficient, lower cost care providers than government-owned and operated facilities.
Why have provinces made laws restricting private payment for medical care? It is because of the conditions that the federal government
attaches to its contribution to the cost of health care. Since the late 1950s the federal government has contributed to medical costs
through financial transfers to the provinces. This culminated in the passing of the CHA in 1984. At that time the contribution of the
federal government to taxpayer funded medical costs was about 50% of the national total. Currently the contribution is about 20%.
Clearly, the level of federal financing that formed the political backdrop to the creation of the CHA no longer exists.
Despite this, the federal government continues to tie the hands of the provinces by attaching conditions on its contribution to the cost
of health care. Under the CHA, for a province to receive a “full cash contribution” from the federal government, the province’s health
insurance plan must meet several criteria, including “public administration” and “comprehensiveness”.
“Public administration” means the provincial health care insurance plan (not the provision of medical care) must be administered on a
non-profit basis by a public authority.
“Comprehensiveness” is not clearly defined. There is no national standard of what services must be covered by a province’s health
insurance plan.
The CHA also says extra-billing and user charges must not be permitted by a province. “Extra-billing” is billing by a medical practitioner
above the amount paid under the province’s health insurance plan. “User charges” are any charges by care providers for provincially
insured services. In other insurance contexts, user charges are called “deductibles”. Imagine if automobile insurers were prohibited
from selling collision insurance with a deductible. Their prohibition under the CHA does nothing to encourage Canadians to take care of
their health, or to encourage judicious use of the health care system. This prohibition largely explains why health care costs are the
largest single component of provincial budgets.
Where any of the criteria listed in the CHA are not met, the federal cabinet “may” withhold some or all of the federal cash contribution
to the province in question. Where user fees and extra-billing occur, the federal Minister of Health “shall” deduct from the federal
cash contribution the estimated amount of the user charges or extra-billing.
The courts have consistently held that they cannot rule on whether a province has complied with the CHA. The courts consider compliance
with the CHA to be a political rather than a legal matter, the ramifications of which must be determined by the federal cabinet and
Minister of Health by possibly withholding cash transfers. The interminable political debate on reforming this system has led to what
I refer to as “political sclerosis.”
The next article in this series will look at provincial health insurance laws.
Kieran Bridge is General Counsel for the TU Group of Companies.
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